Subsidy WatchIssue 12, May 2007


  • Sowing the seeds of failure: A critique of the 2007 US Farm Bill

    By John Frydenlund, Food and Agriculture Policy Director, Citizens Against Government Waste http://www.cagw.org

    United States farm subsidy programs are again proving to be a major obstacle to expanding international trade opportunities at Geneva meetings aimed at reviving the Doha round of trade negotiations. Opponents of farm subsidy reform may be applauding this impasse, but there is be no reason for glee from the public at large. U.S. farm subsidy programs are broken and need to be fixed.

    The farm program has been a 70-year failure. It helps rich farmers get richer, drives small farmers off the land, and is costly to both taxpayers and consumers.

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Also in this issue:

News

  • Subsidy News in Brief

    Thailand debates cutting oil subsidies

    Regulators in Thailand are debating three options for oil subsidy reform. These include ending subsidies from the State Oil Fund and oil refineries; simultaneously terminating the State Oil Fund subsidy while continuing support from refineries; or gradually eliminating the subsidy from both the oil fund and refineries. The fund spends some 500 million baht (US$ 15.5 million) per month on liquefied petroleum gas (LPG) price subsidies, or one baht per kilogramme, and 250 million baht on repaying the debt for previous LPG subsidies.

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Studies

  • NGOs criticize World Bank Group's financing of fossil fuel projects

    A series of recent non-governmental reports have stoked controversy surrounding World Bank financing of oil and gas projects.

    According to analysis carried out by the Washington-based Bank Information Center (BIC), financing for fossil fuel projects from the International Finance Corporation, an arm of the World Bank, increased over 90% between 2005 and 2006.

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  • Greenpeace estimates energy and transport subsidies in Australia

    Greenpeace has released a report that estimates total energy and transport subsidies in Australia at between A$9.3 billion and A$10.1 billion during 2005-06.

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  • Science Po examines subsidies and regulatory reform in West African cotton

    A policy brief from the Groupe d'Economie Mondiale (GEM) of the Institut d'Etudes Politiques de Paris (Science Po) examines the impact that reduced cotton subsidies in rich countries would have on West African producers, and concludes that farmers in this region are poorly placed to take advantage of improved market conditions.

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  • Laval University takes aim at Quebec’s subsidies for aluminum producers

    An "economic note" from the Montreal Economic Institute of Laval University concludes that the Canadian province of Quebec's subsidies for the aluminum producer Alcan add up to $300,000 CAD per job each year for 35 years.

    In February, the Quebec government initiated a subsidy to Alcan as part of an aluminum smelter project in the Saguenay-Lac-Saint-Jean region. To create 740 jobs, the government is giving up $2.7 billion in revenues in exchange for a $2-billion investment by Alcan, according to the study's authors, Gérard Bélanger and Jean-Thomas Bernard.

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  • IPC asks: should the Green Box be modified?

    A discussion paper from the International Food & Agricultural Trade Policy Council (IPC), authored by David Blandford and Timothy Josling, examines how the WTO's Green Box can best be utilized to meet the needs of both rich and poor countries.

    The Green Box category of subsidies was formed during the Uruguay Round of multilateral negotiations as a category of permitted subsidies which are deemed to cause minimal trade distortion. Common Green Box subsidies include support to research and development (R&D) and environmental protection.

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  • Congressional Research Service on constraints to expanded biofuels production

    A paper from the Congressional Research Service (Biofuels: Agriculture, Infrastructure, and Market Constraints Related to Expanded Production) contends that biofuels will not make a significant contribution to America's energy security, even as production is ramped up over the coming decade. The CRS also warns that an expansion of the biofuels production poses potential threats to food supplies and the environment.

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