Fossil Fuel Subsidies & Social Safety Nets

During the 1990s, Malawian farmers experienced a rough transition from government policies that controlled and supported the agricultural sector, such as fertilizer subsidies and price stabilization, to a more liberalized agricultural policy environment.

The European Commission's recommendations for reforming the EU's Common Agricultural Policy (CAP) - the so-called "Health Check" -have come under criticism from European governments and environmental campaigners, albeit for different reasons. On 20 November the EC unveiled proposals for the next phase of changes to European agricultural policy.

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.

A searchable database that tracks federal spending by the United States government will come on-line by 2008, following legislation passed in September. The Web-based search engine, which will include all federal funding to public and private organizations, has been hailed as a victory for transparency in government operations by a broad coalition of advocacy groups.

The U.S. refusal to make deeper cuts to its agricultural subsidies was one of the main reasons for suspension of negotiations at the World Trade Organization (WTO) in Geneva. The United States was offering more cuts, but only if other countries made much bigger cuts to their tariffs. Since the U.S. offer on subsidies was still limited and since none of the other WTO members had a mandate to get near the U.S. market access demands, governments called it quits.

The primary tools for determining the impact trade liberalization will have on poverty are multi-country Computable General Equilibrium Models (CGEM). However, the models that have been derived from this method have come to some very different results. In recent years these results have also been revised downwards, predicting more moderate gains from trade liberalization. Antoine Boukt, Sr. Research Fellow at the International Food Policy Research Institute (IFPRI), examines this phenomenon in detail, comparing the merits of the various methodologies, and explaining why their results diverge.