In the above example, we saw that the US Government gives massive sums of money to farmers for production. At times, governments also give support to promote production of certain types of goods, such as those which are environmentally friendly. Discuss whether these are fair or not.

Government intervention distorts the forces of demand and supply. Such intervention, gives undue advantage to those producers who receives government assistance over those who doesn’t. Such intervention also leads to poor resources usage, as the producer then would not take enough steps to increase efficiency of the production process. However, in a country which is underdeveloped or developing, such intervention be allowed to be made on principled lines, to boast the already fragile domestic market.