Pi u m sit
This analysis of tlx- market for farm products also helps to explain a seeming paradox of public policy: Certain farm programs iry to help farmers by inducing them not to plant crops on all of their land. The purpose of these programs is to reduce the supply of farm products and thereby raise prkes- With inelastic demand for their products, farmers as a group receive greater total revenue if they supply a smaller crop to the market No single farmer would choose to leave his land fallow on his own because each takes the market price as given. But if all farmers do so together, cach of them can be better off.
When analyzing the effects of farm technology or farm policy, it is important to keep in mind that what is good for farmers is not necessarily good fur society as a whole. Improvement in farm technology can be bad for farmers because it makes farmers increasingly unnecessary, but it is surely good for consumers who pay less for food. Similarly, a policy aimed at reducing the supply of farm products may raise the incomes of farmers, but il does so at the expense of consumers.
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