Contact Us
Sign In / Sign Up for FREE
Go to advanced search...

Potential grows for food crisis as prices surge - Essay Example

Comments (0) Cite this document
Question # 1: The price of the agricultural goods tends to rise at an inflated rate than the other goods such as manufacturing due to inelastic nature of its supply. This inelastic nature is due to production process of agricultural goods that require certain conditions as well as time period to produce…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER97.5% of users find it useful
Potential grows for food crisis as prices surge
Read Text Preview

Extract of sample "Potential grows for food crisis as prices surge"

Download file to see previous pages Point where this demand and supply meets determines the equilibrium price level at given point in time (Leamer, 2009). (Arnold, 2008) Agricultural goods demand and supply and its respective equilibrium price are largely intervened by government due to many factors such as maintaining farmers’ income stream etc. It is done by restricting supply by restricting the overall production per acreage, restricting export to certain countries, increasing tariffs, restricting price over and above equilibrium( floor price) etc. Figure below explains demand supply scenario that increases price due to supplier responding to international demand. Initially with given demand D and supply S in a country, the price is determined at equilibrium P. In case of issues in other countries such as drought etc and the country in discussion starts exporting agricultural goods to them, the supply curve shifts in the local market from S to S’. At the current point where local demand in the country is D and the supply squeezes from S to S’, the price in the local market increases from P to P1. Demand from other countries increases and the curve shifts from D to D’ towards right. The supply curve also sifting from S to S’ with supply distributed between local and international market, the new price determined will be P2. This new price is high above then price determined based on local market demand. The supplier to get benefit of this increased demand responds to the international demand, hence neglecting local demand (Mankiw, 2009). To mention as evident from the above figure, it is visible that demand curve had a greater shift towards right as it is incorporating the increased demand from the other countries in trouble, hence causing greater shift in price. The supply curve on the other hand had smaller shift due to inelastic in nature causing comparatively less shift in price (O'Sullivan and Sheffrin, 2003). The scenario can also be reverse as in case the surplus supplies overall worlds is enough to meet the demand. These cause huge variations in the income of farmers, increased supplies causes decline in prices that negatively affects farmers’ situation whereas shortage cause inflated prices and disadvantage to buyer. To control this variation in pricing, government of different countries intervenes in the market and control the supply with restrictions exports and increased tariffs on exports or even bans that maintain the price level in local market (Brickley and Zimmerman, 2009). Whereas to control the declining prices of the agricultural products government fixes floor prices (that is over and above equilibrium prices) and buys from farmer surplus products (Wessels, 2000). When excess is bought by government the level of supply available for customer is less and hence the floor price is adjusted as equilibrium price. (Rittenberg and Tregarthen) The surplus bought from farmer is then used for other purposes. For instance, US government uses this surplus for sending in aid programs. Also to maintain this excess supply, government pays farmer certain amount to reduce the per acreage production. These measures to maintain price from access price are however, harmful as they appear not aimed to maintain the income level of farmer but to maintain the international price level. As evident from the history, the supply has never in excess as compare to increase in demand of entire world keeping in consideration the factor of rising population level around the ...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
(“Potential grows for food crisis as prices surge Essay”, n.d.)
Potential grows for food crisis as prices surge Essay. Retrieved from
(Potential Grows for Food Crisis As Prices Surge Essay)
Potential Grows for Food Crisis As Prices Surge Essay.
“Potential Grows for Food Crisis As Prices Surge Essay”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Potential grows for food crisis as prices surge

Different Factors That Cause Food Spoilage

The mechanism of action of these microbes is quite interesting. For example, some microbes release enzymes into the liquid surrounding them and absorb nutrition from the fluid digested externally. On top of that, this process of digestion leaves behind a residue of toxic waste, which is poisonous. That is why food items (both natural and processed) with high fluid content tend to be more susceptible to spoilage. So this is one internal or intrinsic condition for food spoilage.
Also, the vulnerability of a food item for a microbe attack is largely determined by its classification. Food such as carbohydrates, fats, and proteins are made up of organic compounds, whose nutrition attracts microbes. On the other hand vitamins and m...
6 Pages (1500 words) Assignment

The Significance of Fast-Food to Young Persons and Possible Health Consequences

The previous chapter identified the objectives of this research project, including the creation of understanding behind the motivations for fast food consumption and the influences that drive this behavior in the UK. In addition, it is important to identify the various dietary implications of fast food consumption from both a professional and clinical perspective and empirical evidence. At the same time, it becomes crucial to highlight whether the fast food industry is responding to social demand for better and healthier food products in order to fully understand the potential outcomes for fast food companies.

The fast-food consumer is characterized by a wide variety of market demographics from the working-class cons...

12 Pages (3000 words) Literature review

Canadas Potential Shift to Privatization a Reality

In order to better regard this topic, a brief history of the implementation of the current Canadian health care system must be discussed. Further, appropriate financial matters should be considered. For the purposes of this essay, laws, and policies applicable to Canadian health care will not be evaluated in detail. However, the Chaouilli case in Quebec will be acknowledged, so as to direct the focus of the essay toward to possibility of the developmental path for a privatized health care system in Canada. Issues concerning the waiting line which may have been expressed on other occasions will be considered as well. Their role in the advancement of the privatization of health care in Canada will be further evaluated.
The Cana...
12 Pages (3000 words) Assignment

Why Firms Outsource HR Activities and What Are the Potential Problems and Benefits of Outsourcing HR Activities

With minor changes here and there, these companies have taken giant strides in their respective human resources fields and thus made a mark for their own selves. It is a common phenomenon that a business can move away from a stand of firmness and consistency to one of a comprehensive weak one as the same is willing to grab hold of the varied means present within the market as well as the driving factors.

The United Kingdom has witnessed a lot of change within the economical shifts of late. What this echoes is the fact that people and more so the companies have started to move out of the UK in the wake of achieving different goals for their own selves and in a quest to achieve what they have not been able to, in the yes...
6 Pages (1500 words) Term Paper

The Act of Storing Food and Making Food

When corn was first discovered, people fell in love with how available it was, and how simple it was to just pick, husk, and eat. They were also pleased that they could store it and use it as needed when they needed to. It was a perfect grain for traveling pilgrims during those times. Without humans, corn could not survive, as it needed to be husked to drop its seeds.
In chapter two, it is learned how important the workings of a farm are to food production. Everything from the soil that plants and grains are grown in, to the machines used to produce items for cooking play huge roles in the larger scheme of things. Even the grain that is fed to the animals has to be the best kind, to produce the best meat for sale. Everything...
14 Pages (3500 words) Literature review

Global Warming and Food Production

The carbon fertilization effect of increased carbon dioxide concentration in the atmosphere has an impact on plant growth, which benefits plant growth by facilitating photosynthesis, cannot balance the complex impact of increased temperatures around the world. Thus, although some regions will benefit from global warming, a total reduction in global agricultural production will result. This essay presents a discussion about the impact of global warming on agriculture and food production around the world.
Although the history of the planet earth suggests that for the last million years ice ages have been interspersed with warmer periods, evidence suggests that the average rate of global warming within the recent past has accele...
14 Pages (3500 words) Assignment

The World Food Program

However, like many organizations, the World Food Program has its own crises that have apparently affected its programs and projects in all parts of the world. These problems, which will be discussed later, limit WFPs' capacity to distribute its resources and services to distressed countries like Ethiopia. It must be noted that in recent years, food rationing was cut by one third (WFP, 2008). In September 2008, WFP published its Media Backgrounder on Ethiopia which reported that the organization targets to support 9.6 million Ethiopians as well as its funding shortage of US$ 465 million. It also recorder 567,000 metric tons shortage of food which will last until March 2009 (WFP, 2008).
Ethiopia has been among the poorest and l...
9 Pages (2250 words) Assignment

Oil Prices by OPEC and Market Fundamentals

Market failure is defined as the inefficient allocation of resources by the market, the free market is considered to optimally prices and resources in the production of goods and services, and this is because the price and quantity produced are determined by market forces which include the demand and the supply. The control of prices by a firm or an organization in the market results in market failure, therefore OPEC leads to market failure due to its nature in the market.

OPEC was formed in 1960 by 5 oil-producing countries which include Venezuela, Saudi Arabia, Kuwait, Iran and Iraq, The aim of this organization was to unify petroleum-producing countries in order to realize fair and stable prices of oil .other oil-pro...
6 Pages (1500 words) Report

Potential Benefits of International Trade

Conditions set for international trade have also changed in various nations. Today, interdependent is evident due to various global distributions. Examples are; transportation systems, the internet as well as satellite communication systems.
The establishment of WTO (World Trade Organisation) promoting equity in nations’ status, the international monetary Fund (IMF) besides the World Bank, has made stronger the anchorage of international trade. These organisations aid in reducing the trade barriers across boundaries. Nelson (2000). This is a study set out to make a comprehensive and vivid answer to the question, “Which are the benefits of international trade and why are trade restrictions imposed by countries?&rdq...
6 Pages (1500 words) Coursework

The Effects of Financial Crisis on Supplier Selection Criteria of the Oil and Gas Industry Equipment Market

It is a difficult task to find those vendors who not only have the adequate quality and quantity of the needed raw materials but who also have an attitude of efficiency and display commitment to customer service (Sonmat, 2006). Further, organizations also strive to locate and select vendors who can be depended upon for long term relationship.

The number of factors or attributes desired from the vendor is vast, and different organizations and different industries place different importance on the attributes (Sonmat, 2006). Some of the vendor attributes may gain importance owing to the nature of the industry, for example, in the case of consumer perishables suppliers, like fresh vegetables or fruits, the buying firm would...
20 Pages (5000 words) Literature review
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Potential grows for food crisis as prices surge for FREE!

Contact Us