Agricultural subsidy

An agricultural subsidy (also called an agricultural incentive) is a government incentive paid to agribusinesses, agricultural organizations and farms 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 (grain used as fodder, such as maize or corn, sorghum, barley and oats), cotton, milk, rice, peanuts, sugar, tobacco, oilseeds such as soybeans and meat products such as beef, pork, and lamb and mutton. The Federal world of agricultural subsidies was originally instituted to stabilize markets, help low-income farmers, and aid rural development. In the United States, President Franklin D. Roosevelt signed the Agricultural Adjustment Act, which created the Agricultural Adjustment Administration (AAA). This came as a result of the series of programs, public work projects, financial reforms and regulations enacted by the president known as the New Deal. The AAA helped to regulate agricultural production by reducing surplus and controlling the supply of agricultural products in society. Through the control of seven crops (corn, wheat, cotton, rice, peanuts, tobacco and milk), Congress was able to balance the supply and demand for farm commodities by offering payment to farmers in return for taking some of their land out of the farming process. Unlike traditional subsidies that promote the growth of products, Congress recognized that agricultural prices needed to be boosted and did so by limiting the growth of these crops. In Europe, Common Agricultural Policy (CAP) was launched in 1962 to improve agricultural productivity. According to the European Commission, the act aims to In 2010, the EU spent €57 billion on agricultural development, of which €39 billion was spent on direct subsidies. Agricultural and fisheries subsidies form over 40% of the EU budget. Since 1992 (and especially since 2005), the EU's Common Agricultural Policy has undergone significant change as subsidies have mostly been decoupled from production. The largest subsidy is the Single Farm Payment.