Wheat producers in Canada, America and Australia dramatically expanded production during the First World War to fill the gap left by disrupted Eastern European supplies. Why did this expansion, which seemed beneficial during the war, turn into a serious economic problem once the war ended?
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Model Answer
During the war, Eastern European wheat supplies were disrupted, so Canada, America, and Australia expanded production to meet world demand. Once the war ended, Eastern European production revived, creating a massive glut in the wheat market. With supply now far exceeding demand, grain prices fell sharply. Rural incomes declined, and farmers sank deeper into debt. This agricultural overproduction became a persistent problem, worsening further when struggling farmers tried to sell even more produce to compensate for falling prices, pushing prices down still further.
Source: Chapter 3, Section 3.2 Post-war Recovery
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Explanation
- The key cause-and-effect chain examiners expect: war disruption → expanded production → Eastern Europe revived → glut → falling prices → rural debt.
- The word "glut" is from the textbook; using it shows familiarity with the source.
- Don't write about the Great Depression in detail here — this question is specifically about the post-war agricultural crisis, not the 1929 depression (even though the two are linked).
- For 3 marks, aim for 3 clear points: (1) Eastern European supply revived, (2) glut/overproduction, (3) falling prices and rural debt.