<WRAP = 760><FONTNAME = arial16.dds><FONTSIZE = 16><COLOR = 255,255,255,255> Possibly the best known system of agricultural subsidy is the European 'common agricultural policy' or 'CAP'. The CAP accounts for approx 44% of the entire EU budget. The system sets minimum commodity prices and also makes direct payments to farmers for each hectare of land maintained in suitable agricultural condition. The CAP was part of the 'Treaty of Rome' signed in 1958, and reflected food shortage concerns arising during the second world war.
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Critics of the CAP say it amounts to wholesale subsidization of EU agriculture, which puts countries such as Africa at a trade disadvantage. The OECD countries spend more on food subsidies than the GDP of Africa. One report in 2003 estimated that the average EU dairy cow received $913 in subsidies.
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One of the most controversial aspects of the CAP is it's use of 'set-aside' subsides, where farmers could remove a certain proportion of their land from farming production, and yet still be paid for it, effectively being subsidized not to do anything.
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The USA also has powerful agricultural subsidies, despite a decrease in the importance of farming to the economy. The proportion of US citizens working in agriculture has fallen from 25% in the 1930s to roughly 2% now. The US department of agricultures 2008 budget is set at $89 billion, of which approximately 16 billion goes in direct aid to farmers. There is also a total of approx 2 billion in support for ethanol production.