Over the odds? That will do nicely

Article Abstract:

Oil consumers have been overpaying for the world's most important raw material in recent years. Oil prices averaged $16 a barrel in 1994 and $17 in 1995, and are expected to rise to $20 in 1996. One oil and gas analyst contends that average prices should only be around $15 a barrel, which would already give oil producers a decent 7% return on capital investment. This means that countries all over the world have been paying 50% over the odds for the product. The high prices are unjustifiable since there is no shortage in supply. In fact, there are an estimated trillion proven barrels of oil all over the world. Bloated prices, instead, can be attributed to instability in Middle East where 60% of proven oil reserves can be found. Western governments, particularly the US, are willing to pay the high prices so as to prevent social and political unrest in Middle Eastern countries that use oil revenues to subsidize the living standards of their people.

PETROLEUM AND COAL PRODUCTS, Petroleum, Petroleum and Coal Products Manufacturing, Prices and rates, Petroleum industry, Political aspects, Pricing

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Fallow times

Article Abstract:

The UK agriculture industry is facing an economic crisis. However, both the government and the public have heard similar complaints from farmers before and are not taking the current tales of economic woe very seriously. Many people believe that the latest reported farming crisis is simply another tactic to neutralize the negative publicity that the industry has been getting for the environmental problems it has created and to draw attention away from the enormous subsidies it continues to receive from the European Union. The government also is not overly sympathetic, contending that the 120 pounds sterling farm package given in 1998 will grow smaller in the coming years. Yet, the farmers seem to have a legitimate cause to complain this time around. Net farm incomes in 1999 are expected to drop below one billion pounds and may even plunge to $600 million pounds, down by at least 80% from 1996.

Agriculture, Crop Production, United Kingdom, Industry Overview, Agricultural industry, Economic aspects

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