A government payment to farmers to support production or income.
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A farm subsidy is a government payment or financial support to farmers to stabilise incomes, encourage production, reduce risk, or promote environmental and social goals. Subsidies take many forms: direct payments tied to land or production, price supports, crop insurance, disaster relief, input subsidies, and payments for conservation practices. They emerged prominently during the Great Depression, when the United States introduced the Agricultural Adjustment Act of 1933 to raise crop prices. The European Union's Common Agricultural Policy, launched in 1962, is one of the world's largest subsidy programmes. Subsidies can stabilise food supply and farm incomes but are criticised for distorting trade, encouraging overproduction, favouring large farms, and harming farmers in developing countries. Reforms have shifted support toward decoupled payments and environmental measures such as the EU's green architecture and the US Conservation Reserve Program. Subsidy debates remain central to WTO negotiations on agricultural trade.
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