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Politics : Formerly About Advanced Micro Devices
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To: tejek who wrote (323780)1/30/2007 6:56:12 PM
From: TimF  Read Replies (1) of 1574289
 
"Government subsidies for ethanol do increase demand for corn, as do government requirements that ethanol be used, and government tariffs on importing ethanol (from countries where they wouldn't use corn to make it)."

Yes, but what does that have to do with anything.

It means

1 - That ethanol (at least as produced in the US) isn't growing because its competitive, but because the government subsidises it

and

2 - The price for food is increased by these subsidies (although not to the extent that would probably be noticed by most Americans)

Re: "The Impacts of Free TradeWhile many of the arguments for NAFTA rested onassumptions around idealized free markets and theirbenefits, the reality on the ground has been rather differ-ent. Since Mexico began importing corn from the UnitedStates, Mexican producers have found themselves com-peting directly with U.S. producers selling at prices signif-icantly lower than those in Mexico. Low U.S. corn pricesset the international price because the U.S. is the largestproducer and exporter of the crop.25International cornprices are currently $1.74 a bushel and the latest U.S.Department of Agriculture figures show production costsat about $2.66 a bushel."

In other words there is free or nearly free trade between the US and Mexico in corn (a good thing) but the US heavily subsidizes corn growing which distorts the market.
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