The Effectiveness of Government Subsidies for Goods Essay

The Effectiveness of Government Subsidies for Goods - Essay Example Subsidies involve payment of a certain portion of the cost of production to the firm with an objective of lowering the price of the good and thereby encouraging more consumption of the same (Lines, 2005). Subsidizing farm produce has the effect of ensuring there is enough food stuff and agriculture related products in the economy. However, critics of this economic policy argue that it breeds inefficiency and misallocation of scarce resources. Objective This research will be guided by the following objective: To establish the effectiveness of government subsidies on commodities in the product market. Literature Review Conradie (2009) notes that the poor condition of most of the marine capture fisheries in the world has raised increasing public concern of late. There is an imminent economic impact of diminished resources of fish on the regions’ economies in both developed and developing world economies, as well as near commercial extinction of stocks of fish that have placed gre at impact on ecosystems. The declaration which emanated in the World Trade Organization (WTO) meeting that was held in Doha emphasized on fisheries as a sector which needs maximum considerations in the next meeting of international negotiations on world trade. While there is a concern on overfishing, the main operational concern remains the role played by subsidies in stimulation of overfishing. If it comes out that the existence of subsidies stimulate overfishing, and then there is need to come up with a control mechanism or completely eliminate the policy. Subsidies often play two key extra roles; they do stimulate fishing and may possibly raise the national income of the country (Grosh, 2008). If the fishing level is below that level that can be safely sustained in the economy, then subsidies that enhance fishing could be useful. Lines (2005) cite that subsidies could interfere with the World Trade Organization control regulations if they lie within the realms of the Internationa l Agreements on Subsidies and Countervailing Measures by the WTO. The concept of subsidies is delicate in the sense that the government introduces them for valid purposes, like economic development strategies. However, with the passage of time, subsidies that were intended for useful purposes may become entrenched and start serving primarily the desires of industry participants who receive the subsidies. Elimination of these subsidies therefore becomes a political thing in the locality, with external implications. Haddad and Shepherd (2011) argue that the policy of subsidies is a complex one due to the fact that there exist no agreement as to what a subsidy actually is. There also exists no scientific way of measuring a subsidy and evaluating its impact to the intended economic sector. At the policy level, we do not have an agreement on when subsidies can be considered harmful or useful. Part of the reason behind the existence of an agreement is the fact that it is complicated to ev aluate the impacts of subsidies in the environment, economy, internal and international trade. Part of the reason for non- agreement on what the definition of a subsidy entails is because subsidies are nowadays being eliminated by governments, it could not be politically wise for a country admitting that a policy actually implies a subsidy. Clements (1998) explains a situation where South African government, through the Department of Agriculture,

Near Earth Objects Essay Example | Topics and Well Written Essays - 1000 words

Near Earth Objects - Essay Example However, some asteroids which orbit near the sun can intersect with the earth’s path, and the results could vary from no-effect to catastrophic. Asteroids are floating masses of rocks which can also have a mix of iron and nickel. These irregularly-shaped chunks which can range from boulder-size to that of our very own moon are, thanks to Jupiter’s massive size and pull of gravity, held near the huge planet and Mars. There are different classes or types of NEAs depending on their aphelion distance, perihelion distance, and semi-major axes, namely, Aten, Apollo, and Amor. To show their differences, here is a table from the Near Earth Object Programpage of the NASA portal (â€Å"Neo Groups,† NASA Portal): Chunks of ice, dust, and rocky rubble that travel though space are called comets. Comets go much farther than asteroids do, reaching as far as the orbit of Neptune or even way beyond to a cloud surrounding the outer solar system known as the Oort cloud. Comet size usually ranges from half a mile to six miles across. A comet’s travel around the sun can take from a few years to thousands. Comets sometimes get â€Å"dislodged from their orbits by gravity and flung toward the sun, gases vaporizing off the surface create the familiar ‘tail’† (Wyckoff, â€Å"Asteroids and Comets†) that people see. Although this trail of gas and debris is considered a thing of beauty to behold, we must take note that this is due to a dislodgement in the comet’s orbit and things could certainly turn very ugly once size, speed, and direction come into play. One good example of that is the comet Shoemaker-Levy 9. In July of 1994, this catastrophic comet collided with Jupiter—the first collision of two heavenly bodies in the solar system to be observed. The comet was broken into fragments and left huge marks on the planet. Fragment A, for example, â€Å"struck