Question

The United States has subsidies for farmers in the United States which drives down the cost of food. Proponents of free trade argue that these subsidies are a form of government waste and that allowing the free market to work will produce greater competition to help keep food prices low. They also argue that the system had loopholes that contribute to excessive waste.

Proponents of market intervention argue that subsidies are needed to keep farmers competitive with the rest of the world which also subsidizes their farmers. They also argue that lower food prices benefits outweigh the increase in tax to subsidize food.

Define what the most important objectives should be in your opinion ( please provide citation of website used)

Answer 1

Subsidizing farmers and agricultural products provide benefits such as cash, minimum prices and crop insurance programs. Though many economists oppose agricultural subsidies but it has little effect on the continuous transfer of taxpayer money to farmers. The objective is to maintain price stability, to support the poor class and ensuring adequate returns to small and marginal farmers. It also has redistributive objective to ensure minimum level of food and nutrition to all sections of society . Direct farm subsidies make the food crops more competitive in the global markets. These are good because they provide a purchasing power to the farmer and help in raising the living standards of the rural people significantly . This is the most important objective of Subsidizing farmers.

Also consult agricultural subsidy ( wikipedia)