Agriculture Subsidies

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published by jiaqishi




Regularly paid to farmers who produce a designated crop. The payments are decoupled from production—which means farmers can produce as much or as little as they want and still receive this subsidy.

Keep domestic crop prices high enough to encourage farmers even during periods of overproduction, when prices would tend to fall due to oversupply.

Price supports



Agriculture Subsidies

OECD Agricultural Subsidies vs. Percent of crops produced

Direct Payment

Agricultural subsidies are not equally distributed around the globe. Asia spends more than the rest of the world combined.

Regional Distribution of Agricultural Subsidies (in billions)








70% goes to price supports; China increases the minimum price for rice and wheat yearly; The price of rice doubled while wheat prices increased by 70% between 2007–2012.

80% goes to direct payment policy—the Single Farm Payment; It is distributed by the hectare.

Direct payment until 2013; 2014 Farm Bill: crop insurance, 60 % subsidized by the government.

1. Overproduction and oversupply; 2. Increased gap between industrial and least-developed country. Farmers in least developed countries lose advantage, turn to importers from exporters.

1. Not for the poor farmers, rather a way for wealthy farmers to get richer. In the U.S. the bottom 80% of farms just receive $5000 a year when the 26 biggest farms receive more than 1 million; 2. Predominantly fund a few staple crops for the largest farms, which later tend to lack crop diversity, soil starts losing nutrients, using fertilizers and pesticides in return. E.g. U.S. Midwest nitrogen fertilizer runoff causes 5,840 square miles "dead zone" with massive algae bloom in Gulf of Mexico in 2013