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As the country is a large agricultural exporter, continued subsidies by other countries are a long-standing bone of contention,[16][17] with New Zealand being a founding member of the 20-member Cairns Group fighting to improve market access for exported agricultural goods.

The Farm Security and Rural Investment Act of 2002, also known as the 2002 Farm Bill, addressed a great variety of issues related to agriculture, ecology, energy, trade, and nutrition. Signed after the September 11th attacks of 2001, the act directs approximately $16.5 billion of government funding toward agricultural subsidies each year. This funding has had a great effect on the production of grains, oilseeds, and upland cotton. The United States paid allegedly around $20 billion in 2005 to farmers in direct subsidies as "farm income stabilization"[18][19][20] via farm bills. Overall agricultural subsidies in 2010 were estimated at $172 billion by a European agricultural industry association; however, the majority of this estimate consists of food stamps and other consumer subsidies, so it is not comparable to the 2005 estimate.[21]

Agricultural policies of the United States are changed, incrementally or more radically, by Farm Bills that are passed every five years or so. Statements about how the program works might be right at one point in time, at best, but are probably not sufficient for assessing agricultural policies at other points in time. For example, a large part of the support to program crops has not been linked directly to current output since the Federal Agriculture Improvement and Reform Act of 1996 (P.L. 104-127). Instead, these payments were tied to historical entitlement, not current planting. For example, it is incorrect to attribute a payment associated with wheat base area to wheat production now because that land might be allocated to any of a number of permitted uses, including held idle. Over time, successive Farm Bills have linked these direct payments to market prices or revenue, but not to production. In contrast, some programs, like the Marketing Loan Program that can create something of a floor price that producers receive per unit sold, are tied to production.[22] That is, if the price of wheat in 2002 was $3.80, farmers would get an extra 58¢ per bushel (52¢ plus the 6¢ price difference). Fruit and vegetable crops are not eligible for subsidies.[23]

Corn was the top crop for subsidy payments prior to 2011. The Energy Policy Act of 2005 mandated that billions of gallons of ethanol be blended into vehicle fuel each year, guaranteeing demand, but US corn ethanol subsidies were between $5.5 billion and $7.3 billion per year. Producers also benefited from a federal subsidy of 51 cents per gallon, additional state subsidies, and federal crop subsidies that had brought the

Agricultural policies of the United States are changed, incrementally or more radically, by Farm Bills that are passed every five years or so. Statements about how the program works might be right at one point in time, at best, but are probably not sufficient for assessing agricultural policies at other points in time. For example, a large part of the support to program crops has not been linked directly to current output since the Federal Agriculture Improvement and Reform Act of 1996 (P.L. 104-127). Instead, these payments were tied to historical entitlement, not current planting. For example, it is incorrect to attribute a payment associated with wheat base area to wheat production now because that land might be allocated to any of a number of permitted uses, including held idle. Over time, successive Farm Bills have linked these direct payments to market prices or revenue, but not to production. In contrast, some programs, like the Marketing Loan Program that can create something of a floor price that producers receive per unit sold, are tied to production.[22] That is, if the price of wheat in 2002 was $3.80, farmers would get an extra 58¢ per bushel (52¢ plus the 6¢ price difference). Fruit and vegetable crops are not eligible for subsidies.[23]

Corn was the top crop for subsidy payments prior to 2011. The Energy Policy Act of 2005 mandated that billions of gallons of ethanol be blended into vehicle fuel each year, guaranteeing demand, but US corn ethanol subsidies were between $5.5 billion and $7.3 billion per year. Producers also benefited from a federal subsidy of 51 cents per gallon, additional state subsidies, and federal crop subsidies that had brought the total to 85 cents per gallon or more. However, the federal ethanol subsidy expired 31 December 2011.[24] (US corn-ethanol producers were shielded from competition from cheaper Brazilian sugarcane-ethanol by a 54-cent-per-gallon tariff; however, that tariff also expired 31 December 2011.[25][26])

Farm subsidies in Asia remain a point of contention in global trade talks.[29][30]

China

In 2012, China provided $165 billion in agricultural subsidies.[31] In 2018, China increased their subsidies for soybean farmers in their northeastern provinces. Corn farmers, however, received reduced subsidies due to Beijing's 2017 policy that set out to reduce its huge stockpile. Soybean farmers in Liaoning, Jilin, Heilongjiang, and Inner Mongolia provinces will receive more subsidies from Beijing than corn farmers. The cutting of corn acreage and the lifting of soybean acreage came in 2016 as a push from China to re-balance grain stocks. Subsidies for agriculture machinery and equipment will also be provided by Beijing to farmers.[32]

Indonesia

In 1971, as a method of expanding the rice supply in Indonesia, the government began subsidizing fertilizer to farmers after the discovery and introduction of new, high-yielding rice varieties.[33] In 2012, Indonesia provided $28 billion in agricultural subsidies.[34]

Japan

Over the 2000s, Japan has been reforming its generous agricultural subsidy regime to support more business-oriented farmers.[35] Yet, subsidies remain high in international comparison. In 2009, Japan paid US$46.5 billion in subsidies to its farmers,[36] and continued state support of farmers in Japan remains a controversial topic.[37] In 2012, Japan provided $65 billion in agricultural subsidies.[34]

South Korea

South Korea has made attempts to reform its agricultural sector, despite resistance from vested interests.[38] In 2012, South Korea provided approximately $20 billion in agricultural subsidies.[34]

India

Agricultural subsidy in India primarily consists of subsidies like, fertilizer, irrigation, equipment, credit subsidy, seed subsidy, export subsidy etc. Subsidy on fertilizers is provided by the Central government whereas subsidy on water and irrigation is provided by th

In 2012, China provided $165 billion in agricultural subsidies.[31] In 2018, China increased their subsidies for soybean farmers in their northeastern provinces. Corn farmers, however, received reduced subsidies due to Beijing's 2017 policy that set out to reduce its huge stockpile. Soybean farmers in Liaoning, Jilin, Heilongjiang, and Inner Mongolia provinces will receive more subsidies from Beijing than corn farmers. The cutting of corn acreage and the lifting of soybean acreage came in 2016 as a push from China to re-balance grain stocks. Subsidies for agriculture machinery and equipment will also be provided by Beijing to farmers.[32]

Indonesia

In 1971, as a method of expanding the rice supply in Indonesia, the government began subsidizing fertilizer to farmers after the discovery and introduction of new, high-yielding rice varieties.[33] In 2012, Indonesia provided $28 billion in agricultural subsidies.[34]

Japan

Over the

Over the 2000s, Japan has been reforming its generous agricultural subsidy regime to support more business-oriented farmers.[35] Yet, subsidies remain high in international comparison. In 2009, Japan paid US$46.5 billion in subsidies to its farmers,[36] and continued state support of farmers in Japan remains a controversial topic.[37] In 2012, Japan provided $65 billion in agricultural subsidies.[34]

South Korea

Agricultural su

Agricultural subsidy in India primarily consists of subsidies like, fertilizer, irrigation, equipment, credit subsidy, seed subsidy, export subsidy etc. Subsidy on fertilizers is provided by the Central government whereas subsidy on water and irrigation is provided by the local State governments.[39] Drawing on the most recent estimates, annual central government subsidies to farmers would be of the order of 120,500 crore (US$17 billion) as the sum of fertilizer subsidies (70,000 crore (US$9.8 billion), 2017/18), credit subsidies (20,000 crore (US$2.8 billion), 2017/18), crop insurance subsidies (6,500 crore (US$910 million), 2018/19) and expenditures towards price support (24,000 crore (US$3.4 billion) estimated for 2016/17).[40]

Impact of subsidies

Haiti is an excellent exampl

Haiti is an excellent example of a developing country negatively affected by agricultural subsidies in the developed world. Haiti is a nation with the capacity to produce rice and was at one time self-sufficient in meeting its own needs.[53][54] At present, Haiti does not produce enough to feed its people; 60 percent of the food consumed in the country is imported.[55] Following advice to liberalize its economy by lowering tariffs, domestically produced rice was displaced by cheaper subsidized rice from the United States. The Food and Agriculture Organization describes this liberalization process as being the removal of barriers to trade and a simplification of tariffs, which lowers costs to consumers and promotes efficiency among producers.[56]

Opening up Haiti's economy granted consumers access to food at a lower cost; allowing foreign producers to compete for the Haitian market drove down the price of rice. However, for Haitian rice farmers without access to subsidies, the downward pressure on prices led to a decline in profits. Subsidies received by American rice farmers, plus increased efficien

Opening up Haiti's economy granted consumers access to food at a lower cost; allowing foreign producers to compete for the Haitian market drove down the price of rice. However, for Haitian rice farmers without access to subsidies, the downward pressure on prices led to a decline in profits. Subsidies received by American rice farmers, plus increased efficiencies, made it impossible for their Haitian counterparts to compete.[57][58] According to Oxfam and the International Monetary Fund, tariffs on imports fell from 50 percent to three percent in 1995 and the nation is currently importing 80 percent of the rice it consumes.[59][60]

The United States Department of Agriculture notes that since 1980, rice production in Haiti has been largely unchanged, while consumption on the other hand, is roughly eight times what it was in that same year.[61] Haiti is among the top three consumers of long grain milled rice produced in the United States.[62]

As rice farmers struggled to compete, many migrated from rural to urban areas in search of alternative economic opportunities.[63]

One peer-reviewed research suggests that any effects of US farm policies on US obesity patterns must have been negligible.[64] However, some critics argue that the artificially low prices resulting from subsidies create unhealthy incentives for consumers. For example, in the US, cane sugar was replaced with cheap corn syrup, making high-sugar food cheaper;[65] beet and cane sugar are subject to subsidies, price controls, and import tariffs that distort the prices of these products as well.

The lower price of energy-dense foods such as grains and sugars could be one reason why low-income people and food insecure people in industrialized countries are more vulnerable to being overweight and obese.[66]<

The lower price of energy-dense foods such as grains and sugars could be one reason why low-income people and food insecure people in industrialized countries are more vulnerable to being overweight and obese.[66] According to the Physicians Committee for Responsible Medicine, meat and dairy production receive 63% of subsidies in the United States,[67] as well as sugar subsidies for unhealthy foods, which contribute to heart disease, obesity and diabetes, with enormous costs for the health sector.[67]

Market distortions due to subsidies have led to an increase in corn fed cattle rather than grass fed. Corn fed cattle require more antibiotics and their beef has a higher fat content.[68]

Tariffs on sugar have also caused large candy makers in the US to relocate to Canada and Mexico, where sugar is often half to a third the price.[69] The Dominican Republic Central America Free Trade Agreement (CAFTA), though, has had little impact in this area. The sugar issue causing alarm had reasoning due to what plausible effects could come through the tariffs as well as the undetermined future of these types of negotiations considering sugar importation in the United States. Due to various continuing disputes in trade, Mexico began to have fewer exports of sugar into the United States, where the North American Free Trade Agreement (NAFTA) allowed. Those who left and sought out other companies for sugar have leaned marginally more towards Canada than Mexico. The tariffs are what keeps the large pressure from competition from south of the Rio Grande at bay.[69]

Non-farming companies

Subsidies are also given to companies a

Subsidies are also given to companies and individuals with little connection to traditional farming. It has been reported that the largest part of the sum given to these companies flow to multinational companies like food conglomerates, sugar manufacturers and liquor distillers. For example, in France, the single largest beneficiary was the chicken processor Groupe Doux, at €62.8m, and was followed by about a dozen sugar manufacturers which together reaped more than €103m.[70][71][72][73]

Public economics implications

The mo

The monoculture system associated with subsidized large-scale production has been implicated as a contributory factor in Colony Collapse Disorder which has affected bee populations. Bee pollination is an essential ecosystem service essential for the production of many varieties of fruits and vegetables. Subsidies often go towards subsidising meat production which has other nutritional and environmental implications; and it has been found that out of the $200Bn subsidies to subsidise crops from 1995–2010 around two-thirds of this went to animal feed, tobacco and cotton production.[76] On the other hand, farmers producing fruits and vegetables received no direct subsidies. The environmental impact of meat production is high due to the resource and energy requirements that go into production of feed for livestock throughout their lifespan, for example, a kilogram of beef uses about 60 times as much water as an equivalent amount of potato.[77] The subsidies contribute to meat consumption by allowing for an artificially low cost of meat products.[78]

Alternatives

Neoliberals argue that the current subsidies distort incentives for the global trade of agricultural commodities in which other countries may have a comparative advantage. Allowing countries to specialize in commodities in which they have a comparative advantage in and then freely trade across borders would therefore increase global welfare and reduce food prices.[79] Ending direct payments to farmers and deregulating the farm industry would eliminate inefficiencies and deadweight loss created by government intervention.

However, others disagree, arguing that a more radical transformation of agriculture is needed, one guided by the notion that ecological change in agriculture cannot be promoted without comparable changes in the social, political, cultural and economic arenas that conform and determine agriculture. The organized peasant

However, others disagree, arguing that a more radical transformation of agriculture is needed, one guided by the notion that ecological change in agriculture cannot be promoted without comparable changes in the social, political, cultural and economic arenas that conform and determine agriculture. The organized peasant and indigenous based agrarian movements, e.g. Via Campesina, consider that only by changing the export-led, free-trade based, industrial agriculture model of large farms can halt what they call the downward spiral of poverty, low wages, rural-urban migration, hunger and environmental degradation.[80]

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