Agricultural globalization increasing It has been more than 200 years since Paul Revere rode through the countryside warning the residents, "The British are coming! The British are coming!"
Now America faces another invasion. But this one doesn't involve armies and navies. This one involves globalization and foreign trade. For example, Kubota, a tractor manufacturer, from Japan competes with Case International, an American manufacturer. Farmers can sell grain to the local co-op or to Cargill, a Minneapolis-based company with activities in more than 60 countries and annual sales of more than $50 billion.
"Two events have helped increase the presence of multinational agribusinesses," said Daryll E. Ray, who holds the Blasingame Chair of excellence in agricultural policy at the University of Tennessee's Institute of Agriculture. Ray is also the director of UT's Agricultural Policy Analysis Center.
"One," he said, "is the transition of several countries from centrally planned to more market-oriented economies. The other is the increased globalization of the world's economies and the movement toward freer international trade."
International agribusinesses have been there for years, he explained. But formerly unavailable markets have opened up, or countries permit greater access to existing markets.
Here are some of the examples of what's happening.
- John Deere recently inked a deal with the Tianjin tractor Manufacturing Company in China to form a joint tractor-manufacturing operation.
- John Deere also recently entered into a joint venture with India to manufacture 55-horsepower tractors.
- Cargill has reportedly signed a joint-venture agreement with Yunnan Phosphate Fertilizer Factor in China. Production of diammonium phosphate fertilizer is expected to reach 600,000 metric tons.
- Cargill plans to invest $8 million to double the capacity of its fertilizer plant in Argentina's chief port complex in Rosaria. Santa Fe.
- Pepsi Foods, Ltd., is undertaking contract agricultural production near Bangalore, India.
- AGCO, based in Duluth, Ga., has entered into an extensive agreement with the Russian Ministry of Agriculture to manufacture agricultural equipment.
- AGCO has also entered into an agreement to acquire Ag-Chem Equipment Company. The primary focus of Ag-Chem is agricultural machinery designed for the application of fertilizer and chemicals to farm fields.
Future discussion of agricultural policy has to take into account the massive multi-national agribusiness firms. "No longer are we jugglers with just three balls: U.S. production, U.S. government policy and the traditional way we have thought of U.S. exports, " Ray said.