Western governments' interference in the economy, types of subsidies to economic sectors
Western governments' interference in the economy, types of subsidies to economic sectors, with different models; agricultural subsidies
*One of the great lies of liberal democracy is the lack of government intervention in the economy, and they claim that everything is "based on the market mechanism and supply and demand."*
Contrary to the propaganda and illusions about the absence of subsidies in industrialized countries, the reality is that all of them have various types of subsidies, both direct and indirect (preferential subsidies, tax exemptions, etc.), and the European Union does too.
*In the European Union, various subsidies are paid to agriculture by the countries themselves as well as the European Union under the title of Common Agricultural Policy (CAP).*
Agriculture has always been a strategic sector in Europe. After World War II, European countries faced food shortages, unstable agricultural markets, and widespread rural poverty. * For this reason, the member states of the European Union created a common system to support farmers and secure food production. This system became known as the Common Agricultural Policy (CAP), officially launched in 1962.*
A large part of these payments are calculated based on the number of hectares of agricultural land, which you can refer to the European Parliament's information on the CAP. This has led to protests that the subsidies go into the pockets of the rich.
Despite its importance, the CAP system has faced significant criticism for many years. One major criticism is that a large portion of subsidies goes to wealthy landowners and major agricultural corporations. Investigative reports have shown that some billionaires and industrial-scale agribusinesses benefit heavily from EU agricultural subsidies.
CAP payments are mainly given to:
- active farmers
- agricultural companies
- family farms
- livestock producers
- environmentally compliant farms
Around 6 million farms receive CAP support every year.
Date:
- European Parliament Fact Sheet: 2025 archive
- European Commission: May 2026
URLs:
- https://www.europarl.europa.eu/factsheets/en/sheet/109/the-common-agricultural-policy-cap
- https://agriculture.ec.europa.eu/common-agricultural-policy/financing-cap/beneficiaries_en
Do only small farmers get paid?
No. Large farms also receive substantial subsidies.
According to EU data:
- farms larger than 250 hectares receive about 23% of direct payments
- small farms under 5 hectares receive around 6% of payments
Date:
- European Commission page updated/crawled 2026
URL:
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Agricultural Subsidies in the European Union: Structure, Objectives, and Challenges
Introduction
Agriculture has always been a strategic sector in Europe. After World War II, European countries faced food shortages, unstable agricultural markets, and widespread rural poverty. For this reason, the member states of the European Union created a common system to support farmers and secure food production. This system became known as the Common Agricultural Policy (CAP), officially launched in 1962.
Today, CAP is one of the European Union’s largest financial programs. Its main objectives are to guarantee food security, stabilize agricultural markets, support farmers’ incomes, and promote rural development. In recent decades, environmental protection and climate change mitigation have also become central goals of the policy.
This article examines the structure of EU agricultural subsidies, the main beneficiaries, environmental reforms, and the major criticisms surrounding the CAP system.
Structure of EU Agricultural Subsidies
The Common Agricultural Policy is based on two major pillars:
- Direct payments to farmers
- Rural development programs
Direct payments represent the largest part of the CAP budget. In most cases, these subsidies are calculated according to the size of agricultural land. Therefore, larger farms usually receive larger payments. The European Union considers this mechanism necessary to stabilize farmers’ incomes, since agriculture is highly vulnerable to weather conditions, market fluctuations, and global crises.
The second pillar focuses on rural development. These programs support infrastructure projects, farmer training, technological innovation, and environmental protection in rural areas. Their goal is to reduce economic inequalities between urban and rural regions.
Official sources:
https://agriculture.ec.europa.eu/common-agricultural-policy_en
https://www.consilium.europa.eu/en/policies/the-common-agricultural-policy-explained/
Accessed: May 2026
Who Receives the Subsidies?
CAP subsidies are distributed among a wide range of agricultural actors. Family farms, livestock producers, agricultural corporations, and food producers may all receive support. However, applicants must generally qualify as “active farmers.”
According to EU statistics, approximately six million farms benefit from CAP support every year. Nevertheless, the distribution of subsidies has been highly controversial. Because payments are largely based on land ownership, large farms and agribusinesses receive a substantial share of the available funds.
Several reports indicate that very large farms receive a disproportionate amount of subsidies, while small farms receive relatively limited support. Critics argue that this system increases inequality in rural Europe.
Sources:
https://agriculture.ec.europa.eu/common-agricultural-policy/financing-cap/beneficiaries_en
https://www.europarl.europa.eu/factsheets/en/sheet/109/the-common-agricultural-policy-cap
Accessed: 2025–2026
Environmental and Green Subsidies
In recent years, the European Union has attempted to align agricultural policy with environmental goals. Under the CAP 2023–2027 framework, new programs called “Eco-Schemes” were introduced. These programs provide additional financial support to farmers who adopt environmentally sustainable practices.
For example, farmers may receive extra subsidies for:
- organic farming
- reducing chemical fertilizers
- protecting biodiversity
- improving animal welfare
- reducing carbon emissions
The EU believes agriculture plays a critical role in combating climate change and that environmental reforms are essential for long-term sustainability.
Source:
https://agriculture.ec.europa.eu/common-agricultural-policy/income-support/eco-schemes_en
Accessed: 2026
Criticism and Challenges
Despite its importance, the CAP system has faced significant criticism for many years. One major criticism is that a large portion of subsidies goes to wealthy landowners and major agricultural corporations. Investigative reports have shown that some billionaires and industrial-scale agribusinesses benefit heavily from EU agricultural subsidies.
Environmental groups also argue that certain CAP policies have contributed to biodiversity loss, environmental degradation, and intensive industrial farming practices. In response, the EU has introduced stricter environmental conditions in recent reforms.
At the same time, farmers’ protests across Europe have intensified. Many farmers argue that environmental regulations increase production costs and reduce competitiveness in global markets.
Publication dates: 2024–2025
Conclusion
The European Union’s agricultural subsidy system is one of the largest agricultural support mechanisms in the world. It has played an important role in ensuring food security, supporting farmers’ incomes, and maintaining rural economies. However, unequal distribution of subsidies, environmental concerns, and growing social tensions demonstrate that the system faces major challenges.
The European Union is currently attempting to balance economic support for farmers with environmental protection and social fairness. The success or failure of these reforms may significantly influence the future of European agriculture and the global food market.
Full text of articles and content pdf
https://ble.ir/barayemotalehe1/6665051991227173180/1779730742645
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