6.3.4 Agriculture

How does globalization affect the environment?



Did you know that people in the developed world spend less on food, as a percentage of their income, than at any other time in history? Although Earth has more people than ever, and less farmland, and although we hear of starvation, famines, and droughts around the world, more than enough food is produced on the planet to feed all the people. Why?

Technology has improved food production.

  • Nations are becoming more specialized in the production of food.

  • Transportation technology and refrigeration are better, meaning that food can be transported further.

  • Improved seeds, more efficient farm machines, better fertilizers, and better pesticides and herbicides help the land produce more grains and vegetables.

  • For livestock, better feeding, selective breeding, and the use of growth hormones and antibiotics means there is more meat and dairy produced.

  • Factory farms use mass production techniques.

Farm, Barrhead
Courtesy of J. Warkentin

Golden Rice
© Thinkstock
 
  • Genetically Modified Foods are stronger, have higher yields, or may be resistant to pesticides. Some are more nutritious or healthier. For instance, transgenic rice can improve oral rehydration to counter the effects of diarrhea, which is the second largest infectious killer of children under the age of five in the developing world. Golden rice has had two genes inserted into its genome, providing additional amounts of vitamin A. Vitamin A deficiency is a leading cause of blindness in up to half a million children a year.

Those in favour of genetic engineering believe that it makes food more nutritious and can make certain crops easier to grow in some difficult areas, leading to better nutrition and health, especially for people in the developing world. They point out that genetically modified foods are safe and are really no different than crops grown naturally.


Feedlot
© Thinkstock


Digging Deeper


You might be interested to read the perspective of Canadian farmer Percy Schmeiser in his battle with the agricultural biotechnology firm Monsanto.

Watch the trailer for the film of his struggle.



Reflect


If there is so much food available, why do so many people starve? Technology is not available to all nations equally. Some countries can make better use of technology, and the gap between rich and poor nations widens. Food, like money, is not equally distributed around the world. Although most people in the industrialized world have more than enough food, those in the world's poorest nations still go hungry.

Trade subsidies favour the developed world. No industry is more highly
subsidy
money paid by a national government to keep prices lower than what they would be in a free market or to keep alive businesses that would otherwise be unsuccessful or to generate activities  that otherwise would not occur

Subsidies can be a form of protectionism because they keep the prices of domestic goods artificially low compared to the real cost in a free market.
subsidized by national governments than agriculture. Food is vital for human life, and all people depend on food to live. Farmers and governments want to be sure that their people will always have enough to eat without relying on other nations. Agricultural subsidies create problems around the world. Rich countries can afford to subsidize farming. Poor ones cannot. Agriculture is one of the few areas of production in which the developing world has a
comparative advantage
the ability to produce a particular product at lower cost than another business or country

Comparative advantage means that no matter how good (or bad) the individual is at producing goods, he or she is always better at something than someone else is. Because the person can produce this one thing by giving up less than others give up, he or she can sell it or trade it to others. The idea of comparative advantage is that people and nations can benefit from specialization and exchange.
comparative advantage. Agricultural subsidies are essential to the way agriculture operates in places such as Europe and the United States; they are a form of
protectionism
the economic policy of limiting trade by means of tariffs on imported goods, quotas, and anti-dumping laws to protect the industries of a nation; opposite to free trade
protectionism.

Consolidation of small farms: A hundred years ago, the majority of Canadians lived on farms but now over 80% of Canadians live in cities. Many farms are extremely large and are owned by large corporations that can make large profits because of
economy of scale
in industrial production, the idea that bigger is better

In many industries, as output increases, the average cost of each unit produced becomes lower. Fixed costs can be spread over more units. However, increasing industrial size can increase average costs (diseconomies of scale) because managing large operations is more difficult and more expensive.
economies of scale.

European agricultural programs: The European Union established a common market for agricultural products, which includes a set price for farm products. This means farmers in some countries are heavily subsidized so they can sell their products at the same price as other European farmers. European countries also place
tariff
a tax on goods that are produced outside the country imposed by the government of the country to which they are exported

Many countries have reduced tariffs as world trade becomes more free.
tariffs on imported food, making the price of food higher than it would be if imports were allowed.

Watch


Watch the eight-minute video about agricultural subsidies in the United States.