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Write 2 page essay on the topic Topic: The effects of ethanol subsidies on food prices.Download file to see previous pages... The reason for this is the tight market for maize created by high gasoline
Write 2 page essay on the topic Topic: The effects of ethanol subsidies on food prices.
Download file to see previous pages...The reason for this is the tight market for maize created by high gasoline prices which has continued to push up the demand for ethanol. From this experience, it may be hypothesized that the existence of subsidies on ethanol leads to an increase in the prices of food products. Main Objective 1. To determine the effects of ethanol subsidies on food prices Specific Objectives 1. To establish the relationship between ethanol production and food production 2. To establish food prices prior to the removal of subsidies on ethanol 3. To establish changes in prices of food after the removal of subsidies on ethanol 4. To establish if there is a correlation between the existence of ethanol subsidies and food prices Literature review The major argument behind the issue of ethanol subsidies is that whenever the prices of energy are high and the value of a crop in the energy market surpasses that in the food market, crops produced will be diverted to the production of bio-fuels such as ethanol. The use of bio-fuels helps to maintain low the prices of motor vehicle fuels while at the same time minimizing dependence on petroleum imports.
