Counter-productive agricultural subsidies

Other Names:
Perverse farming subsidies
Over-subsidized agriculture
Excessive subsidies to farmers
Over-dependence on farm subsidies
Domestic agricultural price difficulties

Agricultural subsidies have been heavily criticized for years and recently have been identified by the World Trade Organization as needing reform.

Agriculture in the European Union (EU) is driven largely by the Common Agricultural Policy (CAP), a price support mechanism that consumes nearly half of the budget of the EU. Most of the 40 billion euro annual cost comprises direct payments to farmers, maintaining EU prices above those of the global market by taxing imports, subsidising exports and paying for food storage when no market is available. Farmers also find the current CAP system to be flawed. As an example, the system of headage payments (a payment for each sheep) resulted in overstocking followed by price collapses, poorer quality animals and environmental degradation. The high stock density could have also favoured the spread of foot and mouth disease.

Related UN Sustainable Development Goals:
GOAL 2: Zero HungerGOAL 8: Decent Work and Economic GrowthGOAL 12: Responsible Consumption and Production
Problem Type:
E: Emanations of other problems
Date of last update
21.02.2020 – 19:26 CET