5 Crucial Pros and Cons of Farm Subsidies

5 Crucial Pros and Cons of Farm Subsidies

by / Comments Off / 4953 View / Apr 16, 2015

In essence, farm subsidies are designed to provide support to those in the farming and agricultural industries who need it the most. In order to understand whether or not farm subsidies are a good thing, you’re going to want to weigh the pros and cons of farm subsidies very carefully. You are also going to need to keep in mind that this is a very complex issue.

The Pros of Farm Subsidies

1. Stabilizes Farming Infrastructure
On paper, there are several different components to farm subsidies that are clearly meant to work to the advantage of farmers. When utilized correctly, farm subsidies can work wonders towards creating a stabilized farming infrastructure. When farmers receive this assistance, they are in a better position to purchase the equipment and additional items needed to do their job. When farmers are capable of doing their job, the results are obviously going to be positive. Stability is established within the farming system, and the farmer is able to provide an optimal output of their product.

2. Create a Marketplace for Competition
The benefits of farm subsidies hardly end there. When farmers are able to produce an optimal level of product, with the latest equipment and tools at their command, they are also able to establish a profoundly useful degree of competition with the rest of the industry. Obviously, when one farmer dominates, the industry is going to suffer. Competition is a very necessary element to the survival and growth of the farming and agricultural industries. Farmers who receive subsidies are able to focus on production, which in turn creates an entity of farmers engaging in friendly competition with their varying affordable goods.

3. Acts as a Preventative Measure
Finally, farm subsidies also exist as a preventative measure. Without the financial and other forms of assistance provided by subsidies, a spiking in the prices of goods can occur much more easily. The results of these price spikes can be mild, in terms of the consequences, but there is also a considerable potential for those same consequences to be much more severe. Price spikes can naturally cause the price of certain goods to go up. This in turn can make the cost of eating go up. When something that is so vital to the health and overall existence of the planet becomes more expensive, the social consequences can be substantial.

In all of these areas, the benefits of farm subsidies are clear. It is easy to understand why many support farm subsidies, simply by going with the information provided above. However, the benefits do not completely cancel out the drawbacks. In order to understand the complete picture of farm subsidies, you are going to need to look at the negative elements associated with the concept.

The Cons of Farm Subsidies

The disadvantages of farm subsidies are worth taking into consideration. These downsides are notable enough to be mentioned. They also point to the reality that although farm subsidies bring a lot to the table, there are some negatives that need to be understood.

1. Negatively Impacts a Global Economy
Obviously, subsidies can’t go to everybody. This means that while some people benefit, others do not. In addition to this fact, subsidies can keep farmers from engaging in the desire to be innovative, which is something that is considered to be essential. It is also possible for farm subsidies from the United States to negatively impact the economies of other countries. This is due to the fact that many developing countries derive a great deal of their economic stability and growth from farming and agriculture. Many countries depend on farming and agriculture for as much as fifty to eighty percent of their economic health.

2. Hurts the Environment
It is even possible that farm subsidies can negatively impact the environment. When smaller farms are wiped out, the United States has to respond by bringing in goods from other countries. This can potentially increase energy demands.

Obviously, farm subsidies do come with the potential to do legitimate good.

Defining Farm Subsidies

As mentioned before, farm subsidies are designed to lend crucial support to those who need assistance within the agricultural and farming industries. It should go without saying that these industries are essential to the global economy, as well as essential to the survival of humanity as a whole.

Farm subsidies are designed to reach out to those who do not have an abundance of the materials necessary to maintain meaningful practices within the farming and/or agricultural industries. These subsidies can come in the form of payments, but the means of support offered through this U.S. government program can be realized in a variety of ways. These services extend to agribusiness, as well as farmers who are struggling to make things work on their own.

This is a basic definition of farm subsidies. From this point, you will be in a much better position to understand farm subsidies pros and cons.