What is a product that has been subsidized by the government that has helped some people and hurt other people?i need a example of a situation in which a product that has been subsidized by the...

What is a product that has been subsidized by the government that has helped some people and hurt other people?

i need a example of a situation in which a product that has been subsidized by the government has hurt some people of the general population while hurting some.

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brettd's profile pic

brettd | High School Teacher | (Level 2) Educator Emeritus

Posted on

Subsidies of crops such as corn and products such as milk for decades has supported those large producers and landowners of agribusiness inc. by giving them guaranteed incomes and insulation against crop losses or the low prices associated with overproduction.  This allowed them to grow much larger without fear of overextending themselves.

At the same time, these larger companies were then able to offer lower prices for their subsidized products than the small family farmer, often living from harvest to harvest.  As the small family farms did not benefit as much from the subsidies that favored large agribusiness, they often went bankrupt or were forced to sell to those same larger companies.

So we have a stable food supply, with stable prices for the most part, but the small farmer has been hurt in the long run and is a dying breed.

pohnpei397's profile pic

pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted on

To me, the clearest example of a product that meets these criteria (in the United States, at least) is tobacco.  The government has been subsidizing tobacco for quite some time now and it is pretty clear that tobacco helps some people and hurts others.

The main people who are helped by tobacco are the tobacco producers and the companies that sell tobacco products.  They have their costs reduced by the govenment subsidies.  The main people who are hurt by the subsidies are the people who consume more tobacco than they would if the subsidies did not exist.  Subsidies mean that more tobacco is produced at a lower cost than if there were no subsidies.  That means that it is cheaper to smoke or chew tobacco because of the subsidies.

So tobacco subsidies help tobacco producers and hurt tobacco users.

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