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Concept
Agricultural subsidy
Summary
An agricultural subsidy (also called an agricultural incentive) is a government incentive paid to agribusinesses, agricultural organizations and farms to supplement their income, manage the supply of agricultural commodities, and influence the cost and supply of such commodities.
Examples of such commodities include: wheat, feed grains (grain used as fodder, such as maize or corn, sorghum, barley and oats), cotton, milk, rice, peanuts, sugar, tobacco, oilseeds such as soybeans and meat products such as beef, pork, and lamb and mutton.
A 2021 study by the UN Food and Agriculture Organization found $540 billion was given to farmers every year between 2013 and 2018 in global subsidies. The study found these subsidies are harmful in numerous ways. In wealthy countries, they damage health by promoting the overconsumption of meat.
In under-developed countries they encourage overconsumption of low-nutrition staples, such as rice. Subsidies also contribute to the climate crisis, by encouraging deforestation; and they also drive inequality because smallholder farmers, many of whom are women, are excluded. According to UNDP head, Achim Steiner, redirecting subsidies would boost the livelihoods of 500 million smallholder farmers worldwide by creating a more level playing field with large-scale agricultural enterprises. A separate report, by the World Resources Institute in August 2021, said without reform, farm subsidies "will render vast expanses of healthy land useless".
On the earliest known interventions in farming markets was the English Corn Laws, which regulated the import and export of grain in Great Britain and Ireland for centuries. The laws were repealed in 1846. Agricultural subsidies in the twentieth century were originally designed to stabilize markets, help low-income farmers, and aid rural development. In the United States, President Franklin D. Roosevelt signed the Agricultural Adjustment Act, as part of the New Deal in 1933. At the time the economy was in a severe depression and farmers were experiencing the lowest agricultural prices since the 1890s.
Official source
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