Agricultural subsidies

Agricultural subsidies are amounts of money given to farmers to support their operations.

Subsidies may be provided directly, as cash payments, or as indirect support.

For example, a government might provide low-cost crop insurance, keep prices at an artificial level, or assist farmers in other ways. Agricultural subsidies are a feature of many government budgets, and a topic of hot debate in some regions of the world.

In the case of a positive agricultural subsidy, a farmer is rewarded for growing a crop, with the subsidy usually being based on the amount of crop being grown, or the amount of the harvest.

With negative subsidies, farmers are encouraged not to produce a particular crop or product. For example, if milk production is extremely high, farmers might be paid subsidies not to raise dairy cows, to reduce the amount of dairy on the market.

An agricultural subsidy is a governmental subsidy paid to farmers and agribusinesses 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, cotton, milk, rice, peanuts, sugar, tobacco, and oilseeds such as soybeans.