The period of the last fifty years has been characterized by the continuing globalization of economic life. We want to find out what globalization means for individual farmers and its impact on agriculture as a whole. In the following, globalization is first briefly discussed as a general phenomenon. The situation in the Netherlands cannot be viewed in isolation from that of the EU, which is why the EU’s common agricultural policy and the changes therein are subsequently examined.
Farmers With A Future – Globalization Impact On Farmers of Netherlands
It is argued that this includes both resistance to unregulated globalization and surrender to the globalization process. The question is answered as to what the most important consequences of this globalization process are for Dutch farmers.
Globalization is not a downpour
If rules are made in the context of the World Trade Organization to liberalize trade between countries or around intellectual property rights, this is part of the globalization process. Globalization as a project is about the neo-liberal idea that having a large world market, with minimal government regulation, creates an ideal world order with the best opportunities for prosperity growth. From the neoliberal point of view and the idea of globalization as a project, people agree with this by stating that the only option is to go along and adjust as well as possible. The idea that countries also have their own policy space and can make choices is dismissed as wishful thinking .
The American economist and Nobel Prize winner Joseph Stiglitz rightly states that better rules are needed to guarantee fair globalization.
Globalization and agriculture: markets and food chains
With most agricultural products you see traditionally that what is produced locally or regionally is also consumed to a significant extent in the same location or region. That has recently changed. Since 2000, world trade in food has more than tripled. Some regions are increasingly dependent on food imports and this trend is also expected to continue in the future.
The countries in the Middle East that are members of the Gulf Cooperation Council even have eighty to ninety percent of their food requirements dependent on imports, of which a significant part must come from the Black Sea area with are vulnerable supply lines. Other regions the US, Latin America, One of the main driving forces behind this development is the development of demand and consumption patterns, for example as a result of increasing incomes, population growth, and urbanization.
The EU agricultural policy: from protection to market orientation
With the establishment of the European Union, there is a situation in agriculture that I would like to call one of balanced internationalization. The EU agricultural policy was very much in line with the agricultural policy that the member states already had before. Afterwards, Since the great agricultural crisis of 1880 , the protection of agriculture in many countries has not disappeared from political reality. In exceptional cases, a few countries continued until 1930 to strive for a completely free agricultural market.
Later, during the Great Depression of the 1930s, great poverty and misery forced each country to make far-reaching changes in agriculture and agricultural markets. An important motive for the protective agricultural policy was that agricultural markets are unstable and world markets disturbed and that there is a permanent risk of overproduction, structurally falling real prices and low agricultural incomes. A common market was formed with the creation of the European Union. Trade in the EU, including agricultural products, should be able to take place freely.
- First of all, it was about internationalization within a limited space, namely that of the six member states, with which the EU project started.
- Secondly, it was important that the prices that countries settled against each other were not the often low world market prices, but the higher EU prices.
- Those prices were higher because the EU pursued a price support policy and price stabilization policy at the same time.
The implication was that there were trade defense measures at the EU’s common external border.
This change of course has since led to the abolition of price support policy for almost all products. EU exports have indeed grown substantially. The result is that the prices that farmers receive are now largely determined by developments as they occur on the world market. In practice, this means that Dutch agricultural prices partly depend on what is happening in Asia, with China in particular being a very important country.
With the present global economic condition, there is a huge chance that farmers are going to suffer its effects. For some farmers, meeting the demands of the market becomes a challenge that they result to taking out small loans from agencies. While this move is not the wisest, it is the quickest to keep farming operations going.