WHAT IS AN AGRICULTURAL SUBSIDY?

By definition, a subsidy is "a sum of money granted by the government to assist an industry or business so that the price of a commodity or
service may remain low or competitive" (Google). More specifically, an agricultural subsidy is a payment by the federal government to
farmers for producing crops. These subsidies are used to protect domestic farming and maintain national defense by ensuring a secure
food supply.

HOW DID THEY BEGIN?

This basic timeline shows when agricultural subsides came about and how they have evolved. This timeline is specific to North Carolina in
some periods, such as the tobacco farmers of the 1980's, but overall consistent throughout the United States.

n.a. "Agriculture-History". North Carolina Global Learning Lab. n.d. Web. 27 October 2014.

The Agricultural Act of 2014, also known as the Farm bill, was never intended to become the permanent government program it is today.
The first Farm Bill, the Agricultural Adjustment Act, was passed in 1933 to alleviate some of the burdens the Great Depression left on
American farmers. In the 1930's, farming was a way of life in the United States and contributed significantly to the Gross Domestic Product
(GDP). That is- it played a significant role in the overall success or failure of the U.S. economy. In the early 1920-30's the agricultural sector
was rich and thriving, which led to an increase in the number of Americans who classified themselves as farmers. With more farmers in the
agricultural sector, output increased dramatically. When the Great Depression hit, prices of all goods dropped substantially because of the
reduced demand (the reduced demand was caused by a decrease in income). While an increase in supply may sound good to you as a
consumer, it is actually a bad thing because when supply exceeds demand, there is a surplus, which results in very low prices. Farmers were
unable to make a living because their crops were selling below the cost of producing. This is when the government stepped in and began
providing agricultural subsidies. According to Masterson, "The Agriculture Adjustment Act...essentially paid farmers to not grow food on a
certain percentage of their land to reduce the market glut. It also called for the government to buy excess grain, which it could later release

on the market if bad weather affected yields" (Masterson par. 7). As the United States became more industrialized over the next 60 years,
the economy became less reliant on agriculture, and more reliant on services. Many famers left the agricultural sector, leaving a large
amount of money in the Farm Bill that was being unused. Congress responded by filling the budget with spending on Food Stamps, which
very quickly overtook the so-called "Farm Bill."

Ryan, Dave. "China Texas has a homemade photo-history museum".

Beaumountenterprise.com. 26 July 2013. Web. 26 October 2014.

Travis, Paul, and Jeffery B. Robb. "Corn". Oklahoma Historical Society's Encyclopedia
of Oklahoma History & Culture. n.d. Web. 26 October 2014.

WHAT CROPS GET SUBSIDIZED?

Of the $956 Billion in spending on the Agricultural Act of 2014, only 20% benefits farmers directly. This chart shows a breakdown of the
spending by crop. Corn receives the largest portion of subsidies, followed by cotton and wheat. These are considered staple products,
meaning that they are the most commonly produced crops in the United States. Corn is most heavily subsidized because it is used in a
number of different products, such as ethanol, animal feed, and many consumer foods ("Hearing to Review"). You may notice, however, that
fruits are omitted from this graph. That is because fruits are not subsidized by the federal government, which has caused numerous people
to question this decision.

n.a. "Hearing to Review U.S. Farm Safety Net Programs". Committee on Agriculture. 17 June 2010. Print. 10 October 2014.

Sources:
Masterson, Kathleen. "The Farm Bill: From Charitable Start To Prime Budget Target." National Public Radio (NPR). 26 September 2011. Web.
16 September 2014.
n.a. "Agriculture-History". North Carolina Global Learning Lab. n.d. Web. 27 October 2014.
n.a. "Hearing to Review U.S. Farm Safety Net Programs". Committee on Agriculture. 17 June 2010. Print. 10 October 2014.
Ryan, Dave. "China Texas has a homemade photo-history museum". Beaumountenterprise.com. 26 July 2013. Web. 26 October 2014.
Travis, Paul, and Jeffery B. Robb. "Corn". Oklahoma Historical Society's Encyclopedia of Oklahoma History & Culture. n.d. Web. 26 October
2014.