Economic Factors Affecting Farming
It is doubtless that farming is one of the oldest professions in the world. Nonetheless, there are numerous economic factors, which affect this profession. Today, farmers all over the world confront a range of challenges in a complex economic environment. For example, customers have access to the global market and have a variety of farm products to choose. Oftentimes, farmers are at the mercy of the weather and economic factors. In this article, we discuss these economic factors, which largely affect farming in the world.
To start with, prices of commodities have far-reaching effects on farming. For instance, the price of some farm products is pegged on factors like the weather and future projections by investors in the market. The demand for these commodities for food and nonfood uses further complicate the situation. In most cases, farmers make profit or losses depending on the rates the buyers in the industry are willing to pay for the products. International factors equally have a hand in determining the price of commodities in the local market because of the existing market linkages globally. Consider the performance of a country’s currency! Under normal market conditions, the strength or weaknesses of the dollar will by far affect prices since farmers compete not only with American producers but also with others from all over the world.
Government policies on levies and subsidies also affect farming industry. For example, the American government gives financial support to corn and soy farmers since the federal policy assumes that mass production of such foodstuffs would keep food prices lower. Additionally, this policy ensures that farmers have a measure of stability and allows consumers to acquire a range of processed goods at affordable prices. This applies to products, which are manufactured from commodity crops under the government’s consideration. The basis of this policy is to encourage farmers to continue continue producing these regardless of market trends and conditions.
Another economic factor that affects farming is labor and immigration legislations. In most cases, most agricultural activities depend on labor that is informal and attracts low pay. Furthermore, migrant farmers living illegally in countries play pivotal role in promoting farming activities. However, their illegality affects their effectiveness in offering value addition services to the industry. Because of the poor pay of most jobs on the farm, most native are not willing to take up the jobs. The baseline of this is that most immigration laws affect farming since they have impact on the availability of labor in a country. In countries like India, famers prefer using the cheap and readily available labor as opposed to machinery. On the other hand, the United Kingdom and Japan utilize machines more because of expensive labor. Here, people on the farm could be skilled or not as long as they can use the available machinery. Common machines include tractors, milking machines and harvesters.
Technology also affects farming in different, with numerous advancements. A common area where technology is applied on the farm is through machines and irrigation. The two types of technology play a major role in increasing agricultural products.
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