Case Analysis : Agriculture Subsidies

Unfortunately, there has been poor progress in reducing agricultural protection in recent years. In fact, if global trade liberalisation was achieved by the WTO 's Doha Round, it could have boosted Australia 's agricultural exports by US$9 billion by 2020; thus displaying how highly protectionist economies and trade blocs adversely affect the Australian economy.

World Trade Organization (WTO) is also one of the potential impacts of the global factor towards Sainsbury’s. The main aim of World Trade Organization is to open trade or free trade for the benefits of all such as dealing with the global rule of trade between nations. For instance, it is to assist organizations like Sainsbury’s of products and services, exporter and importers to have a better protection and management for their businesses. The advantage of World Trade Organization is lower the price of products for consumers by removing tariffs. Customer is able to buy cheaper imports without tariffs. For example, Sainsbury’s is able to purchase imported goods from other countries with a cheaper price so that customer has more choices to choose

WTO is an international agency which is helping the nation members to provide barriers free trade and settle the disputes those are arise between nations while trading. It ensures the smooth and fair business activities between different countries. It was generated from GATT.

Farm subsidies help farmers to keep the prices of their products low and competitive in the international market. This means that national farmers and their products receive sufficient support and revenue to keep them in business. If this were not the case, there is a danger that retailers will begin to find foreign markets from which to important even basic foods such as corn and meat. The danger here is then that many American

WTO: World Trade Organization deals with the global trading rules between international governments. The overall rules must be predictable enough so that everyone involved isn’t dealing with chaotic sudden changes.

"Agriculture is undoubtedly the most important activity for the majority of the world’s poor, and at the same time it is the most protected sector in industrial countries." Agriculture continues to play an important role throughout the world, while in recent years, farmers have been negatively and positively affected by the trade agreements established by both the WTO and Fair Trade system; specifically the banana and coffee farmers. The government's role was to liberalize trade by reducing tariffs and they initiated this by introducing GATT (General Agreement on Trade and Tariffs). This was an agreement between countries that slowly expanded to include countries. Agricultural Trade was left out of the GATT due to the U.S. and European Union "banana war." This is a trade dispute between the US and EU on how the bananas are sourced and imported, even though neither one of these countries are the banana growers. The GATT was later re-established as the WTO (World Trade Organization). As Weis stated, The WTO's Agreement on Agriculture (AoA) came into effect in 1995 and constitutes a major landmark in the development of the global food economy as its set in place, for the first time, multilateral rules restricting the sovereignty of governments to establish their own agricultural policies. Their main focus was to establish a fair and market-oriented agricultural trading system. Their objective is to entrench and extend the rights of transnational capital in trade and

The agriculture industry has been ever changing, due to the population increases. Subsidies keep the small farm going, protecting

For many countries, subsidies and the lobbying power behind them can have great effects on governmental policies and direction. By far, though, the agricultural subsidies advocates in the United States and, to a slightly lesser extent, the European Union have profound sway in government policies. Being dubbed the “breadbasket of the world” gives farmers and their lobbyists in the US immense power to ensure that the government subsidies continue to favor agriculture producers. By and large, this practice has tipped the scales in both the US and the EU when it comes to ensuring that subsidies remain non-distortionary towards world markets. With policies in place that position national farmer interests ahead of global interests, higher production is encouraged, world prices are driven lower, and the incentive for developing countries to invest in agriculture is limited. While the US employs essentially the most distortionary practices, the EU does attempt to limit these distortionary effects. Still, both country’s policies display long-term negative side effects on an international scale.

In 1995, the American government began paying large subsidies to soybean producers, which greatly affected both soybean production in the U.S. and the soybean trade with China. This inspired me to do research about the policy change. I test the impacts of subsidies on soybean producers in the U.S. and the effects on trade. Based on the soybean trade history between the U.S. and China, I research why China imports soybeans from the U.S and whether the subsidy can increase the exports of US soybeans to China.

In 2002, a dispute over agricultural trade liberalization between the United States and Brazil arose. Brazil filed a lawsuit against the United Stated in the World Trade Organization Dispute (WTO) Settlement System arguing that the subsidies the United States provided to US farmers violated WTO trade agreements and gave US farmers unfair advantages (Unit 7, lesson 5). Fortunately for Brazil, the World Trade Organization agreed with their claim and authorized them to take “punitive measures against the United States” (Cengage unit 7, 3).  As a result of that authorization, Brazil decided “to impose tariffs and lift patent protections on US goods” (Cengage unit 7, 3). In order to limit the damage that could have been created by Brazil’s actions, the United States had to make a smart move. As a matter of fact, they decided to provide cottons to Brazilians rather than removing the subsidies. Over 150 Million in subsidies have been provided to the Brazilians, in 2010 so that Brazil do not impose punitive measures (Cengage unit 7, 3). There exists both, pros and cons for subsidizing U.S. farmers. In fact, US farmer strongly support subsidies claiming that it gives the US an important industry and helps the regulations. However, subsidizing US farmers has some consequences. The cons argue that “subsidies provided to US agricultural producers create inefficiency in the global economy” (unit 7). Also, according to economists, subsidizing stands in the way of the economy growth

In light of this, I would like to explore research frontiers in the area of the challenges of managing food and farm businesses in a global setting of the 21st Century. In our society beleaguered by agricultural problems that ranges from economic to environmental problems such as weather and global warming, issues concerning trade and management of agricultural enterprises has been the topic of debate for the past decade. Many developing/poor countries who earn their living from agriculture continuously suffer from poverty and hunger as a result of the increasing pressures on the world's resource base. Policymakers are gripped with finding solutions to problems such as structural and technological constraints, inappropriate domestic policies and an unfavourable external economic environment. As a result, the growth of these economies has been slow, undernourishment has been increasing and the marginalization of these countries in the global economy has continued. This trend has created problems for developing countries over the past decade. Economic and financial

One of the biggest firms associated with globalization is the World Trade Organization. The World Trade Organization is the only international body that deals with the rules of trading between nations. It has evolved over the past half century into an entity that contract with the trade of services, intellectual property as well as its original intent of the trade of goods. The WTO controls most trade in the world today through over 100 countries, and even more on the way. The World Trade Organization is beneficial economically and we should support its principles.

The World Trade Organization (WTO) is a global organization that helps countries and producers of goods deal fairly and smoothly with conducting their business across international borders. It mainly does this through WTO agreements, which are negotiated and signed by a large majority of the trading nations in the world. The purpose of the WTO is to ensure that global trade commences freely, smoothly and predictably while also aiming to create economic peace and stability in the world through a multilateral system. This is based and applied to member states, currently 162 countries, that have consented and ratified the rules of the WTO in their individual countries. Simply put, these documents act as contracts that provide the legal framework for conducting business among nations, integrating into a country 's domestic legal system, therefore, applying to local companies and nationals in the conduct of business internationally. For instance, if a company were to open an office or business in a foreign country, the rules of the WTO dictates how that can be done.1

"Agriculture is undoubtedly the most important activity for the majority of the world’s poor, and at the same time it is the most protected sector in industrial countries" (Mlachila, 2010). Agriculture continues to play an important role throughout the world, while in recent years, farmers have been negatively and positively affected by the trade agreements established by both the WTO and Fair Trade system; specifically the banana and coffee farmers. The government's role was to liberalize trade by reducing tariffs and they initiated this by introducing GATT (General Agreement on Trade and Tariffs). This was an agreement between countries that slowly expanded to include countries. Agricultural Trade was left out of the GATT due to the

     The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. The goal is to help producers of goods and services, exporters, and importers conduct their business. The World Trade Organization came into being in 1995. One of the youngest of the international organizations, the WTO is the successor to the General Agreement on Tariffs and Trade (GATT) established in the wake of the Second World War. The World Trade Organization exists to ensure that trade between nations flows as smoothly, predictably and freely as possible. It provides and regulates the legal issues which governs world trade now .