Alan: Government subsidies have been proposed in Cariana to encourage farmers in Rochelle, the country’s principal agricultural region, to implement certain new farming techniques. Unless these techniques are implemented, erosion of productive topsoil cannot be controlled. Unfortunately, farmers cannot afford to shoulder the entire cost of the new techniques, without subsidies, agricultural output in Rochelle will inevitably decline.
Betty: But erosion in Rochelle is caused by recurring floods, which will end next year once Cariana completes the hydroelectric dam it is building across the region’s major river. Therefore, Rochelle’s its present level even without subsidies.
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