This thesis focuses on protectionism in the agribusiness sector of the European Union, its motivations
and its positive and negative effects and its global correlations.
As we are living in a globalized world, economical decisions lead to complex effects all over the world. Often there are trade-offs. People suffering from malnutrition and hunger remains a big challenge. Worldwide the percentage of people living in absolute poverty has decreased continuously. Still action is required, especially regarding an increasing unequal distribution of resources and growth in the world due to globalization and trade. Disadvantages and effects caused by global trade, trade agreements and its negative effects caused by an unequal distribution of resources and growth in the world. Mainly caused by different circumstances and soil factors (different climate, soil, drought) the agribusiness sector is affected by.
Basic conditions differ from country to country, this in turn means different basic possibilities for farmers and production of nutrition. As there is manifested a "Right of food", the agribusiness sector plays a key role as it is the basis for ensuring the nutrition of the world population. Trade agreements developed over years with different intentions, today this brings huge disadvantages to still developing countries which should not lose sight of.
Table of Contents
1. Introduction
1.1 Problem Statement
1.2 Objectives
2. Defining the Agricultural Sector
3. Economic Models
3.1 Ricardian Model of Comparative Costs Advantages
3.2 Liberalization of the Agricultural Market
3.3 Model of Food Sovereignty
3.4 Model of Protectionism
4. Agricultural Protectionism in the European Union and Germany
4.1 Origin of the special position of Agriculture in the EU and Germany
4.2 Common Agricultural Policy of the EU
4.3 Trade vs. Hunger Trade-off
5. Result
6. Conclusion
Objectives and Core Topics
The thesis aims to analyze the mechanisms and global impacts of agricultural protectionism, specifically focusing on the European Union's Common Agricultural Policy (CAP) and its consequences for developing nations, while evaluating the tension between market liberalization and food security.
- Theoretical analysis of international trade models (Ricardian Model)
- Evaluation of agricultural protectionism and its regulatory nature
- Impact of EU subsidies and dumping on the agricultural sectors of developing countries
- Comparison of the "Food Sovereignty" concept versus traditional trade liberalization
- Examination of the trade-off between surplus production and global hunger
Excerpt from the Book
4.3 Trade vs. Hunger Trade-off
Quoting economist Heiner Flassbeck: “If the countries in deficit are to reduce their deficits, the countries in surplus must also reduce their surpluses in return.“
The EU uses different protectionist measures – firstly to be able to compete on the world market and secondly to protect its own market from cheap agricultural products from third countries. The protection of the EU’s internal market from third countries forms the first major problem. Customs, levies (until 1995) etc. blocked suppliers from third countries from access to the large European market, which is particularly important for many countries, mainly for products competing with those from the EU.
Using subsidies allows European producers to produce below their actual production costs. Export subsidies lower the prices of products to or below the world market price level. This approach, known as dumping, is problematically for developing countries. Through the European surplus production, the world market prices decreased. Therefore, producers in developing countries are put under pressure because of their inability to compete with the cheap products of the EU’s agricultural market. In addition, excess production prevents producers from developing countries from finding new markets. As a result, the general dependency of the developing countries increases. Domestic products are pushed out of their local markets by cheap agricultural goods from the EU. Local producers have no incentive to further develop and to expand their business. Moreover, the development of new technologies and the advancement of further production steps are hampered. In the year 2003 the International Food Policy Research Institute (IFPRI) tried to estimate the welfare losses of developing countries caused by the agricultural protectionism of the EU. The study shows that protectionism of all industrialized countries results in a loss of agricultural income of 24 billion US $ per year in developing countries.
Summary of Chapters
1. Introduction: This chapter highlights the global challenge of malnutrition and poverty, setting the context for how agricultural protectionism and trade agreements affect unequal resource distribution.
2. Defining the Agricultural Sector: It defines the primary sector and explains the inverse correlation between the size of the agricultural workforce and a country's level of economic development.
3. Economic Models: This section details theoretical frameworks like the Ricardian model of comparative costs, market liberalization, food sovereignty, and general protectionism.
4. Agricultural Protectionism in the European Union and Germany: It covers the historical origins of agricultural intervention in the EU, the goals of the CAP, and the resulting conflicts regarding global trade and hunger.
5. Result: The chapter concludes that universal application of trade models is problematic and that current EU protectionist practices exacerbate welfare losses in developing nations.
6. Conclusion: It argues for an asymmetrical dismantling of protectionist measures and suggests that supporting local food policies in developing countries is essential to addressing structural causes of poverty.
Keywords
Agricultural Protectionism, Common Agricultural Policy, Ricardian Model, International Trade, Food Sovereignty, Developing Countries, Dumping, Surplus Production, Market Liberalization, Poverty, Hunger, Welfare Losses, Subsidy, Primary Sector, Global Trade
Frequently Asked Questions
What is the primary focus of this thesis?
The work examines the economic effects of agricultural protectionism in the European Union and how these policies influence the economic stability and food security of developing nations.
What are the central thematic fields addressed?
The research explores the intersection of international trade theory, the historical development of the EU's Common Agricultural Policy (CAP), and the socio-economic impacts on farmers in Least Developed Countries (LDCs).
What is the primary research objective?
The objective is to analyze whether current protectionist strategies of the EU are compatible with global development goals and to propose alternatives that prevent the displacement of local producers in developing markets.
Which scientific methods are employed?
The author utilizes a qualitative analysis of established economic models, such as the Ricardian Model of comparative advantage, and evaluates empirical findings from international organizations like the IFPRI and FAO.
What topics are covered in the main section?
The main section moves from general economic theory to the specific implementation of the CAP, detailing how high intervention prices lead to surplus production and dumping in global markets.
How would you describe this work using keywords?
Key terms include agricultural protectionism, CAP, dumping, food sovereignty, and global trade inequality.
What is the significance of the "Food Sovereignty" model in this analysis?
The author contrasts the traditional free-trade approach with "Food Sovereignty," viewing it as a political concept that prioritizes the right of a nation to regulate its own agricultural production to ensure local sustainability.
Why does the author advocate for an "asymmetrical" reduction of trade barriers?
The author argues that a linear approach to liberalization neglects the varying levels of development and infrastructure in different countries; therefore, dismantling barriers should be tailored to specific local needs to protect vulnerable producers.
- Arbeit zitieren
- Isabelle Jaeschke (Autor:in), 2022, Effects of Agricultural Protectionism, München, GRIN Verlag, https://www.grin.com/document/1194038
