Agricultural subsidy

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An agricultural subsidy is a governmental subsidy paid to farmers to supplement their income, help manage the supply of agricultural commodities, and bolster the market price of commodities. Examples of such commodities include wheat, feed grains (grain used as fodder, such as maize, sorghum, barley, and oats), cotton, rice, peanuts, and oilseeds such as soybeans.

United States

The U.S. Department of Agriculture is required by law to subsidize over two dozen commodities. Between 1996 and 2002, an average of $16 billion/year was paid by programs authorized by federal legislation dating back to the Agricultural Adjustment Act of 1938, the Agricultural Act of 1949, and the CCC Charter Act of 1948, among others.

The beneficiaries of the subsidies have changed as U.S. agriculture changes. In the 1930s, about a quarter of the U.S. population resided on the nation's six million small farms. By 1997, 157,000 large farms accounted for 72% of farm sales, with only 2% of the U.S. population residing on farms.

Congress has made dozens of changes to the program over the years, as agricultural policy and the economy has changed. One of the more recent acts was the Farm Security and Rural Investment Act of 2002, which is in effect until 2007.