Agricultural subsidies are monies given to farmers to support their operations. Subsidies may be provided directly, in the form of cash payments, or they may take the form of indirect support. For example, a government might provide low-cost crop insurance, keep prices at an artificial level, or assist farmers in other ways. Agricultural subsidies are a feature of many government budgets, and a topic of hot debate in some regions of the world.

In the case of a positive agricultural subsidy, a farmer is rewarded for growing a crop, with the subsidy usually being based on the amount of crop being grown, or the amount of the harvest. With negative subsidies, farmers are encouraged not to produce a particular crop or product. For example, if milk production is extremely high, farmers might be paid subsidies not to raise dairy cows, to reduce the amount of dairy on the open market.

Positive subsidies may be used to compensate for depressed prices. They can be especially important for commodities. Farmers may stop growing commodities if they cannot get fair prices for them, and agricultural subsidies can be used to make farming worthwhile, ensuring that the supply of a subsidy remains stable. Negative subsidies may be used to drive up prices by reducing the supply, or to limit the amount of a crop deemed to be harmful. For example, farmers in Afghanistan are paid not to grow opium poppies, and people may be paid to slaughter cows to bring the price of milk up if it has fallen.

There are a number of supportive arguments for agricultural subsidies. Many people believe that they protect the domestic agricultural industry by making farming profitable, especially in developed countries, where farmland may be more valuable as commercial real estate, so farmers need an incentive to keep farming. Protecting domestic agriculture also contributes to national security, by ensuring that there is a secure food supply.

Problems with agricultural subsidies include the fact that subsidies can keep prices for certain commodities artificially low, which may lead people to make poor nutritional choices. If there's an incentive to grow more of one commodity or another because of subsidies, farmers will produce more, and new uses for that commodity need to be developed, which can in turn result in nutritional imbalances as people eat more of something than they should. Subsidies are also viewed as contrary to the desire for fair competition, especially when subsidies cause a rift in trade relations.