Explain how a subsidy paid to cotton farmers affects the consumer surplus and the producer surplus from cotton. Does the subsidy make the cotton market more efficient or less efficient?

Explain.

Congress sent the White House a huge $290 billionelection-year farm bill which contained $40 billion for farm subsidies and almost $30 billion to farmers to idle their land. Bush has threatened to veto the bill, saying it is irresponsible and too generous to wealthy corporate farmers in a time of record crop prices.