Who Benefits from Government Policies
There are many companies, taxpayers and agencies that benefit from the promotion of production of ethanol. As noted in one resource, “Big Oil pocketed tens of billions of dollars through a little known subsidy called the Volumetric Ethanol Excise Tax Credit (VEETC)” (Brazilian Sugarcane Industry Association, 2010, Take Action).
Farmers in developed countries who receive subsidies from the government reap benefits from this policy because the more corn, or sugarcane, that is produced for ethanol, the larger the profit is for the farmers. Subsidies also help these farmers in producing more products for the ethanol that is demanded. As the text states, “By lowering production costs, subsidies help domestic producers in two ways: (1) competing against foreign imports and (2) gaining export markets” (Hill, 2011, p. 207).
Taxpayers see large benefits from ethanol production, but the benefits of sugarcane ethanol are larger than those with corn ethanol. As noted in one resource, “Gasoline with sugarcane ethanol is $2.88 per gallon, where gasoline with corn ethanol is $2.92 per gallon” (Brazilian Sugarcane Industry Association, 2010, Economic Advantages).
The government, for example, in the United States, also benefits from polices set in place. As noted in one resource, “Corn ethanol production has hit record levels this year [2011], beating government goals and creating a surplus for export” (Krauss, 2011, ¶ 10).
Who Benefits from Tariff Barriers on Imported Sugarcane
As discussed in the text, there are two parties who benefit from import tariffs: the government and domestic producers. For the government, tariffs increase revenues. For domestic producers, tariffs provide the ability to afford ...
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Hill, C. W. (2011). Global Business Today (7th ed.). New York, NY: McGraw-Hill/Irwin.
Krauss, C. (2011, July 7). Ethanol Subsidies Besieged. The New York Times. Retrieved from http://www.nytimes.com/2011/07/08/business/energy-environment/corn-ethanol-subsidies-may-be-in-jeopardy.html?pagewanted=all
Peters, G., PhD (2011, February 16). A Look Behind Rising Food Prices: Population Growth; Rising Oil Prices; Weather Events. Message posted to http://ourfiniteworld.com/2011/02/16/a-look-behind-rising-food-prices-population-growth-rising-oil-prices-weather-events/
Radcliffe, B. (2011). The Basics Of Tariffs And Trade Barriers. Retrieved January 29, 2012, from http://www.investopedia.com/articles/economics/08/tariff-trade-barrier-basics.asp#axzz1ktwQdZhy
Bittman, Mark. “Bad Food? Tax it, and Subsidize Vegetables.” New York Times. 23 July 20ll. Print.
Office of Industries, U.S. International Trade Commission.(2009).Export controls: an overview of their use, economic effects, and treatment in the global trading system. Retrieved from United States International Trade Commission http://www.usitc.gov/publications/332/working_papers/ID-23.pdf
Walsh, Bryan. “America’s Food Crisis.” NEXUS. Eds. Kim and Michael Flachmann. Boston: Pearson, 2012. 166 – 173. Print.
The United States government continues to provide subsidies for the production of ethanol because the future benefits of providing ethanol subsidies outweigh the costs of providing ethanol subsidies. Since taxpayers provide the funds for ethanol subsides, the subsidies do not directly cost the government financially. In addition, by providing ethanol subsidies the government would benefit in the future because the ethanol subsidies act as a strong incentive for the people in states whose economic structures greatly benefit from the ethanol subsidies to support the government officials who continue to provide economic subsidies.
New York Times, p. 1. Riedl, M. (2011, March 30). Farm subsidies ripe for reform?
While free trade has certainly changed with advances in technology and the ability to create external economies, the concept seems to be the most benign way for countries to trade with one another. Factoring in that imperfect competition and increasing returns challenge the concept of comparative advantage in modern international trade markets, the resulting introduction of government policies to regulate trade seems to result in increased tensions between countries as individual nations seek to gain advantages at the cost of others. While classical trade optimism may be somewhat naïve, the alternatives are risky and potentially harmful.
Food production has many challenges to address: CO2 emissions, which are projected to increase by two-thirds in the next 20 years, as the global food production increases so does the number of people going hungry, with the number of urban hungry soaring. The environmental issues are not the only ones to face; politics and economic globalization take also the big part in the food world. These days agriculture and food politics has been going through many changes but mostly under the influence of its consumers; back in the days people wanted as little as safety, variety and low costs of food. Now consumers demanding way more – greater freshness, nutritional value, less synthetic chemicals, smaller carbon footprint and less harm to animals. And that’s the time when urban agriculture emerged quite rapidly delivering locally grown and healthy food. Within the political arena, there are a few still in charge of defending the conventional food industries and commercial farms to retain the upper level. Against the hopes of nutrition activists, farm animal welfare defenders, and organic food promoters, the food and agriculture sector is moving towards greater consolidation and better sustainability. Although in social and local terms, food-growing activists know their role is under attack. Caught two words in the middle, is it possible to satisfy both?
...her combination of intoxicant. There are several better plants to use, sugar cane and algae all produce far more ethanol than corn does. Keep in mind that running on electric sometimes is better than running on gas all of the time, But to see for yourself go down to the car dealership and ask for yourself.
Implementation of a tax break such as this would require action taken by the general public who is already knowledgeable about ethanol. These people must take the time to call their state and nationally elected representatives and ask for such a bill that would include the two-cent tax incentive. People must also vote for ethanol supporters when election time rolls around. Since this is a political proposal, it must be carried out by elected officials and then be supported by the public.
level. The sand is Both developed and developing countries benefit from tariff reduction. The consumer will have more choices with more products and a wider price range.... ... middle of paper ... ... Retrieved from http://www.oecd-ilibrary.org/docserver/download/0109121e.pdf?expires=1394821453&id=id&accname=guest&checksum=148EDDDFD930AFCF166F34498B8601B6.
There are two potential losers from such action. First, all domestic producers who are not competitive would lose because they would be out-competed by low-cost import. Second, all exporters who previously enjoyed local subsidies would lose because their governments cannot subsidize their production.
In order for international trade to work well, governments must allow the world market to determine how goods are sold, manufactured and traded for all to economically prosper. While all nations may have the capability to produce any goods or services needed by their population, it is not possible for all nations to have a comparative advantage for producing a good due to natural resources of the country or other available resources needed to produce a good or service. The example of trading among states comprising the United States is an example of how free trade works best without the interve...
We begin our study of free trade by understanding the four principles of individual decision making.... ... middle of paper ... ... Edge, Ken, “Free trade and Protection: advantages and disadvantages of free trade” NSW HSC online http://www.hsc.csu.edu.au/economics/global_economy/tut7/Tutorial7.html#more Accessed November 29, 2011. Net Aparijita, Sinha, “What are the disadvantages of free trade?
Food prices have been on the rise and have become a global issue. Prices have soared over the past year and a half and threaten to go up further if issues are not addressed immediately. Below is a look at how prices have been over the past year.
There are those that believe our planet has reached its maximum capacity to sustain humanity and we need to reduce our population to rectify it. It is also said that our planet is well capable of providing both the nutrition and caloric needs for humanity, both now and into the future as well. Regardless of where one’s opinion of the facts fall between these two arguments, global food security is not where it should be. Uneven development could be argued to be a cause of this. But it is not the only issue affecting the planet.