"America's Cotton Subsidies Depress World Prices, Undermining Foriegn Policy Goals", WSJ June 26, 2002 and subsequent letters, "Farm Subsidies Equal Constant, Affordable Food" and "Free Market Avoidance".
According to the article, the U.S. cotton subsidy program guarantees U.S. farmers $.70 / pound of cotton whereas the world price is $.40 / pound and according to the letter in support of the subsidy, "profits are razor thin". As long as profits are less than $.30 / pound, it would seem that all parties concerned would be better off if the U.S. paid its cotton farmers to not produce cotton: Farmers could be paid more than their profit producing cotton, U.S. could pay less than $.70 for cotton, and the world price would not be as depressed, easing our foreign policy concerns. (Only cotton buyers would be slightly worse off.) What is wrong with this logic? Why do (very rational) cotton growers oppose such a policy? Hint: think about fixed vs. marginal costs and hence about average vs. marginal profits of cotton farmers.
[LINK: subsidy (3), fixed vs. marginal costs (4)]
I'd like to thank Med. Ocean student Tahsin Alam for bringing this article to my attention.
2:48:37 PM 
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