Overview The current environmental crisis in the world attributed to the increased global warming has got so many stakeholders involved in trying toresolve the crisis. One of the major stakeholders involved in the resolution of this crisis is the United States of America. The country has set aside several policies to tackle the problem of environmental protection and energy problems. Several of these policies have been set to target certain target groups so as to benefit the said group. Subsidies offered to corn producers in Iowa have been a blessing to these farmers, fuel producers and fuel consumers (Gwartney 29).
The corn farmers of Iowa were offered loans and subsidies to develop farms and sell their corn to energy producing companies in several parts of the United States. However, involving other stakeholders in the receiving subsidies as an incentive in lowering energy prices creates confusion. Offering incentives to different parties ends up benefiting undeserving organizations or citizens. We witness that when subsidies were offered to Iowa corn farmers they reaped well and as an interest group they benefitted (Zonis 68). This is in contrast to subsidies being offered on a cross-national level whereby special interest groups such as Iowa farmers are left out.
Research has shown that when subsidies are offered at a national level in the US, these subsidies end up benefitting companies which are capital savvy and do not need these subsidies. For the US department of energy’s clean energy programme benefitted two major segments of low-carbon power generation and the Advanced Technology Vehicle Manufacturing loan (Gwartney 56). Within these two segments it is only three firms which took the lion share of the funding and implemented the loan share programme.
According to several researchers and interested parties, government incentive or subsidy programmes should change/subsidize the outcome. Through offering of subsidies directly the government the US citizens will have an opportunity to purchase more clean and efficient vehicles and thus create a demand to be filled by vehicle producers such as Ford (Zonis 42). Nevertheless, some people oppose the handing out of subsidies and they argue that offering subsidies does not give the chance for Americans to choose the best option of product e. g.
fuel to purchase. The offering of subsidies in a targeted manner towards certain cause is the most preferred manner to offer subsidies. This is because these subsidies will create a demand that will sustain the achievement of the common good or goal trying to be achieved. Government subsidies are most of the times not very effective because of the competing interests of different groups. This is because achieving broad based agreement to the terms to be used in implementing a given subsidy to the benefit of a large group is difficult (Gwartney 94).
In addition, the interest of a large interest group is varied and thus conflicts rise which ruin the implementation of the subsidy. As in the case of Iowa farmers, their collection forms a small group with similar interests and therefore, implementing subsidies to this group is easy. Implementing on a small group of people is easy in this case as of Iowa farmers and benefits can be accrued on a small or national level (Behboodi 18). Works Cited Behboodi, Rambod. Industrial Subsidies and Friction in World Trade: Trade Policies affected by Subsidies.
Chicago, IL: Cengage Learning, 2003. Print. Gwartney, James, Stroup, Richard and Sobel, Russell. Economics: Private and Public Choice. San Francisco, CA: Penguin Books, 2008. Print. Zonis, Marvin, Lefkovitz, Dan and Wilkin, Sam. Risk Rules: How Local Politics Threaten the Global Economy. Boston, MA: John Wiley and Sons, 2011. Print.