Editing Agricultural policy (section)

== Policy tools ==
An [[agricultural subsidy]] is a governmental subsidy paid to farmers and agribusinesses to manage the agricultural industry as one part of the various methods a government uses in a [[mixed economy]]. The conditions for payment and the reasons for the individual specific subsidies vary with farm product, size of the farm, nature of ownership, and country among other factors. Enriching peanut farmers for political purposes, keeping the price of a staple low to keep the poor from rebelling, stabilizing the production of a crop to avoid famine years, encouraging [[Agricultural diversification|diversification]] and many other purposes have been suggested as the reason for specific subsidies.

[[Price floor]]s or [[price ceiling]]s set a minimum or maximum price for a product. [[Price controls]] encourage more production by a price floor or less production by a price ceiling.
A government can erect trade barriers to limit the number of goods imported (in the case of a Quota Share) or enact tariffs to raise the domestic price of imported products. These barriers give preference to domestic producers.