Global Food Prices on the Rise Essays

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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
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Barriers also support national security and are “employed by developed countries to protect certain industries that are deemed strategically important” (Radcliffe, 2011).
Who Suffers from These Policies
Tariffs on imports and barriers affect consumers and taxpayers, companies such as grocery stores, farmers who are in poor countries and nations who pay the increased price on goods. While free trade is supposed to give the consumer, or taxpayer, more choices and a reduced price on goods, adding tariffs to items that are imported defeat the purpose of providing a good at a reduced price. As stated in the text, “Consumers lose because they must pay more for certain imports” (Hill, 2011, p. 206).
Grocery stores, for example, suffer from the policies in force for import tariffs because the price of the product is higher, which creates less of a demand. If the demand has been reduced, the companies supplying the product will lose profits. Businesses who manufacture items are also negatively affected by tariffs because this imposes higher prices on the items needed to supply goods to consumers. However, this can also benefit the business because if the item costs more to produce, the consumer will pay more for the product, producing more revenue for the business. “In short, tariffs and trade barriers tend to be

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