The Impact of Agricultural Subsidies Essay

Agricultural subsidies is a very complex and controversial economic topic today. It will continue to be a hot topic as government continues it. It is largely debated in the United States as well as in other countries. The reason it is so largely debated is because it literally have an effect on the entire world market. Not to mention that the farm has been booming the last 5 to 10 years. This topic also tends to draw strong opinions in our area in particular due to the large agricultural community in our region. However, even within different states there are many supporters as well as opponents to these government subsidies.

Plenty of benefits have steamed from the implementation of subsidizations in the agriculture industry. First, farmers are receiving a more consistent income than they were before the government’s subsidies were enacted. As stated by Connect Us Fund, subsidies allow

Farm subsidies ARE horrible. Americans can first do themselves a favor and save money by abolishing farm subsidies and trading with developing nations for lower-cost, higher-quality food. This not only puts tax money back into our hands, but we are then able to buy cheaper food, and at the same time help boost an economy of a developing nation. US farm subsidies DO benefit foreign consumers as they get to eat cheaper food that are subsidized by the American taxpayers. While I am all for free market and abolishing subsidies, people need to be more careful in arguing against farm subsidies. Subsidies are wrong because they are paid out of the (unwilling) taxpayers' pockets. Americans are actually doing the rest of the world a great favor by subsidizing them to eat our food.

Local farm food is usually cheaper since your not paying for the packaging and the shipping across the country. Also the food is way fresher and healthier for consumption since it is freshly grown and has not been sitting on a shelf for days. In addition the farmers that live on the farm are used to the quiet area of the farm and using the farm as their income source. By converting the land it means the farmers and their families will lose their homes and will need to adapt to the noisy and dense areas and in addition they will need to find a new job. Also some farms have been in families for generations and will break their hearts to sell it. In conclusion the conversion of farmland into commercial areas will affect the economy and innocent

Agricultural subsidies have existed in the United States for over a hundred years. The 1916 Federal Farm Loan Act provided affordable loans to farmers. Several programs emerged during the New Deal Era that supported the development of crop insurance, limited competition, production controls and much more. A struggling finance industry in the 1980s led to an increase in the government financial support of farms, despite calls from the Reagan administration to cut subsidies. In 1996, the ‘Freedom to Farm’ law drew away from the subsidies and support market supply and demand. However, in the years following, Congress started to again funnel subsidies to the agricultural industry. The original provisions of the 1996 law would have resulted in $47 billion in subsidy cost over 7 years; instead, spending reached well over $120 billion (Orden, Paalberg, Roe, 1999).

An article written in May 2016 by James Bovard for the Wall Street Journal details the direct effects and potential related problems created when the government chooses to provide subsidies to the producers of a particular product (Bovard, 2016). The effects of the subsidies, although positive for those receiving the subsidy, can have far reaching effects on the economies and cultures of other nations.

Levels of support to US farmers has been consistently below the OECD average and shows a declining trend over time. There has also been a shift away from direct output subsidies. This includes a progressively smaller share of support directed towards market price support. Low levels of support since 2002

2. They doesn’t get a lot of economical help from the government. Their salary is very

In 2002, a dispute over agricultural trade liberalization between the United States and Brazil arose. Brazil filed a lawsuit against the United Stated in the World Trade Organization Dispute (WTO) Settlement System arguing that the subsidies the United States provided to US farmers violated WTO trade agreements and gave US farmers unfair advantages (Unit 7, lesson 5). Fortunately for Brazil, the World Trade Organization agreed with their claim and authorized them to take “punitive measures against the United States” (Cengage unit 7, 3).  As a result of that authorization, Brazil decided “to impose tariffs and lift patent protections on US goods” (Cengage unit 7, 3). In order to limit the damage that could have been created by Brazil’s actions, the United States had to make a smart move. As a matter of fact, they decided to provide cottons to Brazilians rather than removing the subsidies. Over 150 Million in subsidies have been provided to the Brazilians, in 2010 so that Brazil do not impose punitive measures (Cengage unit 7, 3). There exists both, pros and cons for subsidizing U.S. farmers. In fact, US farmer strongly support subsidies claiming that it gives the US an important industry and helps the regulations. However, subsidizing US farmers has some consequences. The cons argue that “subsidies provided to US agricultural producers create inefficiency in the global economy” (unit 7). Also, according to economists, subsidizing stands in the way of the economy growth

Subsidies distort market prices – for e.g. export subsidies distort the trade in goods and services and can

Notwithstanding, it is criticised within the EU, though subsidies can be closely connected to national economy and politics in some countries. Donald et al (2002: 176) and Halderman and Nelson (2005: 7) speculated that if the EU reduced subsidies or gave up the CAP support, EU could not export products which are imposed heavy financial support such as beef; consequently, agricultural sector would decline and induce mass unemployment and lower income level. Besides, in the case of France which is the largest recipient of CAP supports, French agriculture contributes to approximately 5% of the total EU economy; as an agriculture-rooted country, historically many people are

Rice industry is an important industry which is heavily protected and subsidised by the government in Malaysia. Rice was and still is the staple food in Malaysia and it is vital for the nation's food security. Since rice is a strategic crop in Malaysia, government put on various efforts and implemented subsidies to protect the rice industry. According to statistics from the Finance Ministry, government had subsidised a total of RM488 million in year 2012 and RM528 million in year 2013 which we can see that the amount of subsidy has increased year by year. However, the subsidisation on rice carried both merits and demerits. In this case, discussions about whether government should or shouldn’t continue subsidising essential good like rice in Malaysia will be concerned. Besides that, issue like producers will gain more from subsidy or the consumers will be discussed as well.

The EU’s (CAP) affords subsidies to EU farmers causing a competitive disadvantage for African farmers in the European market since 70% of Africans are involved in agriculture, the role played by agriculture within African economies could never be underestimated this is a particularly crucial part of the African economy.

Anyone can have the globe on their dinner plate. Literally speaking, carbon dioxide (CO2), greenhouse gases, and fossil fuel emissions play a role in imported food as does climate change. Conventional agricultural farms are known for being one of the biggest contributors to climate change. Federal policies and subsidies can aid farmers in the fight against altering the climate. Subsidies first allowed cheap commodity crops to flourish during Nixon’s presidency and while they allow farmers to grow, use, and sell cheap produce today, the machinery and transport of it has otherwise been and is destructive to the climate. The amount of fossil fuels and pollution emitted by crop, meat, and fish farms pose as a climatic risk and can be reduced

The implementation of subsidies in a specific industry cause major distortions in the market. The distortions are created because the subsidy creates a rent that is unable to be competed away. The rent that is generated is especially problematic when considering subsidies that are only available to current firms in the industry. The firms that join the industry after the subsidy is implemented are unable to compete with the lower price created by the subsidy. The benefit that the producer receives from the subsidy causes a gain in profit in the short run which the firms want to maintain into the long run. Furthermore, in the long run, since this surplus is considered a rent, the firms who receive the surplus are much better off than the