Farm subsidies

In Western Europe a large number of fertilizer producers want to exit the market, but few operators are willing to expand or move into the business149. This sentiment has been reinforced by the European Commission s 2002 proposals to reform the European Union s (EU) system of farm subsidies. The Commission wants to pay farmers less for the amount they produce and more for their efforts. The Commission s goal is to 1) improve the quality and safety of food and 2) conserve the countryside149. 

The current system of farm subsidies in the United States is often mentioned as a barrier to low-input agriculture.358 To remain in a price-support system, a farmer may have to continue a monoculture with heavy inputs of fertilizers and pesticides and without crop rotation. Farm subsidies in the United States are 8.5 billion/yr.359 Conven-... 

Farm subsidies Americans pay as taxpayers, the bulk of subsidies going to the largest corporation farms ... 

From the producers point of view, net returns to farming are an important, albeit not the sole, consideration to continue fanning. These net returns are made up of gross returns for the whole farm minus input costs. The gross returns are dependent on total production (that is, yields of individual enterprises and rotation practised on the farm), product prices, and farm subsidies. 

Farm subsidies in general can lead to inefficient use of resoirrces, in organic agriculture as in conventional agriculture. In other words, subsidies in one coimtry, by affecting the price level and the quantity of production (number of farmers who can stay in business), affect farmers in other countries. This can distort the tme picture of efficiency in resource use between organic farmers in different countries bad news from an enviromnental perspective. 

Another argument for using agriculturally based additives is the potential reduction in farm subsidies it could allow. For example, use of corn starch may provide another use for the nation s corn production. 

The fuel crises and environmental concerns of the 1970s revived interest in the use of wind to produce electricity. Governmental subsidies, especially in the United States, supported both the construction of wind turbines and research, and led to the erection of large arrays of wind generators (wind farms) in a few... 

Lah, et al. (2002) reported a comparable level of economic efficiency on cattle farms in Italy due to favourable prices and additional subsidies. 

Further, the authors have carefully examined and documented the public health and environmental impacts of pesticide use in the USSR. The USSR was the largest country by territory in the world and the use of pesticide here was enormous. As the authors have shown, this happened mostly because the USSR s Communistic rulers decided at the end of the 1960 s — to turn all chemical weaponry plants (constructed in the beginning of the cold war) to pesticide production. With rich government subsidies, pesticides were distributed through all collective farms The Soviet official policy, the chemicalisation of agriculture, was an attempt to overcome its prominent ineffectiveness in crop production. 

And it is easy to observe that an agriculture based on subsidies is not sustainable, as demonstrated by many farmers who revert to conventional farming after the period of subsidy. 

In the debate about whether it is financially rewarding to farm organically, the question of what to include in the final analysis remains. The private benefits to the farmer are included. From society s point of view, another relevant factor is the difference in off-farm effects between the two management systems. This is notoriously difficult to quantify but is still relevant for the full picture of the total efficiency of the systems. In some of the studies discussed, this factor is already included in the form of subsidies and premium prices, though these extra revenues must also cover the extra cost of small-scale marketing. 

A breakdown of rural communities has taken place in the Nordic region. In Finland, for example, in their TOO-hectare loneliness , the remaining farm families now run their mechanised farms in an industrial mode. As recently as 20 years ago, there were rural communities with an average farm size of 10 ha. With fewer farms and a reduced rural population, there is loss of infrastructure and services for those who remain, further accelerating the move to urban areas. The overall situation adds external cost to the farming and food sectors, but often the cost is borne by society in the form of subsidies from the federal government or the EU, or they are passed on to future generations. 

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