"Cheap grain hurts farmers" is a classic problem in economics. How much money farmers can sell after harvest depends on two factors: output and food price, which is the product of the two. But these two variables are not independent, but interrelated, and their correlation is determined by the downward sloping food demand line. In other words, the lower the price, the greater the demand; The higher the price, the smaller the demand. It should also be noted that the grain demand line lacks elasticity, that is, demand is not very sensitive to price changes. When food prices fall, the demand for food will increase, but not too much. The basic truth is that food is a necessity, and the demand for food is mainly determined by the physiological demand for food. In addition, for most people today, the proportion of food expenditure in the total expenditure has been very small, and it will become smaller and smaller, which also leads to people's insensitivity to food price changes.

After recognizing this feature of the grain market, it is not difficult to understand the following phenomenon: when the grain output increases substantially, farmers can only compete to reduce prices to sell their own grain. However, due to the inflexibility of food demand, farmers can only sell food after drastically reducing food prices, which means that food prices often fall sharply at the time of grain harvest. If the percentage of falling food prices exceeds the percentage of increasing food production, there will be a situation in which the increase in food production will not increase or even decrease, that is, "cheap food will hurt farmers"

Since food is the most basic means of subsistence, most countries attach importance to their own food production, especially those with a certain population size, and adopt various policies to support agriculture by intervening in the food market to ensure food security and protect farmers' interests. This is the case in the United States, but overall, the effect is not ideal. First, the cost is very high. In order to maintain the food price, the government must buy the unsold food at the protective price, so taxpayers have to pay a considerable amount of food storage costs.