A.4. Types of Agriculture Subsidies
Different types of farm subsidies include:
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Explicit Input Subsidies |
Farmers receive these specialised cost subsidies to assist them in controlling the costs of the inputs required before production. Typically, these are given to small and marginal farmers who are unable to buy high-quality inputs on their own. Utilizing modern technologies, the goal is to maximise productivity. Utilizing modern technologies, the goal is to maximise productivity. |
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Implicit Input Subsidies |
These are covert subsidies, not payments in the traditional sense. In this situation, the input prices of the products are controlled, for instance, by low electricity costs. |
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Output subsidies |
Prices on the domestic market are kept higher than they would have been as a result of the restrictive trade rules. Similar to this, agricultural subsidies can also be classified as Direct Subsidies and Indirect Subsidies based on the method of payment. |