Subsidies keep prices for US goods on the international market low (so low that our farmers, in fact, sell their goods at a loss - but our government pays them the difference). Keeping prices low keeps exports high. Exports are a vital source of revenue (see above).
An aside - subsidies and other government handouts to agriculture encourage overproduction, increasing supply and lowering the price of goods on the market even more, which creates an even greater dependence on exports and subsidies ... which leads to overproduction ... in a self-propagating cycle. (Paul Roberts' recent book goes into more detail.)
Shaun sent this article today that depicts beautifully what I was trying to say with all those words above.
It's from today's Washington Post:
Bush War on Roquefort Raises a Stink in France
Europe doesn't want our beef because we put hormones in it. But we have to export our beef! (See above.) So, tit-for-tat, we're blocking Europe's cheese:
In its final days, the Bush administration imposed a 300 percent duty on Roquefort, in effect closing off the U.S. market. Americans, it declared, will no longer get to taste the creamy concoction that, in its authentic, most glorious form, comes with an odor of wet sheep and veins of blue mold that go perfectly with rye bread and coarse red wine.No more San Pellegrino? It's cutthroat out there.
The measure, announced Jan. 13 by U.S. Trade Representative Susan C. Schwab as she headed out the door, was designed as retaliation for a European Union ban on imports of U.S. beef containing hormones. Tit for tat, and all perfectly legal under World Trade Organization rules, U.S. officials explained.
Besides, they said, Roquefort is only one of dozens of European luxury products that were attacked with high tariffs. The list includes, among other things, French truffles, Irish oatmeal, Italian sparkling water and "fatty livers of ducks and geese," which apparently is how Washington trade bureaucrats say foie gras.