Global Food Prices on the Rise Essay -- Economics, Global Government

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, â€Å"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, â€Å"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, â€Å"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, â€Å"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 ... ...ed January 29, 2012, from http://e360.yale.edu/feature/the_case_against_biofuels_probing_ethanols_hidden_costs/2251/ 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