Agricultural Subsidy

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Agricultural subsidies and tariffs have been widely debated for several years and this is an issue that is not going away. There is no doubt that the subsidies and tariffs have benefits for some while simultaneously being detrimental to others. The chief area of concern is regarding the faceoff between developed nations, such as the United States and the European Union, and underdeveloped or growing nations, such as Brazil and African nations. What essentially is occurring is that a developed nation comes up with a price that they feel an agricultural product should be bought and sold at in the world market. Once they have this figure, if the going rate of the product dips below the number then the governments respond by giving subsidies to the farmers of their nation. These subsidies offset the dip in price and allow the developed nations farmers to still maintain their profit margin at no extra cost to them, while tariffs protect domestic farmers from cheaper, developing country export prices. If developed nations did not do this, farmers from their respective nations would not be able to compete with the far cheaper producers in developing nations. By doing so, richer nations are covering portions of the costs for the farmers allowing them to compete on the world market and in some cases dominate it. In developed nations if the subsidies were removed, it may in fact benefit the average consumer in those nations. They would be able to get their goods at a lower price while also not have to lose as much in taxes to pay for the subsidies. On the flip side, they might not have as much access to the products because in all likelihood the market for agricultural products would no longer appear feasible, thereby pushing producers out and depressing the supply. 1) background advantages and disadvantages of tariffs and subsidies 2) removal of tariffs and subsidies effect on developed nations 3) removal of tariffs and subsidies effect on developing nations and 4) a

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