Agriculture and Globalization - Essay Example

Agriculture and Globalization Introduction Agriculture is facing dramatic changes. Man and Agriculture have had close relationships since time immemorial. However, globalization threatens to come in between them. Globalization is a free movement of goods, services, investments, capital goods, technology, knowledge and skills across countries. According to Halberg and Forskningscenter (2006), globalization cause technological, institutional and socio-political changes across regions and countries and comes with economic and socio-political reforms. The reforms are aimed at improving transparency and functioning of the institutions across countries. Good governance is important for successful trade liberalization especially in the agricultural sector. Best agricultural policies cannot function adequately without stable macroeconomic environment and respect of the rule of law (OECD, 1999). Globalization has reduced monopolistic tendencies within and outside countries because it promotes competitions across sectors and countries. Some countries lacked technical and business management skills in their agricultural sector. There were inadequate market linkages between farmers and industries. Furthermore, agricultural sector experienced inadequate financing and investments before trade liberalization. Fortunately, globalization breached the gap. Globalization brought fierce competition among the industries across countries. On the other hand, it expanded industrialized agriculture, promoted diverse agricultural methods, enhanced foreign direct investment in agricultural sector and opened up export markets for most farmers in developing countries. In addition, it has improved standard of living by lowering cost of production and improving the quality of goods and services produced (Dator et al 2006). Globalization also protects the citizens of various countries because democracy is enhanced. Globalization makes it difficult for countries to abuse the freedom and properties of its citizens. It is difficult to resist globalization and change at the present century. Most communist and socialist countries have embraced some degree of capitalism. This is because they needed to have access to more markets and skills to do specialized jobs. Globalization will increase in future because the world is connected via internet (Lamb et al 2008). The benefits of globalization to the agricultural sector Globalization is the free movement of agricultural products and agricultural inputs across countries. Agricultural sector has gained tremendously since the emergence of globalization. The benefits of globalization include liberalization and expansion of the agricultural commodity market, inflow of agricultural inputs, improved production methods, access to skills and agricultural knowledge, improved utilization of the agricultural land, improved standards of living, improved contribution of agriculture to the gross domestic product, improved management of natural resources, access to high agricultural technology and improved cooperation among countries The first benefit of globalization is economic liberalization. Capitalism gained ground as land property rights were recognized and clarified in early 1990s in most communist countries. Land ownership rights and privatization led to increased livestock yield in 1995 and other agricultural output grew for the first time. Economic liberalization involves relaxing countries economic rules on import and export of goods and services. Globalization led to development of export markets. New international markets led to substantial increase in agricultural production especially in the European Union. Agricultural inputs were upgraded and agricultural output became diverse. Economic liberalization has enabled agricultural inputs and products to move across countries. For example, India opened its markets to the world in early 1990s. As a result, entrepreneurial skills of its citizens were enhanced and the cost India’s domestic industrial and agricultural structure was drastically reduced. This led to production of agricultural products at lower cost and the standard of living of India’s population improved UN (2003). The second benefit of globalization increased market for the agricultural products. There was rapid increase in the market for labour intensive agricultural products from less developed countries. According to Bucknall and World Bank (2007), globalization has opened up new international markets benefitting both small and large-scale farmers in the developing countries. Farmers whose products meet the international standards are able to supply their agricultural produce to the large international markets. This is even possible where the marketing systems are transparent and inclusive at all levels. Transparency and accountability in the international agricultural commodity markets allows best farmers to sell their best products without discrimination. As a result, farmers are encouraged to produce more generalized and specialized agricultural products and sell them at better prices. The third benefit of globalization is enhanced flow of agricultural inputs. Globalization has increased direct foreign investments to areas of high potential agriculture. In addition, globalization has increased and stabilized the flow of farm inputs such as fertilizers, pesticides and agricultural aid flows into high potential agricultural areas especially in developing countries. Agricultural inputs and financial supports have become regular, better coordinated and harmonized due to globalization. Some countries have been awarded debt reliefs and agricultural grants to improve and sustain production of high quality agricultural products. Most countries supporting globalization have eliminated or minimized barriers of entry and exit on agricultural inputs. As a result, agricultural inputs arrive or leave their countries on time to the benefit of farmers (Goldin et al, 2007). The fourth benefit of globalization is increased agricultural production. Globalization comes with enhanced means of production. Countries that have better methods of agricultural production have been able to transfer their technology to less developed countries. Consequently, the less developed countries that embrace the improved technology are able to increase their agricultural produce. Farmers are able to produce agricultural products using less farm inputs and smaller land mass. The products produced are of higher quality as compared to products produced using the traditional agricultural methods. The fifth advantage of globalization is improved agricultural skills and knowledge. The globalization has made it easier for countries to share agricultural knowledge, skills and ideas. Therefore, uninhibited exchange of information has enabled countries to learn from each other. Less developed countries are able to access information and utilized it for their advantaged. Countries that struggled with lack of adequate skilled work force in the agricultural sector were assisted by immigration of skilled labour from developed nations. Therefore, countries were able to learn from each other and developed pools of both technical and managerial personnel in their agricultural sector. The sixth advantage of globalization is access to high agricultural technology. There are highly specialized agricultural machines and inputs in the current world. Developed countries have developed plants and livestock that produce high yields as compared to the traditional ones. Furthermore, tractors have replaced oxen and machines have replaced labour. Mechanization have increased and standardized farm products. Improved technology in the agricultural sector have led to significant reduction in cost of production and improved the quality of output in the agricultural sector. Some agricultural products such as mushroom can be produced in areas that were not possible due to advancement in technology. Advanced agricultural technology has also enabled farmers to manage their resources better. The seventh advantage of globalization is improved contribution to GDP. The contribution of agriculture to the Gross Domestic Product has increased considerably. This is because countries that have embraced new agricultural technologies advanced to them by well-developed countries have managed to improve their agricultural production. Both small and large-scale farmers have produced diverse agricultural products with higher value. Better markets for agricultural products have increased income to the farmers and the country at large inform of foreign exchange earnings. The agricultural sector grew and developed because of globalization and employ large of rural communities especially in less developed countries. The eighth benefit of globalization is improved standards of living of agricultural producers. Farmers who meet the international standards are able to access better global markets that offer better prices. This has enabled them to increase their income significantly. Globalization has led to development of norms and standards that promote best practice in the agricultural sector. The guidelines provide directions on the amount of chemicals used in the production of agricultural products. The ninth advantage of globalization is improved management of natural resources. The sustainability of agro-diversity is under consideration. Biodiversity is under treat because of poor governance in the management of natural resources in several countries. There are global guidelines that direct use of natural resources especially water. Farmers are well advised on how to manage their natural resources. Most farmers in less developed countries have been burning agricultural byproducts such as maize and wheat stalks. Standards have emerged world wide aimed at helping the farmers manage their resources better. According to Voss et al (2006), Convention of Biological Diversity has established guidelines to help farmers and other natural resource users to sustain agro biodiversity as they pursue their interests. It allows farmers to participate in the formulation of the National Policies touching the agricultural sector. Tenth benefit of globalization is improved cooperation among countries. Countries that trade with each other must maintain cordial relationships at all times and assist each other. Countries trading with each other have developed rules governing the arms trade. Most less developed countries that have high potential for agriculture are trapped in conflicts. Globalization prevents supply of arms to such countries through the adoption of multilateral agreement on arms trade. Multilateral agreements create legally binding agreements that are of international standards. The conflict in the potential agricultural countries and regions will cease if the agreements are respected. As a result, countries in conflict will be able to engage in productive agricultural activities. Disadvantages of Globalization There are some disadvantages associated with globalization especially in the agricultural sector. They include abolishment of agricultural subsidies in most countries, brain drain in developing countries, worsening working conditions, increasing environmental degradation, lack of country’s independency and dumping. The first disadvantage that globalization has brought is abolishment of agricultural subsidies. Most farmers, especially in developing countries face high cost of agricultural production. However, globalization has led to abolishment of agricultural subsidies across nations. Liberalization rules require countries to cease from subsidizing their farmers. Liberalization fundamentals argue that subsidies interfere with the market function of allocating prices to agricultural produce. Asian and Russian countries reduced their subsidies to farmers in early 1990s to access the global market for their agricultural products following the breakdown of CME trade. As a result, domestic consumption in both countries was brought down and food prices increased considerably. Economic restructuring brought untold challenges and uncertainties to farmers (OECD, 1999). The second disadvantage of globalization is brain drain. According to Goldin et al (2007), Africa has suffered massive brain drain especially in agricultural sectors due to globalization. Migration has been rampant because foreign countries recruit highly skilled personnel of the agricultural sector from less developed countries to help them improve own food security. As a result, less developed countries are left with no capacity to improve their agricultural sector. The third disadvantage of globalization is worsening human rights. Socialists’ countries had complex systems for protecting their citizen against exploitation. Globalization is biased towards capitalism. Capitalism is characterized with worsening employee and human rights in the work place. In recent times, there have been bitter disputes among proponents of trade liberalization and non-governmental organizations The non-governmental organizations and human rights activists believe that trade liberalization and uncontrollable direct foreign investment causes low wages and promotes poor working conditions in less developed countries. This is because it aims at abolishing regulations that protect employees. The non-governmental organizations do not believe that globalization reduce poverty levels and create income equality across countries. Instead, they perceive that trade liberalization proponents are after short-term profits (Buksiński and Dobrzański 2005). This is because they felt that less developed countries’ issues were not addressed adequately. According to Baldwin and Winters (2007), non-governmental organizations have organized wide spread street protests against meeting organized and held by World Trade Organizations, International Monetary Fund, World Bank, Group of Eight (G8) and World Economic Forum. Furthermore, less developed countries have staged spirited fights against the establishment of new World Trade Organization rules and guidelines because they feel that there issues have not been represented well. They feel guidelines especially on competition, environmental standards and labour rights favours the developed countries. They also feel government procurement policies and direct foreign investment does not support their ideals. Less developed countries felt World Trade Organization internal processes isolated and marginalized them. The fourth disadvantage of globalization is that there is increasing environment degradation. Globalization favours the use of tractors and other heavy agricultural machinery. The heavy agricultural machines consume fuel for energy. As a result, they emit pollutants to the environment. In addition, they produce lots of noise during their operations. Environment pollution reduces the quality of the environment. Large tracts of Land especially in developing nations have been cleared to pave way for agriculture. As a result, water towers and biodiversity have been destroyed. The fifth disadvantage of globalization is that it undermines the independence of individual countries. Globalization is the free flow of goods, services and other resources across countries. With globalization, no country is self-reliant. Countries must come together and develop rules and norms that guide them in their interaction. Secrets of countries leak when there is free flow of information either voluntary or involuntary. With globalization, issues that affect one country also affect other countries as well. Economics downswings of larger countries may become a global problem just like the case of the credit crunch in the US that spread into many countries. The sixth problem with globalization is dumping of agricultural products to the less developed countries. Developed countries have perceived less developed countries as places for dumping excess agricultural produce. As a result, most developing countries have refused to cooperate with the developed nations. Developed countries have also used the concept of liberalized markets to chock the developing industries of the less developed nations. They do it by reducing the prices of their products in the exports markets. The developing countries should try hard to protect their infant industries or invest in technology that that places their countries at par with the developed nations of the world. Conclusion Globalization in the agricultural sector has been dramatic and large. The cost of production in the agricultural sector has been reduced drastically and agricultural commodities have fetched better prices in the global market. Increased competition brought about by globalization have led to production of better quality agricultural products using better production methods especially as in the case of developing countries. The benefits of globalization are numerous. However, they can be summarized into two broad categories. Economic liberalization and flow of resources across countries are important for the success of the globalization. There are also disadvantages of globalization in the agricultural sector. Among them are abolishments of agricultural subsidies in most countries, brain drain in developing countries, worsening working conditions, increasing environmental degradation, lack of country’s independency and dumping. Finally, the power of globalization cannot be underestimated. The success of any country depends of how the country manages globalization. It is advisable for countries to assist their citizens to cope up with change. Stronger and more advanced countries should restrain themselves from taking advantage of less developed nations. Liberalization policies need to be fair to all countries for mutual relationships. References Baldwin, R. and Winters, A. (2007) Challenges to Globalization: Analyzing the Economics. Chicago. University of Chicago Press. Bucknall, J. and World Bank (2007)Making the most of scarcity: accountability for better water management results in the Middle East and North Africa. Washington: World Bank Publications Buksiński, T. and Dobrzański, D. (2005) Eastern Europe and the challenges of globalization Washington: CRVP, 2005 Columbus, F. and Wusu, O. (2006) Politics and economics of Africa, Volume 6. New York: Nova Publishers Dator, J., Pratt, R. and Seo, Y. (2006) Fairness, globalization, and public institutions: East Asia and beyond. USA: University of Hawaii Press Epp, R. and Whitson,D. (2001) Writing off the rural West: globalization, governments and the transformation of rural communities. Alberta: University of Alberta Goldin, I., Reinert, K. and World Bank (2007) Globalization for development: trade, finance, aid, migration, and policy. 2nd Edition. Washington: World Bank Publications Halberg, N. and Forskningscenter (2006) Global development of organic agriculture: challenges and prospects. Oxfordshire: CABI. Kimbrell, A. (2002)The fatal harvest reader: the tragedy of industrial agriculture. USA: PublisherIsland Press Kornblum,W. (2007)Sociology in a Changing World. 8th Edition. USA: Cengage Learning Lamb, C., Hair, J. and McDaniel, C. (2008) Essentials of Marketing 6thEdition. USA: Cengage Learning. OECD (1999)Agricultural policies in emerging and transition economies, Volume 1. OECD Publishing. Themistoklis K. Giannakopoulos, T. (2004) Safeguarding companies' rights in competition and anti-dumping/anti-subsidies proceedings. London: Kluwer Law International UN (2003) Asia-Pacific development journal, Volume 10, Issue 2. Geneva: United Nations Publications Voss, J., Bauknecht, D. and Kemp, R. (2006) Reflexive governance for sustainable development. London. Edward Elgar Publishing Read More