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Agriculture and Food in International Trade - Coursework Example

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The author of the paper gives a detailed information about trade liberalization, poverty alleviation, and food security, value chain considerations, supermarkets in developing countries and private and public standards in food and agriculture trade…
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Agriculture and Food in International Trade
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Download file to see previous pages These delays are known to cost a great deal as for highly perishable produce there is the need to have special facilities for their transportation. This increases the handling cost leading to high prices of operation upstream. Other factors are the cost of freight particularly air freight, availability of freight service infrastructure ie ports, ships and container loading, the availability of a cold chain facilities to keep product frozen or refrigerated then the time it make take to get the product to export market, getting the product on time to the customer because of poor freight schedules can be difficult Things like insurance costs (shipping credit insurance etc, and securing how you are going to get paid are also issues. Another factor is the existence of extensive bureaucracy in the documentation at these points making the process of crossing borders and the clearance of stock a long and time-consuming process. Many countries with the aim to protect local industry economically, have instituted import quotas, phytosanitary documentation, certification, duty classification and payment all of which are also big factors. The export process requires certain skills, knowledge and international business experience and producers rarely have these skills.
As earlier highlighted, these practices increase costs to the producer as for them to make a profit they need to factor such costs of the time wasted in terms of opportunity cost. Corruption at the borders is another factor that affects the degree of price transmission. In many countries, official import restrictions have led to the development of grey channel practices i.e. export to Hong Kong is a great way to get restricted goods into mainland China. According to Koning and Pinstrup (2007), corruption causes some producers to have preferential treatment while others wait for them to be cleared. The bribery expense is transferred as well as that of delays.  ...Download file to see next pages Read More
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