Question

please write around 100 words to shortly summrize your understanding about the European Agricultural Subsidy esp. cost and benefit analysis, side effects. thanks

Answer 1

Agricultural subsidy is a government incentive paid to farmers and agricultural organizations to suppliment their income, manage supply of agricultural commodities , and influence the cost and supply of such commodities.

Agriculture Subsidy enables Social efficiency.Agriculture subsidies were originally aimed at stabilizing markets,help low income farmers and promote rural developments.The budget cost of agricultural subsidy have been one of the major driving forces of agricultural reform of europe in the past.The cost and transfers arising from the operation of the price support element of the agricultural programme for the european union as whole can be estimated by applying the standard partial equilibrium analysis of export subsidy for an import tariff.If each member state financed its own transfers to its own farmers , the same analysis would apply the member state level.

European subsidy for agriculture are contributing rapidly rising food prices and the distruction of small scale farming.Critics have long protested the way in which these subsidy distort global agriculture and trade .

The world trade organizations DOHA Round in 2001 many developing nations- including brazil , china and india - opposed agricultural subsidies in the US and EU they are argued that high subsidies were artificially driving down global crop prices , unfairly undermining small farmers and maintaing poverty in many developing countries .Environmental degradation is a regular by-product agricultural practices.Green house gases , mass irrigation, water quality issues, and disrupted eco systems are examples of side effects that agricultural has on the environment. Subsidies encourage wastefull managment of energy, materials and natural resources.Subsidies have also contributed to an increase in the use of chemicals and pesticides in agricultural practices.