According to a recent Cato paper, every time you buy a stick of butter you pay a 100% tax on the sale. You also pay an 80% tax on the sugar components of all food. Similar taxes, ranging from around 10 - 100 percent are placed on a slew of food products in the United States.
The government makes this tax by paying farmers to grow agricultural products below the rate of demand, and then putting tariffs on competing imports to make the domestic price conform to the reduced supply.
When you go to the store to buy the product, you are forced to pay the difference between the market price and the government price , as well as pay for the original subsidy in your income taxes. The result: money is transferred from you, to a government bureaucracy, and finally to a person with a government guaranteed “private sector” job (there is in fact, one Department of Agriculture bureaucrat for every three farmers in America).
The study states the average American family spends 146 dollars a year for the tax. This may seam as a small sum to a comfortable family, but to people living hand to mouth on the grocery budget, this makes a significant difference.
In addition to the direct cost to consumers, subsidies tie up billions of dollars in capital and millions of workers in sub optimal production. The workers and investment money used to produce goods at a loss could be employed in profitable industries or even in the slew of crops that America exports to the world (only the unmarketable ones are funded).
When Australia and New Zealand abolished their agricultural subsidies and tariffs, they saw a marked reduction in the agricultural sector (with no uptick in unemployment because labor shifts), but that the farms remaining produced goods far more efficiently, and survived on their own selling goods the market would pay for.
The only argument that usually sticks around once it’s clear the subsidies are a giant barrel of pork is a patriotic plea to save that endangered species, the American family farmer.
The only answer to that is that subsidies have been in place for 70 years, putting the farmers in the generational line of farming for a government check. The days of American pioneers building homesteads on the sweat of their backs is mostly a memory; most of the farms being subsidized are corporate farms manned by immigrant seasonal workers. Those that are still family farms have been farming for decades at a loss, maintaining a way of life for the purpose of national quaintness (when they farmed for a profit back in the day, it was actually a way of economic life).
Who is to say that these particular workers, in this particular sector, should be paid to produce at a loss when anyone else would loose their shirt without government pity?