How Does a Farm Subsidy Work?
Introduction to Farm subsidies, also known as agricultural subsidies, are fixed amounts of money paid to domestic farmers of some developed countries by their governments that guarantees them a fixed income on their crop or livestock regardless of how they actually perform. The issue of farm subsidies is a politically loaded one, regardless of whether you are for or against them because of their impact on global food prices and domestic taxpayer implications. How Farm Subsidies Work In virtually every other industry under a free market system, market forces are allowed to drive demand, supply, prices, profit and loss. However under a system supported by farm subsidies, farmers are compensated regardless of whether or not they do well or produce the best product for their consumers. This compensation comes from the government at the tax payer’s expense. In the United States, farm subsidies are kept alive by Farm Bills passed every few years. They not only guarantee a price floor for a p
