Which economy has the highest percentage of farmers' subsidies?

The economy with the highest percentage of farmers' subsidies is Japan. Japan's agricultural sector benefits significantly from government support, which is structured through a variety of subsidies aimed at ensuring food security, stabilizing farmer incomes, and maintaining rural livelihoods. This high level of subsidy is a result of various policies implemented to protect domestic agriculture from international competition, as the country views agriculture as a vital component of its economy and culture.

In Japan, these subsidies contribute to higher prices for agricultural products, encouraging local production even though costs might be higher than global market prices. The focus on sustaining rural communities and producing food domestically drives the government to allocate a significant portion of its budget to agricultural support.

In contrast, while the European Union also provides substantial subsidies to its farmers, including direct payments and rural development support, Japan often allocates a higher percentage of its GDP to these subsidies. The United States and Australia have lower percentages of their economies devoted to farmers' subsidies, reflecting different agricultural policies and market structures that do not necessitate such high levels of direct financial support for their farmers.

Thus, the correct answer highlights Japan's unique approach to agricultural policy, prioritizing support for its farmers through significant subsidies.