In Free Market Environmentalism, economists Terry Anderson and Donald Leal write, "Subsidized irrigation . . . encourages farmers to break prairie sod and plant crops in arid regions. Rather than choosing drought-resistant crops that might be more appropriate in an environment undergoing global warming, farmers intensify the use of pesticides and chemical fertilizers to increase their yields. . ." (pp. 163-164). Which of the following explains the deadweight loss from irrigation subsidies?
A) Farmers are using methods that do not match their incentives.
B) Farmers are using methods that do not result in the highest crop yield.
C) Farmers are using methods for which the social cost of growing food exceeds the social benefit.
D) Farmers are using methods without considering the methods' opportunity cost.

Since water used for irrigation is being subsidized, farmers are abusing how they are using water. But the fact that a product is being subsidized doesn't mean that it is free, someone else is paying for it. In this case, all the people that live in a state that subsidizes water are paying for that subsidy.

We can argue that some subsidies are good since in this case they increase the production of crops that we all eat. But if that crop production is associated with dangerous chemicals (pesticides and fertilizers) that hurt our environment it is even worse, since it is like giving money to someone and instead of that person saying thanks, he punches your face. We are all paying money to be worse off.