Arguments against agricultural subsidies: 1) subsidies discourages competition and an efficient production; 2) very rich farmers receives subsidies, which funds are originated in the taxes payed by regular, non-rich people; 3) Cuts to subsidies would help reducing the federal deficit.
<span>Agricultural subsidies are supposed to lower food prices and help farmers. However, they don't always do either. Moreover, lower food prices and more farmers have their own social costs.
The truth is that all across the world farmers are getting more efficient and can grow and harvest more crops with fewer people. That isn't about to change any time soon, and there's very little government can do about it.
There are several ways you can go about subsidizing agriculture, for example: <span>Direct cash payments to farmersQuotas and production controlsLabor lawsTax creditsProviding water and electricity at reduced prices</span>And so forth.
The problem is that, as time goes on, everyone gets used to the system and it gets out of whack with actual demand. For example, tobacco use has been steadily dropping, but tobacco farmers still get subsidies (either to grow or not to grow) and the Western nations grow tobacco to export (along with the health detriment, which is now hitting Africa and China).
As another example, corn is cheap, but the U.S. produces about five times as much now as it did in 1940, although the population has only doubled. As such, a lot of it is just fed to livestock. More problematically, a lot of it is exported to Mexico, where corn can be grown more cheaply, but can't be sold against subsidized American corn, which costs less.
Here in Canada, there is a quota system for dairy which means we don't produce much surplus. However, at retail, milk cost about twice here what it does in the U.S. We can't figure out how to dismantle the system so at least milk will cost about the same as it does in other countries. Trying to dismantle the system might be more expensive than leaving it in place. It might also mean more milk is produced than is consumed, which would again push the market out of whack.</span>
