GLOBAL SUBSIDIES INITIATIVE
Subsidy WatchIssue 13, June 2007
Commentary
News
The European Commission (EC) has recommended to the European Parliament that the existing system of subsidies to coal production in the EU should remain unchanged.
The "Commission Report on the Application of Council Regulation (EC) No 1407/2002 on State Aid to the Coal Industry", issued on 21 May, examines the application of Council Regulation No 1407/2002 ("the Coal Regulation") which has regulated state aid to coal production in the EU since coming into force in July 2002.
A bill has been introduced in the United States Senate which would offer incentives to farmers who plant switchgrass and other cellulosic ethanol feedstocks.
The proposed Biofuels Innovation Program Act (BIP), introduced on 23 May by Corn Belt Senators John Thune of South Dakota and Ben Nelson of Nebraska, aims to help the cellulosic ethanol industry overcome market barriers so that it can compete with and supplement corn-based ethanol.
A number of American Congressional leaders are in the process of drafting bills to support the production of liquid coal under the banner of energy independence, according to a report in the New York Times newspaper.
Over the last several months the Spanish government has been negotiating with the wind power industry group Asociación Empresarial Eólica (AEE) in an effort to reach a compromise over proposed reductions to renewable energy subsidies.
Renewable generation accounted for 18.8 percent of total energy generation in Spain last year, which the Ministry of Industry says is proof that the current levels of subsidies are not necessary.
Studies
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US report finds ethanol production could have major impact on food prices
A study released by Iowa State University's Center for Agricultural and Rural Development (CARD) points to the threat of increased food prices as a result of the expanding ethanol production in the US Corn Belt.
Emerging Biofuels: Outlook of Effects on U.S. Grain, Oilseed and Livestock Markets, states that the increased price of corn due to subsidized ethanol production is already being felt by the livestock sector, but the worst may be yet to come.
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Experts weigh in on the 2007 Farm Bill and beyond
The American Enterprise Institute, a non-profit research institute, has commissioned eighteen well-known agricultural economists to ascertain the effects of current U.S. agricultural subsidies, spending programs, and regulations, and to offer policy recommendations.
The 2007 Farm Bill & Beyond was directed by Bruce Gardner, professor of agricultural economics at the University of Maryland, and Daniel Sumner, director of the Agricultural Issues Center at the University of California.
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Finnish report says removal of export subsidies would increase price of milk, decrease exports
A study released by the Helsinki-based Pellervo Economic Research Institute finds that a world-wide removal of export subsidies in the dairy sector would have the expected outcome of increasing producer prices and decreasing exports.
The study, entitled Implications of Export Subsidy Removal for the Finnish and EU Dairy Sectors, found that a removal of these subsidies would result in a 20% decrease in dairy export revenues for the EU-14 and United States.
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A jump in fuel prices is never welcome by the general populace. Yet in Nigeria, where fuel prices are regulated, the government has recently allowed the price of refined petroleum products' to rise, and is prepared to continue doing so.
The Nigerian government routinely imports petroleum and sells these imports at below cost on the domestic market to keep price levels down. In 2003, this subsidy on imported petroleum products amounted to more than 1% of Nigeria's Gross Domestic Product.