US subsidies – Grantstation Trendtrack Tue, 28 Jun 2022 02:24:46 +0000 en-US hourly 1 US subsidies – Grantstation Trendtrack 32 32 Menendez and Schiff alarmed that Biden again approves US military aid to Azerbaijan – Tue, 28 Jun 2022 02:24:46 +0000

Senator Menendez: “It just doesn’t make sense to say that U.S. aid and training didn’t have an impact on his [Azerbaijan’s] military balance with Armenia.

Rep. Schiff: “Under no circumstances should the United States provide military support to such a regime […] President Biden should not have waived Section 907.”

WASHINGTON—Senate Foreign Relations Committee Chairman Bob Menendez (D-NJ) and House Standing Intelligence Committee Chairman Adam Schiff (D-CA) reacted strongly to the president’s decision. Biden to again waive Section 907 restrictions on US aid to Azerbaijan, greenlighting new US military aid to the Aliyev regime despite its ethnic cleansing of the indigenous Armenian population of Artsakh (Upper Karabakh), the Armenian National Committee of America reported.

In a statement released Friday, President Menendez said, “I am deeply disappointed to see the Department of State once again make an exception to circumvent Section 907 of the FREEDOM Support Act to provide what became an annual aid to the Baku regime. Adding insult to injury, the administration chose to go ahead with this most recent waiver despite the recent release of a Government Accountability Office (GAO) report that confirmed that the Department of State and Department of Defense failed to meet legal requirements for reporting to Congress on the impact of US aid on the military balance between Armenia and Azerbaijan.

President Menendez continued: “As Azerbaijan continues to occupy more territory since its violent assault on Nagorno-Karabakh, in which more than 6,500 people died and more than 100,000 ethnic Armenians were displaced in 2020, it just doesn’t make sense to say that aid and training hasn’t impacted his military balance with Armenia. I will continue to exercise rigorous scrutiny of any assistance to Azerbaijan and expect the State Department to be transparent and provide all necessary details to Congress to assess any assistance provided to Baku.

In a comment posted to the ANCA, Speaker Schiff pledged to work with congressional allies and the Armenian American community to “remove a president’s power to waive Section 907 and urge the Biden administration to reinvigorate the peace process.” President Schiff explained: “Azerbaijan is responsible for causing a horrific war and humanitarian catastrophe in Armenia and Artsakh, killing thousands of Armenians over 44 days in September 2020 and forcing thousands more to flee. their ancestral homelands. To this day, Azerbaijan continues to illegally detain Armenian soldiers who have been subjected to torture and threaten thousands of innocent civilians in Nagorno-Karabakh who live in fear of another attack and another invasion. .

President Schiff continued: “Under no circumstances should the United States provide military support to such a regime – not only does this run counter to our nation’s core democratic values, but it could give the Aliyev regime the power to continue or intensify its provocative actions against the Armenians. President Biden should not have waived Section 907.”

ANCA Executive Director Aram Hamparian thanked President Menendez and President Schiff for speaking out against the Biden administration’s reckless move – demanding tighter congressional scrutiny and a halt to US military aid to Azerbaijan. “Not a single penny of American taxpayers’ money should go to the overtly racist and overtly aggressive Aliyev regime. We look forward to working with President Menendez and President Schiff and their colleagues on key Senate and House committees to oppose US subsidies to Azerbaijan’s genocidal violence against Artsakh and Armenia.

The ANCA ran an online campaign – – condemning President Biden’s decision and urging Congress to use all possible legislative means to eliminate military aid to Azerbaijan.

On June 23, the Biden administration reportedly notified Congress of its decision to waive Section 907 of the FREEDOM Support Act. The measure, passed in 1992, establishes statutory restrictions on U.S. aid to the Azerbaijani government “until the President determines, and reports to Congress, that the Azerbaijani government is taking demonstrable steps to end all blockade and other offensive use of force”. against Armenia and Nagorno-Karabakh. Congress included a Section 907 waiver in the Foreign Operations, Export Financing, and Related Programs Act for fiscal year 2002. Since then, U.S. presidents—Republicans and Democrats alike—have waived Section 907 every year.

During his run for office on October 14, 2020, then-nominee Biden said the United States must “fully implement and not waive the requirements of Section 907 of the support for freedom to stop the flow of military equipment to Azerbaijan”. As president, he first reversed his position on the issue on April 23, 2021 – on the eve of his historic announcement correctly recognizing the Armenian Genocide.

A US Government Accountability Office (GAO) report released earlier this year found that the State Department had consistently failed to inform Congress of the impact of more than $164 million in aid. in Baku on the military balance between Azerbaijan and Armenia. According to the GAO, the United States provided approximately $808 million in overall U.S. assistance to Azerbaijan in fiscal years 2002 through 2020.

Why is the United States about to give $52 billion to companies like Intel? | Robert Reich Sun, 26 Jun 2022 10:38:00 +0000

Congress will soon put the finishing touches on the Chips Act, which will provide more than $52 billion to companies that design and manufacture semiconductor chips.

The subsidy is demanded by the biggest chipmakers as a condition for making more chips in America.

It’s pure extortion.

The largest chipmaker in the world (in terms of sales) is already an American company – Intel, based in Santa Clara, California.

Intel hardly needs the money. Its turnover reached 79 billion dollars last year. Its chief executive, Pat Gelsinger, earned a total compensation of $179 million (which was 1,711 times higher than the average Intel employee).

Intel designs, assembles and tests its chips in China, Israel, Ireland, Malaysia, Costa Rica and Vietnam, as well as in the United States.

The problem for the United States is that Intel is not helping America deal with its current chip shortage by giving preference to American producers. And that doesn’t keep America at the forefront of new chip technologies.

Clearly, Intel would like some of the $52 billion Congress is about to throw at the semiconductor chip industry. But why exactly should Intel get the money?

Other likely beneficiaries of the Chips Act will include GlobalFoundries, which currently manufactures chips in New York and Vermont, but also in many other places around the world.

GlobalFoundries is not even an American company. It is a wholly owned subsidiary of Mubadala Investment Co., the sovereign wealth fund of the United Arab Emirates.

The country where a chipmaker (or any other global high-tech company) is headquartered has less and less to do with where it designs and manufactures. things.

Which is why every industry that can be considered “essential” is now lobbying governments for subsidies, tax cuts and regulatory exemptions, in exchange for designing and manufacturing products in this country.

It’s a giant global shakedown.

India, Japan and South Korea have all recently enacted tax credits, subsidies and other incentives worth tens of billions of dollars for the semiconductor industry. The European Union is finalizing its own chip law with $30-50 billion in subsidies.

Even China has extended tax and tariff exemptions and other measures aimed at improving chip design and production there.

“Other countries around the world … are making major investments in innovation and chip production,” said Senate Majority Leader Chuck Schumer. “If we don’t act quickly, we could lose tens of thousands of well-paying jobs to Europe.”

But who is “we”, senator?

John Neuffer, the chief executive of the Semiconductor Industry Association (the Washington lobbying arm of the semiconductor industry) warns that chip manufacturing facilities are often 25-50% cheaper to build in foreign countries than ‘in the USA.

Why is that? As he admits, this is largely due to the incentives offered by foreign countries.

As capital becomes increasingly global and mobile, it is easy for global corporations to pit nations against each other. As the chief executive of the American company ExxonMobil shamelessly declared: “I am not an American company and I do not make decisions based on what is good for the United States”.

People, on the contrary, are rooted in nations, which gives them much less bargaining power.

This asymmetry helps explain why Congress is willing to hand over $52 billion to a highly profitable global industry, but can’t even provide $22.5 billion, according to the Biden administration, to address the health crisis. current Covid public.

If public, corporations must be loyal to their shareholders by maximizing the value of their shares. But more than 40% of the shareholder value of US-based companies is owned by non-Americans.

Furthermore, there is no reason to assume that American business owners will be happy to sacrifice returns on investment for the good of the nation.

The real question is what conditions the United States (or any other country that subsidizes chipmakers) should impose on the receipt of such subsidies.

It cannot be enough for chipmakers to agree to produce more chips in the country that subsidizes them, because chipmakers sell their chips to the highest bidders around the world, regardless of where the chips are produced.

If the United States wants to subsidize them, it should demand that chipmakers give the highest priority to their US-based customers who use the chips in products made in the United States by American workers.

And Congress should require them to produce the highest value-added chip manufacturing in the United States — design, design engineering, and high-precision manufacturing — so that Americans gain that technological expertise.

What if every nation that subsidizes chipmakers demands them for itself?

Chipmakers will then have to choose. The extortion will then end.

Lawmakers’ solutions to rising oil prices Fri, 24 Jun 2022 15:32:52 +0000

TWO House of Representatives lawmakers on Friday proposed strategies to help mitigate the effects of soaring petroleum product prices as oil companies raised the cost of diesel by 3.10 pesos per liter and gasoline by 0.80 pesos per liter on Tuesday for the third consecutive year. the week.

House Vice Speaker and Davao City Third District Representative Isidro Ungab is pushing for the reallocation of part of the budget to fund his proposed Transportation Cash Grant, or “Transpo Ayuda,” which would go to public utility vehicle drivers and other groups who have been hard hit by rising oil prices, such as farmers and fishermen.

“The government could look into the possibility of shelving some projects and reallocating part of the budget to be used as cash grants, or for Transpo Ayuda, for our kababayan (citizens) to get help during this crisis,” Ungab said. .

It is in line with President-elect Ferdinand “Bongbong” Marcos Jr.’s goal of providing direct support, or ayuda, to mitigate the effects of continued rising oil prices.

While several groups have called for the suspension of the collection of excise duties and value added tax (VAT), Ungab advised against doing so as the government could lose a significant amount of funds.

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“The option to suspend taxes should be on a case-by-case basis. It is necessary to study the proposal, otherwise the government may run out of funds, which could cause a huge problem,” Ungab said.

For his part, Quezon Third District Representative Reynante Arrogancia offered three possible responses to the rising price of oil: suspend the collection of all fuel excise taxes for 90 days; continue to collect but give billions in targeted aid; or a combination of both.

Arrogancia cited US President Joseph Biden’s June 22 statement, in which he urged the US Congress to suspend the federal gasoline tax for three months and states to provide direct relief, whether by suspending their own gas taxes or helping consumers in other ways.

“Another option is that instead of suspending fuel excise taxes for 90 days, I suggest that 27 billion pesos from revenue be spent on targeted subsidies that will directly benefit poor, low-income workers and households. income or lower middle income. This is what I mean by targeted subsidies,” Arrogancia pointed out.

“Another option is a combination of the above two solutions apart from or in addition to the fuel excise tax suspension for 90 days,” he added.

The net increase for the year was adjusted to P29.50/litre for petrol, P44.25/litre for diesel and P39.65/litre for kerosene.

Food funding bill to renew some US school lunch aid Wed, 22 Jun 2022 18:05:00 +0000

With schools closed due to the coronavirus, a young girl takes free meals delivered by school bus to children in a low-income neighborhood in Falls Church, Virginia, U.S., March 20, 2020. REUTERS/Kevin Lamarque

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CHICAGO, June 22 (Reuters) – Aid that has helped schools feed millions of American children over the past two years will be extended, pending congressional approval, after senators concluded a deal after fears it would expire at the end of the month.

Pandemic aid has helped ease hunger rates for American families in recent years, but hunger has risen again after child tax credit payments expired in January, while food prices soar food weighs on family budgets. [nL1N2QA1UM][nL1N2SM3G7]

The Keep Kids Fed Act, sponsored by Michigan Democrat Debbie Stabenow and Arkansas Republican John Boozman, would extend some of the school nutrition waivers introduced in 2020. nutrition and expanded summer meal offerings.

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Agriculture Secretary Tom Vilsack said in a statement on Wednesday that the agreement would “reduce uncertainty and bring some relief to our schools, summer sites and child care feeding programs.”

The bill calls for an increase from pre-pandemic funding levels, but cuts recent funding and eligibility after several failed attempts to expand the program.

Many schools have already scrapped summer lunch programs this year, anticipating the expiry of waivers. Others say they will expand the offers if the bill passes.

“We’ve had a lot of parents ask if we serve (summer) lunches,” said Michael Gasper, nutrition services supervisor for Holmen School District in west-central Wisconsin. “We were feeding 200 to 300 children a day, in a town of 10,000 people. There was clearly a need.”

Since 2020, take-out summer meals have been available at expanded locations, doubling the meals served in 2019, according to No Kid Hungry, a child nutrition advocacy group. Read more

During the school year, federal subsidies were increased to $4.56 for each meal served, regardless of income.

The new proposal reverts to a tiered approach, increasing the reimbursement rate to $4.06 for students who qualify for free meals and 75 cents for paid meals. The bill also increased income eligibility for free meals for families to just above the previous threshold.

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Reporting by Christopher Walljasper Editing by Marguerita Choy

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Banks keep share of subsidies, payment firms say Mon, 20 Jun 2022 23:04:00 +0000 Payments companies and banks are at odds over sharing government subsidies for building payment infrastructure, three people with knowledge of the matter said.

The companies wrote to National Payments Corp. of India (NPCI), complaining that ₹700 crore out of the ₹1,500 crore granted in the budget is withheld by banks, they said. According to them, this has deprived companies connecting the last mile of the revenue promised by the state. The government provided the subsidies in exchange for waiving the Merchant Discount Rate (MDR) fee.

“Government has released ₹700 crore in subsidies to banks but they are not sharing it with any payment aggregator,” the CEO of a payment company said on condition of anonymity.

Compensation for MDR Waiver

“We raised the issue with NPCI, which is the nodal agency, but the feedback we got was that we should raise the issue with the respective banks, but they are not responding.

Last year, Finance Minister Nirmala Sitharaman announced a Rs 1,500 crore fund to accelerate the expansion of India’s digital payments industry, a move that was seen as offsetting the waiver of MDR on use Unified Payment Interface (UPI) and RuPay cards. in its previous budget.

Payment aggregators are eligible to receive a 15 basis point subsidy on low value digital transactions. One basis point is 0.01 percentage point.

“We have asked all the banks for whom we process transactions on RuPay debit cards – they do not share any subsidy amount with us,” said another CEO. “Payment aggregators have been working so hard to acquire transactions on the RuPay platform while most banks were either abandoning these cards or slowing their expansion.”

The banks did not respond to questions about this.

Currently, the cost of digital payment services such as transfer fees or interchange fees are borne by one or more payment system participants or passed on to merchants through the MDR or ultimately levied on the customer as additional charges.

The Reserve Bank of India (RBI) has said that it will conduct a comprehensive review of all aspects related to fees involved in various digital payments channels in the recently released Payments Vision 2025 document.

“We believe this review could result in relatively higher MDRs for credit cards and wallets and the introduction of MDR on UPI to at least cover the cost,” said Anand Dama, Principal Research Analyst,


As the adoption of electronic payments has surged, concerns about sustainability abound. Total digital payments grew by 216% and 10% in terms of volume and value, respectively, in March compared to the previous year, according to data from RBI.

In contrast, the use of paper instruments such as checks declined significantly over the period, with their share of total retail payments declining from 3.83% to 0.88% in terms of volume and from 19.62% to 11.47% in terms of value.

How the United States Could Lose a New Cold War Sun, 19 Jun 2022 06:00:00 +0000

The United States seems to have entered a new cold war with China and Russia. And American leaders’ depiction of the confrontation between democracy and authoritarianism fails the test of smell, especially at a time when the same leaders are actively courting a systematic human rights violator like Saudi Arabia. saudi. Such hypocrisy suggests that it is at least partly global hegemony, not values, that is really at stake.

For two decades after the fall of the Iron Curtain, the United States was clearly number one. But then came disastrous and misguided wars in the Middle East, the financial crash of 2008, rising inequality, the opioid epidemic and other crises that seemed to cast doubt on the superiority of the American economic model.

Moreover, between the election of Donald Trump, the attempted coup in the United States Capitol, numerous mass shootings, a Republican Party bent on voter suppression, and the rise of conspiracy cults like QAnon, he There is more than enough evidence to suggest that certain aspects of American politics and social life have become deeply pathological.

Of course, America does not want to be dethroned. But it is simply inevitable that China will outperform the United States economically, regardless of the official indicator used. Not only is its population four times larger than that of America; its economy has also grown three times as fast for many years (indeed, it already surpassed the United States in purchasing power parity in 2015).

While China has done nothing to declare itself a strategic threat to America, the writing is on the wall. In Washington, there is a bipartisan consensus that China could pose a strategic threat and that the least the United States should do to mitigate the risk is to stop helping China’s economy grow. According to this view, preemptive action is warranted, even if it means violating the World Trade Organization rules that the United States itself so drafted and promoted.

This New Cold War front opened long before Russia invaded Ukraine. And senior US officials have since warned that the war must not distract from the real long-term threat: China. Given that Russia’s economy is roughly the same size as Spain’s, its “limitless” partnership with China seems to have little economic significance (although its willingness to engage in disruptive activities in the world could prove useful to its larger neighbor to the south).

But a country at “war” needs a strategy, and the United States alone cannot win a new great power contest; he needs friends. Its natural allies are Europe and the other developed democracies in the world. But Trump has done all he can to alienate those countries, and Republicans – still entirely indebted to him – have provided plenty of reason to question whether the United States is a reliable partner. Moreover, the United States must also win the hearts and minds of billions of people in developing countries and emerging markets around the world – not only to have numbers on its side, but also to ensure access to essential resources.

In currying favor with the world, the United States will have to make up a lot of lost ground. His long history of exploiting other countries doesn’t help, nor does his deep-rooted racism — a force Trump expertly and cynically channels. More recently, American policymakers contributed to global “vaccine apartheid,” in which rich countries received all the vaccines they needed while people in poorer countries were left to fend for themselves. Meanwhile, America’s new opponents of the Cold War made their vaccines readily available to others at lower or lower cost, while helping countries develop their own vaccine production facilities.

The credibility gap is even greater when it comes to climate change, which disproportionately affects those in the Global South with the least capacity to cope. While major emerging markets have become the largest sources of greenhouse gas emissions today, cumulative emissions from the United States are still by far the largest.

Developed countries continue to contribute and, even worse, have not even fulfilled their meager promises to help poor countries deal with the effects of the climate crisis caused by the rich world. Instead, US banks are contributing to looming debt crises in many countries, often revealing a depraved indifference to the resulting suffering.

Europe and America excel at lecturing others on what is morally right and economically sensible. But the message that usually gets through – as the persistence of US and European farm subsidies clearly shows – is “do as I say, not as I do”. Especially after the Trump years, America no longer has any claim to moral superiority, nor the credibility to dispense advice. Neoliberalism and trickle-down economics were never widely embraced in the Global South, and now they are out of fashion everywhere.

At the same time, China has excelled not in delivering conferences, but in providing physical infrastructure to poor countries. Yes, these countries are often heavily indebted; but, given the behavior of Western banks as creditors in the developing world, the United States and others are hardly in a position to point fingers.

I could go on, but the point must be clear: if the United States is going to embark on a new Cold War, it had better understand what it will take to win. Cold wars are ultimately won with the soft power of attraction and persuasion. To emerge victorious, we must convince the rest of the world to buy not only our products, but also the social, political and economic system that we sell.

The United States may know how to make the best bombers and missile systems in the world, but it will not help us here. Instead, we must offer concrete help to developing countries and emerging markets, starting with a waiver on all Covid-related intellectual property so they can produce vaccines and treatments themselves.

Equally important, the West must once again make our economic, social and political systems the envy of the world. In the United States, this begins with reducing gun violence, improving environmental regulations, addressing inequality and racism, and protecting women’s reproductive rights. Until we have proven ourselves worthy to lead, we cannot expect others to march to our drum.

History … moral height

Europe and America excel at lecturing others on what is morally right and economically sensible. But the message that usually gets through – as the persistence of US and European farm subsidies clearly shows – is “do as I say, not as I do”.

Especially after the Trump years, America no longer has any claim to moral superiority.

*Written by Joseph E. Stiglitz, Nobel Laureate in Economics and University Professor at Columbia University – Project Syndicate

WTO members ‘fully’ agree on all issues, including fisheries subsidies: report Fri, 17 Jun 2022 07:07:45 +0000 The objective of the Indian team at the WTO was to protect the interests of fishermen and farmers. The Indian delegation, led by Trade and Industry Minister Piyush Goyal, was continuously receiving advice and guidance from Prime Minister Narendra Modi, sources said.

12th WTO Ministerial Conference in Geneva. Twitter/@wto

Geneva: After two nights of intense negotiations, members of the World Trade Organization (WTO) are set to announce a package of measures, including a response to COVID-19 and measures to control fishing subsidies harmful, sources said on Friday.

After a hiatus of about nine years, WTO members have reached a pact — an agreement on fisheries subsidies.

The four-day talks that began on June 12 ended early Friday. It was in 2013, during the Bali Ministerial Conference of the WTO, that member countries signed the Trade Facilitation Agreement to promote the smooth movement of goods across global borders.

“All agreements have been fully agreed upon and signed unanimously. A decision on the temporary patent waiver (TRIPS) is expected soon. We are just awaiting US approval on this,” the officials said. sources.

An official announcement on all these matters should be announced soon.

One of the sources said that, for the first time, subsidies on overfishing, high seas fishing and illegal, unreported and unregulated (IUU) fishing have been addressed through the proposed pact.

“On the case of India, the sovereign views on EEZs (Exclusive Economic Zones) have been firmly established. It is truly a great achievement,” the source said, adding that key stakeholders who have benefited from these “historic decisions” taken by the 12th Ministerial Conference of the WTO are fishers, farmers, food security, multilateralism, trade and business, in particular the digital economy and MSMEs.

It was also agreed to find a definitive solution to the question of maintaining the moratorium on the imposition of customs duties on the electronic transmission of goods by the next WTO Ministerial Conference or no later than March 2024.

One of the sources called this conference the most successful in the history of the WTO as it revitalized the organization.

“He restored multilateralism. India took a major leadership role and was the voice of the developing world and LDCs (Least Developed Countries). Developing countries were building consensus and bringing solutions to come out of each deadlock from time to time during different sessions and meetings,” they added.

A decision on all issues reflects the camaraderie between developed and developing member countries.

“Great team effort was put into agreeing on the issues. The concerns of the ACP region (African, Caribbean and Pacific countries) were fully taken into account in the decision on fisheries” , the sources said.

They added that the Indian delegation, led by Trade and Industry Minister Piyush Goyal, was continuously receiving advice and guidance from Prime Minister Narendra Modi.

The aim of the Indian team was to protect the interests of fishermen and farmers.

These decisions also send a strong signal that the world can come together in critical areas like food security and humanitarian crises like the pandemic.

“The narrative has clearly turned heads and those who thought India was stonewalling finally awoke to the reality that it was India that helped set the agenda, brought cohesion, covered a great variety of topics and became the solution provider to every critical question,” one of the sources said.

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State of the Nation: A Better Way to Ensure Sufficient and Sustainable Chicken Supply in Malaysia Mon, 13 Jun 2022 07:00:00 +0000

EVEN before Prime Minister Datuk Seri Ismail Sabri Yaakob said on June 1 that the government would no longer subsidize chicken farmers from July 1, but would instead funnel money directly to people in need of help so they could continue to afford to buy chicken, it was already clear that the existing system was far from perfect and needed an overhaul.

“As expected, the grant approach with herders was not working. So they are now diverting subsidies to consumers,” says Julia Goh, senior economist at UOB Malaysia.

Indeed, if nothing else, the fact that calls for a month-long chicken boycott made the front page of a mainstream newspaper shows that supply was clearly not meeting demand at the determined retail price cap. by the government for chicken and eggs. This is despite the overall increase in government subsidy allocation to RM729.43 million from RM528.52 million to help chicken farmers meet the maximum retail price for live and standard chicken of 5 RM.60 per kg and RM8.90 per kg. respectively, between February 5 and June 5. The retail price cap has since been extended until June 30, according to a statement from the Ministry of Domestic Trade and Consumer Affairs dated June 2.

Images of undersized birds appearing on dinner plates – and across social media – also lend credence to reports of chicken being undernourished by farmers struggling with soaring feed prices in corn and soybeans, which account for around 70% of the costs.

Obviously, in addition to a size and supply mismatch, there was also a bottleneck in disbursements, as Ismail Sabri told reporters on June 1 that less than 10% more than RM700 million of subsidies made available to chicken farmers had been claimed as well. far.

“Wouldn’t you ask for subsidies if you are struggling with high costs? laments an industry insider who believes that basic information on claims filed at the district level may have taken some time to reach state offices and Putrajaya.

While awaiting the official announcement of the removal of the chicken price cap on July 1, industry players contacted by The Edge are still waiting impatiently. As they say, “A lot can happen by July 1st.”

Targeting justified

What is certain is that the rise in the cost price of whole chicken in recent months is reflected in government statements.

Domestic Trade and Consumer Affairs Minister Datuk Seri Alexander Nanta Linggi had said in a statement dated February 2 that whole chicken would sell above RM10 per kg without intervention, when the price cap was announced. price cap of RM8.90 per kg which was initially applicable from February 5 to June 5 this year – a third reduction in the price cap of RM9.50 per kg for Deepavali (from November 1 to 7, 2021) as well as 9, RM30 per kg (December 7 to 31, 2021) and RM9.10 per kg (January 1 to February 4, 2022) under the Keluarga Malaysia Maximum Price Scheme (SHMKM).

Just four months later, Ismail Sabri said chicken prices could have reached RM12 per kg without the cap and subsidy, but many, including smallholders and traders, had sold the birds at 8.90 RM per kg despite no subsidies (which were raised from 60 sen per kg for Feb and March to RM 1.40 per kg in April and May) to comply with the retail price cap lest the ministry take action against them.

Even as Russia’s invasion of Ukraine hits the 100-day mark on June 3, it remains unclear when the global supply disruptions will end, heightening awareness of the need to strengthen the food security in the context of growing global food protectionism (see the poultry on the plates say about food security”).

Rising food prices and shrinking supplies in the wake of the Russian-Ukrainian war are expected to “last through 2024 and possibly beyond,” S&P Global Rating analysts wrote in a note dated Monday. June 2, entitled “The global food shock will last for years, not months”.

As there is no way to predict how long the supply chain disruptions will last and the country’s subsidy bill is already expected to reach RM71 billion this year – of which some RM30 billion comes from subsidies alone. to fuels – Socio-Economic Research Center (SERC) executive director Lee Heng Guie says offering consumers who need help targeted subsidies and/or food stamps is “a more viable approach” for most decision makers.

This is given limited fiscal resources and possible trade-offs that need to be considered if a lot of resources are to be spent to keep prices artificially low for everyone instead of just targeted groups, another economist agrees.

In France, for example, where inflation was 4.8% in April, recently re-elected President Emmanuel Macron pledged to increase social protection and issue food stamps to help the country’s poorest households cope with rising prices instead of controlling inflation.

It is also the most vulnerable who are receiving extra help under the £15billion (RM82.7billion) support package announced in May in the UK, where inflation has peaked at 40 years by 9% in April and 10 million Britons are estimated to have reduced their diets amid rising food and energy prices.

Higher prices to come

Similarly, economists say targeting subsidies to help low-income groups in Malaysia maintain a good amount of animal protein as part of their daily nutritional intake, even though chicken and eggs are allowed to be sold at retail at market prices, would also be “good round practice”. for policymakers, given that the removal of general subsidies in favor of targeted subsidies for fiscal sustainability is long overdue.

“Just like with global monetary policy, we can’t have years and years of [price] distortions and assuming that we will always have the money. No matter how noble the goal [for price distortions/subsidies]there are consequences too and at some point we will have to pay,” says Nicholas Khaw, research director of Khazanah Nasional Bhd.

“With items like gasoline, where the distortion is huge [the rich benefits far more than the rest]targeting [subsidies] makes sense even when you factor in the risks of compromise [possible exclusion/inclusion errors].”

Overall, UOB’s Goh believes Malaysia is likely to see “more upside risk to prices until the reopening effect wears off and rising prices weigh on spending and demand. “. There is also a “moderating effect” of higher interest rates, she adds.

Most experts expect a gradual rationalization of subsidies in Malaysia, where food inflation rose slightly to 4.1% in April, although headline inflation remains relatively low at 2.3%, helped by large grants.

“[Subsidy rationalisation] must be done in order. It can’t be a big bang – chicken, cooking oil, fuel, electricity, gas, public transport [and so on] all of a sudden. [A rise in] inflation is inevitable,” says SERC’s Lee, who expects “at least one more” rise in the prices of goods and services. In addition to supply chain disruptions, prices were already slowly rising due to labour-related adjustments, including a higher minimum wage, as well as the normalization of interest rates.

Lee – who, like most economists, supports the introduction of a large-scale consumption tax – believes that the timing of the reintroduction of the goods and services tax (GST) and how policymakers can help the most vulnerable in society and businesses cope with higher prices would be key determinants of the impact of the decision considered by policymakers for fiscal sustainability. While there “will definitely be a one-time impact on inflation” when the GST is reintroduced, some of the extra revenue could be used to expand targeted relief, he says.

Whether there is a gain or spillover from policy changes that affect consumer prices and the cost of doing business will also depend on “execution and the ability of policymakers to manage the impact” , adds Lee.

In addition to targeted cash transfers, effective surveillance against profits is another way for the government to ensure companies don’t pass 100% or more of higher costs onto consumers, he says.

Sustainable development efforts could also be boosted, as consumption patterns could change when people have to pay prices that are real (unsubsidized) or close to market prices, thus helping to balance the dynamics of supply and Requirement.

“At the end of the day, prices will go up even further [with targeted aid]. But it’s a decision to let market forces dictate price and suppliers to adapt. [and reach a new equilibrium]“, said Goh.

Rather than being overly concerned about what the short-term numbers might look like, the country will reap a net benefit from the structural changes needed for sustainable growth if the most vulnerable groups in society, who receive timely and adequate assistance , are also progressing.

See also “The slow disbursement of subsidies harms the cash flow of poultry actors”

WTO negotiators finalize key fisheries texts, Covid jabs Sat, 11 Jun 2022 12:53:27 +0000

Longstanding World Trade Organization (WTO) agreements on fisheries subsidies and a patent waiver for the Covid vaccine moved closer to completion on Saturday after negotiators finalized the texts for ministerial consideration, but significant obstacles remained in reaching a final agreement.

Diplomats held round-the-clock talks to hammer out texts on several thorny issues ahead of the World Trade Organization’s first high-level meeting in five years, where trade ministers and officials from 164 countries have four days from Sunday to try to get the negotiations to the finish line.

It is set against the backdrop of the Ukraine-Russia war and fears of a global food crisis as a result of the conflict.

Read also | US has wasted more than 82 million doses of coronavirus vaccine: report

The world trade body announced in the early hours of Saturday that a draft text on a long-elusive agreement banning subsidies promoting overfishing had been handed to ministers.

They will be tasked with ironing out the final sticking points towards an agreement that has been going on for decades.

The success of the 12th WTO Ministerial Conference will largely depend on its success.

“Not all the issues have been resolved. Indeed, this is a draft agreement and in this draft there are still issues that the members have not yet agreed on,” said acknowledged Colombian Ambassador Santiago Wills, who chairs the WTO negotiations on fisheries subsidies.

But he said months of intense negotiations had presented “a clean solution” to some issues that had long “seemed intractable”.

The WTO takes its decisions by consensus, which makes agreements all the more difficult to reach.

Global fisheries subsidies are estimated at between $14 billion and $54 billion a year, according to the body.

It is widely accepted that action is needed to protect a crucial resource that millions of people depend on for their livelihoods.

WTO members have been discussing for 20 years the need for an agreement to ban subsidies that contribute to illegal and unregulated fishing, as well as overfishing.

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‘Significant progress’

Wills noted “significant progress” on the delicate issue of “territoriality”, with the draft text ensuring that a panel of WTO experts would not be called upon to decide who has jurisdiction over disputed territorial claims or who overlap.

Progress has also been made on the issue of fuel subsidies and the so-called special and differential treatment (SDT) for developing countries, long a major stumbling block, he said, hailing a ” considerable narrowing of differences”.

The special treatment for the poorest countries is widely accepted, but the demands of some self-identified developing countries for exemption from subsidy constraints, including major fishing nations like India, have been hard to swallow for some.

The draft text proposes that the exemptions do not apply to Member States representing a certain share of the world volume of marine capture production, but this percentage has not yet been defined.

Wills stressed the urgency of finally reaching an agreement.

“The longer we wait, the more the fish lose. And the more the fish lose, the more we all lose,” he said.

The WTO also said draft text had been finalized on the thorny issue of a temporary patent waiver for Covid vaccines to provide fair access to shots and better combat the still-raging pandemic.

But the agreement is far from certain.

Read also | WTO lowers forecast for world trade volume growth following Russian-Ukrainian war

The pharmaceutical industry and a number of its host countries have warned of the impact on innovation, while public interest groups warned on Saturday that the new text is so weak it could even further complicate access to vaccine production.

“It has been a very difficult, very difficult process,” acknowledged WTO chief Ngozi Okonjo-Iweala.

“I know for all of you it’s been a tough time, but we’ve done our best for now.”


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Fuel and fertilizer subsidies up 24% Thu, 09 Jun 2022 13:45:03 +0000