Impact of Global Trade on Agriculture

The Basic Issue

The globalization dynamics outlined in the introductory section play themselves out in many ways in rural Manitoba, en every sector of life. Globalization is a moving target, as it is in the process of development. It is a mistake to think that every change is happening as a result of this dynamic. It is important, but it certainly is not the only driving dynamic in the rural scene today.

Rural Development Institute Research Studies

• "Trade Liberalization and Rural Restructuring in Canada" (Two working papers)
  An AARG study on how globalization changes in the financial , product and labor markets have effected rural communities and system of support established to manage them.

•       A. "Impacts of Trade Liberalization and Federal Regulation Development Programs" - Jim Martin and Don MacRae
  This study addresses agricultural trade issues which result from globalization of financial and commodity markets. They note "information is in short supply how trade agreements work and how to measure their positive and negative impacts (p.ii) It is an analysis of the CUSTA (=FTA) impacts on rural communities for the benefit of EEC communities. It has a summary of the Canadian equity programs. Canada has 4 million square miles of land so a lot of "rural" no matter how you define it. They point out that rural and urban communities are no longer geographically bound. The purpose of the definition of rural is to articulate the objective which is two fold:
  • to preserve some agreed on important characteristics of rural communities
  • to create activity for individuals in some area
  Balance increased globalization with
  1. Social practice and political change - improved environment
  2. Increased Technological change
  3. Politicalchange in the world

•       B. "Early Impacts of CUSTA" (=FTA) - Michael Troughton
  Troughton says that the FTA model cannot make Canadian and US differences go away just by saying so, for example in free trade in agriculture. This is an excellent background piece regarding the inherent geographical differences (e.g. in agriculture) between the two countries, and a very good diagram of the projected shifts of agricultural commodity supply to specific US areas.

• "Manitoba in the Central North American Trade Corridor - a Strategic Plan" - Wes Barrett and Richard Rounds.
  This report is a strategic plan for the Manitoba chapter of the corridor. It presents both patterns and potentials for all Manitoba, but particularly in regards to Western Manitoba. Owing to such a diverse group involved, most people could only relate to parts of the plan. The organization lacks an overall sense of direction especially between local and bigger organizations. The corridor started in Minot as a route from Mexico to Alaska with a Churchill spur.

• "NAFTA and the New Rural Economy - International Perspectives" Richard Rounds.
  Three papers from a Gimli, Manitoba conference on NAFTA effects Called NAFTA and the new world economy. I t concerned the international aspects of globalization. This report holds up three perspectives:
  • Mexican - The three internal responses of Mexico to NAFTA's changes (especially rural)
  • Italian - Northern Italy SME's in face of NAFTA type of globalization effect
  • American - low tech is hit the hardest (and are rural based) which creates a differential hit.

• "Small and Medium Sized Exporting Enterprises, Rural Restructuring and Local Economic Development in Quebec" - Andre Joyal. Chapter 11 in Changing Rural Institutions
  This report is of a study of 20 businesses in 5 regions and 6 sectors of the Quebec economy. They were all established businesses, with their names changed to protect the companies. The author has a typology for grouping the characteristics sought in the study:
  • Charactersitics of Executives' Behavior (turned out to be the key factors)
  • Characteristics of Business
  • Characteristics of external business environment

  The study was to find input regarding success factors and the impact of the Free Trade Agreement on Small and Medium Sized Companies (known as "SME's") who exported products.

  He does some case studies and illustrates some of the factors of success. He also has an interesting diagram for illustrating the typologies of exporters. I thin his diagram would be clearer if he used a cube with height width and depth to illustrate the three characteristics:

  1. Development of strategies (simple to complex)
  2. Mobbility of resources (Weak to important)
  3. Committment of Management (reactive to proactive)

• "Assessing Resource Dependent Community Impacts in Ontario" - Jeremy Williams and Gary Bull.
  

• "Globalization and Regionalism - Social and Rural Impacts"Yves Chaloult, Chapter 16 in Changing Rural Institutions
  This a very hopeful article in that the author does not see the inevitability of the underlying philosophy of globalization as necessarily connected to the "inevitability " of globalization itself. He is very much pro consumer and human rights as well as the preservation of cultural values. That puts him very much against the headlong plunge towards universal liberal economic philosophy.

  He notes the ravages that liberal economic philosophy has wrecked on rural society commenting that poverty there is rampant despite that fact that the ratio of rural to urban population has dropped from 2/3 to 1/3 overall. His focus is on the North and south American situation which is targeted to become the largest trading block in the world by 2005, having started by mutual agreement to go in that direction in 1994.

• "Rural Restructuring: Causes, Consequences and Opportunities" - Sally Shortall and John Bryden. Chapter 17 in Changing Rural Institutions
  These two authors do not accept the inevitability of globalization. Coming from Scotland and Ireland, they offer a summation of and reflection on the conference from which this book of articles emerged. There is a potpourri of observations about the current situation, for example:
  • the pressures federal governments are under in the globalizing context
  • rural poverty is not researched very much but is a big reality
  • There are world and regional-block trading negotiations underway at the same time, and the regional ones are progressing faster.

  He sees in the globalization efforts a chance for the traditionally marginalized of the world to finally be included rather than excluded yet again. I think he is a bit optimistic there.