United States Government Agricultural Subsidies

Introduction

An agricultural subsidy can be defined as a grant offered to farmers for their products . These subsidies are provided in to add-on to farmers incomes , to control the costs of agricultural products in the market and to regulate supply of these products . The US government is required by the law to provide farm subsidies and is required to grant about twelve products . Some of the products that the government of US has subsidized include corn , maize wheat , barley , cotton , peanuts , milk , sugar among other products (Robert , 2004

Agricultural subsidies have

been in place ever since the early twentieth century . In the 1930s , farmers were very vulnerable to price fluctuations . This vulnerability caused them to strike in to get the governments attention . A law was passed to protect them through tariffs . This was not very successful because it caused the international market to fear imports from the US . Years later , the government introduced another law that facilitated the control of goods produced by farmers , purchase of excess products and provisions for minimum payment to farmers . These changes that were made in the 1950s are still in place today . Some slight modifications have been made but the basics have been retained

Agricultural subsidies have had a lot of changes over the past decades in the country . In the early twentieth Century there was a large chunk of the country 's population that engaged and resided in farms . At that time in history , farmers took up a large portion of grants . In the recent years , this has dramatically changed largely due to the fact that the number of farmers has reduced dramatically consequently reducing the amount of funds spent on them . A subsidy normally focuses on a particular product . This entails price considerations in that farmers are granted a certain amount of cash for a specific weight of product . On top of that payment , farmers expect a fixed price for any subsidized crop . So if market prices are lower than what farmers were promised , then the government compensates farmers for this balance . Payments are obtained from taxes meaning that the rest of the country 's population is involved on this matter

Part 1 : Government subsidies

There are scores of subsidies that re currently offered by the government . But they can all be placed under certain groupings . These are what will be examined in detail below (Robert 2004

Export subsidies can be described as a settlement between the government and farmers regarding crops or agricultural products that will be exported or sold internationally . It was initiated in to ensure that farmers have adequate funding when exporting their products . This kind of subsidization can sometimes result in farmers having extra finances . This implies that they can be able to sell their goods in target countries at a price that may be lower than cost of production . Consequently , farmers in those host countries maybe out competed . This has caused developing countries to raise an alarm . The United States has taken its exports...