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A subsidy is a direct or indirect payment to individuals or firms, usually in the form of a cash payment from the government or a targeted tax cut. In economic theory, subsidies can be used to offset market failures and externalities to achieve greater economic efficiency.

Payments to both commercial firms and low-income individuals are examples of direct subsidies. This could include housing allowances, food vouchers for low-income families, or payments to private businesses as ?cash in the bank? payments.

Most direct subsidies are for large producers of corn, soybeans, wheat, cotton, and rice?not for livestock producers or fruit and vegetable growers. About one??third of the nation's two million farms receive regular subsidies, although that ratio is higher for larger farms. Insurance.

Input subsidies increase the purchasing power of large numbers of small farmers, lower food prices through higher production, greater access to micronutrient foods thereby improving food and nutrition security.

In the most general terms, a subsidy can be. defined as any government assistance that (i) allows consumers to purchase goods. and services at prices lower than those offered by a perfectly competitive private.

Subsidies support cheap, high-sugar diets centered on processed, low-nutrition foods made from commodities like dairy, corn, and wheat.

A subsidy is money that is paid by a government or other authority in order to help an industry or business, or to pay for a public service.