Why might the government offer subsidies to the farming industry?

A subsidy is a money transfer from the government to producers in order to increase supply. Subsidies can either be provided on a per unit basis or based on total value of production, an ad valorem subsidy scheme. Currently, subsidies make up a large proportion of the value of agricultural output for rural producers, although this has decreased in recent years from 79% to 68%.
* Diagram showing increase in supply from subsidy and new equilibrium points labelled.
The reasons for provision of a subsidy are manifold. First of all, subsidies decrease the cost of production as the subsidy can be used to reduce the marginal costs of the firm. This leads to an increase in the supply of the firm as firms’ costs have fallen, and as a result there is an increase in quantity from Q1 to Q2 and a fall in the price from P1 to P2.
As a result, providing a subsidy to producers can make agricultural goods more accessible to the poor. This is because a subsidy leads to a fall in the price therefore poor consumers can afford to buy more agricultural goods because the price of the goods has fallen relative to their low incomes. In other words, there is a positive income effect for poor consumers as a result of providing the subsidy. 
Moreover, subsidies can help support the rural economy by ensuring that output remains high. If output remains high there will be a large demand for agricultural labour as labour is a derived demand for agricultural output - in other words, when output increases labour demand also increases. Therefore, subsidies protect people’s jobs and incomes, and this could have multiplier effects in the non-agricultural economy as the income cycles around the circular flow of income.
Finally, subsidies can help guarantee the food supply by leading to an increase in output. If there is an increase in output then some of this surplus output can be stored. Storing this output will mitigate against seasonal variations in the weather which could have otherwise have led to a famine. Therefore, subsidies help prevent problems in the food supply.
However, there are also reasons why subsidies may not be good for the economy. If farmers become reliant of subsidies - as they appear to be with over half their income coming from subsidies - then this could lead to them becoming inefficient. This is because subsidies create disincentives to cutting costs to remain competitive as farmers can just live off the subsidies.
* Show on diagram with supply curve shifting inwards and then show new equilibrium.
In the case shown above, the inefficiencies caused by the subsidies dominate the effect of reduced production costs therefore the subsidies have a perverse effect on output and price for agricultural products.
Furthermore, subsidies could represent a significant cost to the government. If the government spends money on subsidies it cannot spend money on alternative transfers, therefore subsidies may have a significant opportunity cost if they prevent alternative forms of welfare. For example, if poverty reduction is the aim, it may be a better policy to transfer subsidies to poor people directly rather than to agriculture producers.