f subsidy provided by the government was something known as price supports. This was a minimum price for goods set above average so that farmers could maintain a stable income despite market demand.Although farmers benefited from price supports, it created a loss to the consumer. They were paying a higher price while consuming less of the product. This resulted in a product surplus. Farmers supplied more than the consumer was willing to buy, therefore forcing the government to purchase the leftovers so that the price support could work. Because of this extra spending, social losses arose. Taxes increased in order to finance the governments buying of the surplus, not to mention, government administrative costs went up to fund additional workers that put these subsidies into effect (Brue 558). Aside from additional taxes and government costs, many criticisms surfaced compelling existing subsidies to be questioned. This included, but was not limited to, the fact that price supports caused farmers to stay in agriculture who otherwise would have left for a more profitable business, and that government subsidies have traditionally benefited only those farmers producing large quantities and earning big bucks. In 1996, the 6 percent of all farms with sales of $250,000 or more received 46 percent of all direct government subsidies (Brue 660). This clearly shows the argument that subsidy payments destroy any chance for the poor farmer to receive substantial aid from the government. In 1996, Congress enacted the Freedom to Farm Act. This new law ended price supports for wheat, corn, barley, oats, sorghum, rye, cotton, and rice (Brue 662). It changed the policy of supporting crop prices to weaning farmers from government assistance (Wirtz 1). The objective of this legislation was to allow farmers to plant what they wanted, as much as they wanted. This provided the farmer with a tool for responding to changing crop prices. He could c...
