<P> Tariffs on sugar have also caused large candy makers in the USA to relocate to Canada and Mexico, where sugar is often half to a third the price . The Dominican Republic Central America Free Trade Agreement (CAFTA), though, does not seen to be very impact in this area but known to not amounting to much . The sugar issue causing alarm had reasoning due to what plausible effects could come through the tariffs as well as the undetermined future of these types of negotiations considering sugar importation in the United States . Due to various continuing disputes in trade, Mexico began to have fewer exports of sugar into the United States, where the North American Free Trade Agreement (NAFTA) allowed . Those who left and sought out other companies for sugar have leaned marginally more towards Canada than Mexico . The tariffs are what keeps the large pressure from competition from south of the Rio Grande at bay . </P> <P> Subsidies are also given to companies and individuals with little connection to traditional farming . It has been reported that the largest part of the sum given to these companies flow to multinational companies like food conglomerates, sugar manufacturers and liquor distillers . For example, in France, the single largest beneficiary was the chicken processor Groupe Doux, at € 62.8 m, and was followed by about a dozen sugar manufacturers which together reaped more than € 103m . </P> <P> Government intervention, through agricultural subsidies, interferes with the price mechanism which would normally determine commodity prices, often creating crop overproduction and market discrimination . Subsidies are also an inefficient use of taxpayer's money . For instance, in 2006, the Department of Agriculture estimated that the average farm household income was $77,654 or about 17% higher than the average US household income . From a public economics perspective, subsidies of any kind work to create a socially and politically acceptable equilibrium that is not necessarily Pareto efficient . </P> <P> The monoculture system associated with subsidized large - scale production has been implicated as a contributory factor in Colony Collapse Disorder which has affected bee populations . Bee pollination is an essential ecosystem service essential for the production of many varieties of fruits and vegetables . Subsidies often go towards subsidising meat production which has other nutritional and environmental implications; and it has been found that out of the $200 Bn subsidies to subsidise crops from 1995--2010 around two thirds of this went to animal feed, tobacco and cotton production . On the other hand, farmers producing fruits and vegetables received no direct subsidies . The environmental impact of meat production is high due to the resource and energy requirements that go into production of feed for livestock throughout their lifespan, for example, a kilogram of beef uses about 60 times as much water as an equivalent amount of potato . The subsidies contribute to meat consumption by allowing for an artificially low cost of meat products . </P>

Effect of subsidy and taxes on agricultural production
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