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Impacts of Global Trade on Agriculture and the Biofuel Industry in Brazil
Global trade is the universal commerce that involves countries from different continents in selling and buying goods. Global trade commonly has various impacts that may affect the country either positively or negatively. These impacts may occur in any sector of the country such as agriculture, transport or education. Brazil, just like the majority of other South American countries, participates in large-scale agriculture and trade with other countries. Involvement of Brazil in global trade has various effects on its agricultural and biofuels industries. Notably, the agricultural sector of Brazil has expanded courtesy of global trade. Trading with other countries opened doors for international relations, thus widened the market for their agricultural products. However, it has also had a negative impact on Brazils agriculture. Arguably, global trading caused decline in production as the government began to invest more capital in other businesses, thus neglecting agriculture. This essay will analyze both the positive and negative impacts of global trade on agriculture and biofuels industry of Brazil.
First, global trade has led to the development of agricultural market in Brazil. Initially, Brazil had a smaller agricultural market because it did not cooperate with other countries in a different trade. However, global trade has led to a wider market range for their products. According to the World Bank (2007), when a country is involved in tourism with another country, they happen to relate and know more about each other. The more they interact, the more interested they get to involve in other businesses as well. Brazil usually participates in universal tourism with countries from South America and Europe; close relations fuelled interest in participating in agriculture either, thus causing development in production of their goods to sustain the market. Farmers have to increase their output because there is high demand in their products.
Second, global trade eased transportation of agricultural products from the producers to the consumers. Transportation of goods depends on the state of roads, vehicles and other facilities. Agricultural industrys growth in Brazil is possible due to global trading. Normally, for global trade to be effective, infrastructure and the general transport sector have to be well developed. The development of infrastructure for the sake of quality transport connections and effective trading with other countries have been of great help to the agriculture industry. Brainard (2009) asserts that most agricultural products are usually perishable and depend on air transport so that they can be delivered to the market when still being fresh. International tourism depends on air transportations as well. Thus, Brazil had to enhance this sector in order to improve universal trade. The agricultural sector directly benefited from such improvements: now producers can transport their perishable products with ease due to quality services. In addition, there are bulky goods that depend on trains and road transport.
Third, universal trade is ideal for improving agriculture. Agriculture development depends on the countrys revenue. As Brazil trades with other countries, bigger revenue is collected, which leads to the development of agriculture. With enough money received from global trade, the government purchased better equipment, tools and machinery to support the skilled workforce teams in agriculture. Initially, the workers had to use hand tools, but with more revenue, they can afford machinery. Moreover, this revenue motivates farm workers to give the best output.
Notably, there has been also a certain decline in biofuels and agricultural industries due to global trading. Global trading mostly includes the manufacturing, mining and services sectors. Brazils relations with other countries in these sectors have relatively led to the fall of its agricultural production. The Worldwatch Institute (2012) confirms that, initially, the country depended mostly on agriculture, but introduction of global trade and growth of other sectors shifted attention. With other industries, like mining, developing faster due to cooperation with other countries, the agricultural sector lags behind and, thus, the government shifts its attention to other areas. Other industries also receive support from global investors and sponsors, making workers move their interests from agriculture to other spheres. All those changes negatively affect agriculture.
Apart from that, global trade has also led to a decline in demand for biofuels. Biofuels are the sources of energy obtained from agricultural products. The Brazilians had been largely depending on the biofuels industry until the international trade began to develop. Dufey (2006) affirms that trading with others countries did not only involve common goods and services, but also crude oil. Crude oil mostly comes from the Middle East countries. Brazils global trading has led to importing crude oil from these countries as a source of fuel. The local biofuel industries have declined in their sales and production as most producers began to opt for crude oil.
In conclusion, global trade affects both positively and negatively the agricultural and biofuels industries in Brazil. Global trade is the universal commerce that involves various countries. Brazil participates in agriculture just like most other South American countries. However, its global trading experience has had several impacts on the agricultural industry. Global interaction with other countries has led to widening of its market. As they trade on other goods, they get to understand each other well and introduce each other to diverse sectors they excel in. Furthermore, transportation of agricultural goods got certain improvements due to the development of global trade. Global trade needs good transport systems and so does agriculture. With the availability of the airlines, it is easier to deliver the agricultural perishable goods. Despite all that, global trade had also brought certain negative impacts on the agricultural and biofuels industries. Crude oil importation from the Middle East seriously affects the biofuels industry. Most enterprises prefer crude oil to biofuels, thus leading to the decline in biofuels demand.