It is a bit complicated. The corn subsidy pays farmers for the difference between the market price of corn and the actual cost to produce it (with a bit thrown in for profit). It actually takes away the incentive for farmers to match the supply with the demand. They are rewarded for over-production (which lowers the market price) by increased subsidies to make up the difference in operating costs. Our direct cost, as consumers, when purchasing goods made with corn and corn by-products is lower, however the indirect cost of subsidies (through taxation) is very high. It prohibits the market from establishing a true value for the product. It also allows the farmers being subsidized to spend quite a bit of money lobbying Congress to keep the subsidy going. The best thing would be to eliminate the subsidy altogether, that would result in a net savings to consumers and taxpayers.Originally Posted by speaker