Agricultural Policy and Trade in Developing Nations

The assignment delves into the complexities of agricultural policy and trade within developing countries. It analyzes various topics such as cereal crop cultivation, water resource management, grain security, rice production and trade, food prices, welfare impacts, and the role of multinational corporations in agro-food global value chains. The analysis aims to shed light on the challenges and opportunities facing these nations in achieving sustainable agricultural development and enhancing food security for their populations.

TO STUDY THE PRACTICES OF RICE EXPORTERS TO COUNTER TRADE
BARRIERS AND CURRENCY FLUCTUATION
1. Introduction
1.1 Objective
Rice is one of the most preferred stable foods in a global context. Most farmers
especially in Asia continent practice rice farming for purposes of commercial
purpose. Rice is also exported in various part of the world. Asia continent act as the
main producer and consumer of rice commodity. China and India are the main
exporters of rice commodity. Comparing the total annual production, only about 6-
7% of the rice commodity is traded annually in a global context. Rice exporters face
numerous challenges that incorporate trade barriers (Ha, Nguyen, Kompas, Che. and
Trinh, 2015). They include various government regulations, custom clearance and
product inspection. These problems act has extensively diminished the ability of
exporters to freely conduct their business activity at a global context. Many policies
are formulated in many parts of the world although they are irrelevant in many
countries. In order to accommodate an enhancing a fair trade, most exporters
accommodate various measures and enhance trade liberalization to cope up with
incidences of currency fluctuations. The research below will consider the exporter
practices that can be incorporated in order to avoid the existing barriers of rice in the
international trade.
1.2 problem statement

“TO STUDY THE PRECTICE OF RICE EXPORTER TO DIMINISH THE
EXISTING TRADE BARRIER AND CURRECNY FRUCTUATION IN THE
INTERNATIONAL TRADE”
1.3 BACKGROUND
There exist numerous trade barriers in many countries around the World. The
restrictions are incorporated by both developed and undeveloped countries. They
include the import tariffs, import quantity and customs taxes (Baldwin, 2016). Some
countries also formulate some restriction policies that include currency fluctuations,
deficiency in terms of payment and incorporation of input subsidies. Recent research
by World economic forum shows that protectionism policy is incorporated in most
developing nations. The forum uses the country average international tariff burden for
purposes of measuring the custom duties imposed to imports of various commodities.
Research conducted by USDA shows that Japan is one of the countries that impose
high trade restriction on rice commodity. The current structures of imports and
exports can be significantly affected by the global liberalization which leads to rapid
increase of rice commodity price.
1.4 Project Objective
The main purpose of the project is to look at the market sector of rice commodity and
the enacted policies of rice exporters. The research also incorporates the discussion of
variance of money that can accommodate fare price of rice commodity. The study
will give some significance the export of rice in the international trade and the
impacts arising as a result of various existing market barriers and trade restrictions.

The study will also incorporate the existing currency fluctuations that diminish the
ability of rice exporters to participate in a fair market structure.
1.5 Project scope
The study aims at enhancing the good relationship of the custom authorities of rice
exporters and the country of imports. Involvement of custom authorities should be
enhanced in both the country of imports and the exporting country. Rice traders should
also be enhanced with a comparative advantage.
2. Literature review
Rice is one of the most vast consumed food commodities in many continents with Asia
continent leading in terms of production and consumption. Research conducted shows
that out of the 76% of the rice exported are mainly consumed by Asia continent
(Adebayo Oluwakemi and Omodele, 2015) Constant rise of rice price has been observed
in recent times because most exporters fear incidences of rice commodity shortage. The
total production of the rice commodity in the global context does not favor the
international trade. The leading producers of rice commodity include China, India,
Thailand, Pakistan and Vietnam as they produce more than 50% of the total export.
Pakistan has a comparative advantage over other Asian countries as it is located in a
strategic place where it trades its rice and dominates over other competitors (Bishwajit,
Ghosh and Peneluppi, 2017). Pakistan economy is dominated by staple rice commodity
(Settle, 2016). The country is highly attributed in determining the foreign exchange
earnings. The country experience delays of data delivery because the rice production

incorporate manually generated statistics as well as its labor intensity. Due to
incorporation of extrapolating results from collected samples, the data obtained appear to
be anomalous after through cross examination. Existence of such hindrances poses a
great threat when it comes to designing strategic food security and a favoring rice
production system.
Rice is also the main subsistence food consumed in India making it secure in terms of
food security of over half of the total World population. The government of India has
established various protection measures in the agricultural sector in order to cater for
rapid food shortages that occur frequently (Singh, 2017). Inflation level has rapidly
increased as a result of unstable increase of prices of rice commodity. The Indian
authority banned the non- basmati rice in the year 2000 and also imposed the export
taxation of the rice variety with the aim of reducing the local rates and increase the
countries domestic supplies (Grover, 2017). This policy restricted the total amount of rice
exported out of the country. There occur various theoretical measures of price as a result
of imposition of export restrictions and trade tariffs in any given territory. Looking at the
India context, the fluctuations of the local paddy prices will affect the producers while the
high imposition of global prices will favor the rice producers. The monopoly power of
India economy had a high expectation of enhancing the national economy as a result of
enacting some of these trade policies. Thailand and Indonesia also incorporated the India
policy and these resulted in increased level of rice prices at the global level.
Bangladesh government has worked in a manner likely to suggest that it emphasis on
giving priority of price stability of the rice commodity. About 75% of the total arable
land is meant to produce the rice commodity (Barrow, 2016.). This enhances a total

consumption of than 50% of the intake of carbohydrates per person. The country also is
the 4th leading producer of rice commodity in the World although its total supply doesn’t
meet the demand of the rice consumption. Incidences of unstable price is facilitated the
alternating movement of supply and demand. The public food distribution system is also
another contributing factor that affects the unstable price of rice. The stock behaviors
and seasonality in terms of rice production some of the other contributing factors to the
high demand of rice commodity.
The Pakistan government has also united the trading systems in the global context so as
to enhance the comparative advantage over regional countries to ensure a progressive
liberalization. The country has the ability to expand its market share as it is enhanced
with the ability of meeting the international demands in terms of quality rice commodity
that ensure standard safety (Saitone, and Sexton, 2017). Accommodation of technical
knowhow that incorporate the use of technological advancement in the agricultural sector
can be enhanced so as to improve the overall rice production. There exist some
underlying issues in Pakistan in terms of facilitating the essential resources that are
required by the World Trade Organization for purposes of trading fairly in the
international market. The exporters of rice commodity in Pakistan are required by the
SPS to take appropriate measures. Various institutions in the country have also gone a
step further and incorporated new systems that ensure quality assurance schemes. As a
result the rice production input ha increased at a significant rate. This would
accommodate the rice exporters with a comparative advantage over other Asian countries
that export their rice commodity.

Research conducted also shows that many rice exporting countries incorporate the use of
central agencies. China and Pakistan among other countries have some control over the
central agencies that are incorporated to control their exported rice. United States of
America do not have some dominant organization involved in controlling their rice
commodity (Narula and Wahed, 2017). In the early 20th century Thailand share more than
a third while China which have a large share due to its high population. More than ¾ of
total exports found their way to Pakistan, China, US and Thailand. ½ of the total global
rice export conducted annually are enhanced by Pakistan, China and Thailand. Most
countries that produce the rice commodity consume it domestically.
Vietnam is highly attributed to irrevocable export quota (Van, 2017). The last two
decades have witnessed increased price of rice commodity in most developing countries.
The main reasons that contribute to price inflation is due to trade liberalization,
uncontrollable prices and devaluation which affect most poor families in terms of striving
to facilitate the basic needs that incorporate accommodation of stable food (.Moody,
2017). Research conducted to obtain the effects of trade liberalization on the rice prices
was enhanced by a spatial- equilibrium model. Results obtained show that the price
would continue to hike if elimination of rice export quotas is incorporated. Increase of
price also ascertains that the levels of poverty of poor farmers will diminish at a
significant rate. The main reason as to why the use of spatial- equilibrium is enhanced is
to get a relevant notion of the constant change of rice prices.
Foreign exchange rates are important factors as they affect the global rice trade. This is
because international prices are quoted in US currency. If the local currency of any rice
exporting countries appreciate relatively as dollar, its export price will also increase and

this would result in a weaken competition in the international trade (Samaniego, Vallejo
and Martínez-Alier, 2017). On the other hand if the importing country’s currency
appreciates relative to the dollar, the importation price (dollars) decreases and this has a
comparative advantage to that particular country.

Compound Annual Growth Rate and Co‐Efficient of Variation for Rice Exporting Country As
Percentage of Total World Exports Of Rice.
N ot
e:
*CAGR‐ Compound Annual Growth Rate, #CV‐ Co‐efficient of Variation.
The above table shows detailed information about the compound annual growth rate of rice
production in various Asian countries. India was at 1.87 in the year 1991. In the year 2010 India
had a higher CGR than China .the CAGR rice production in China was at 1.61% a higher amount
recorded in India. Indonesia share varied from 8.62 to 9.88 which show a significant upward
trend. Rice production in Bangladesh had a sustainable growth rate in the two decades. The rice
production in Vietnam has varied from a low level from 3.78% to 5.95% although it shows a
continuous rise during the two decades. The same case is enhanced in Thailand as the production
rate has increased during the two decades.
TREND ANALYSIS OF RICE PRODUCING COUNTRIES DURING 1991- 2010
country/year *CAGR #CV
1991-2000 2001-2010 1991-2000 2001-2010
India 12.75 14.73 5.64 4.28
China 14.91 2.90 7.73 2.71
Indonesia -58.98 12.17 20.35 20.65
Bangladesh 36.45 40.40 17.02 8.35
Vietnam 15.29 18.98 4.48 6.04
Thailand 5.02 17.74 1.99 5.42

Production of Rice (Countries) for the Periods from 1991-2010 Linear regression analysis.
Country Constant Coefficient t-value p-value R-square
India -2279108529 1.202 3.3636 0.0035* 0.3860
China 53590159 6.690 0.1651 0.8707 0.0015
Indonesia -1650507088 8.515 8.7593 0.0000* 0.8100
Bangladesh -2408203877 1.241 14.7398 0.0000* 0.8100
Vietnam -2047276441 1.039 22.9156 0.0000* 0.9669
Thailand -1400358060 7.132 23.9690 0.0000* 0.9696
Pakistan -435289632 2.21 6.5902 0.0000* 0.7070
The above table shows the correlation between the years of production. statistics of
Bangladesh, Viet Nam, Thailand, Philippines and Pakistan are significantly positive and shows a
5% level of significance (P<0.05). It means that as year advances with increase in Corresponding
production during the year. But a significant and negative correlation was observed between
years of production in China. (P<0.05). Surprisingly, a non-significant correlation was seen
between year of production and production in India and Indonesia at 5% level of Significance
(p>0.05).
3. Hypothesis

1. Constant rise of rice price in international trade have been observed in recent times in
many rice producing countries.
2. Government policies impose some restriction on the amount of rice commodity
exported out of the country.
3. Foreign exchange rates are affect the global rice trade
4. Research design and methodology
-
- Qualitative research
Participant’s observation enhanced collection and storage of field notes as well as
analyzing the data exporters. Survey and sample collection was selected in adjacent
rural towns of various countries of Asia. It was enhanced by a spatial- equilibrium
model in order to obtain the effects of trade liberalization on the rice prices (.Jacoby,
2016). Relevant respondents were interviewed to determine their social economic
status. Milled grains underwent some assessment of physical traits.
- Quantitative research
Analytical methods of mixed methods research was selected for its ability to provide
completeness, explanation, unexpected results and illustration. Multiple choice and
true/false survey questions were facilitated to the critical rice consumers, traders and
producers.
5. Research limitations

The indicators were selected using expert judgment comprising a small panel of
researchers. Limited time required to obtain appropriate process for indicators
selection (.Santana and Stelfox, 2014). The shift of paddy fields might have a
significant effect on the global rice system.
6. Research plan
1. General characteristics
2. Pattern of production and trade
3. Economic, market and institutional integration
4. General rice government policies
5. Current issues and problems
6. Review of rice policies
7. Conclusion
Rice trade liberalization has affected many producers as well as the traders. The
research conducted believe that trade liberalization will bring a greater benefit to the
rice producing countries (Bouët and Laborde, 2017). Poverty reduction can also be
enhanced and this reduces the economic burden. Unfair trade practices can be
enhanced by imposing policies that protect traders and subsidies.

8. References
Adebayo Oluwakemi, O. and Omodele, I., 2015. The current status of cereal (maize,
rice and sorghum) crops cultivation in Africa: Need for integration of
advances in transgenic for sustainable crop production. International Journal
of Agricultural Policy and Research, 3, pp.133-145.
Baldwin, R., 2016. The World Trade Organization and the future of multilateralism.
The Journal of Economic Perspectives, 30(1), pp.95-115.
Barrow, C.J., 2016. Water resources and agricultural development in the tropics.
Routledge.
Bishwajit, G., Ghosh, S. and Peneluppi Jr, J.R., 2017. Dynamics of Grain Security in
South Asia: Promoting Sustainability through Self‐sufficiency. Sustainability
Challenges in the Agrofood Sector, p.103.
Bouët, A. and Laborde Debucquet, D. eds., 2017. Agriculture, development, and the
global trading system: 2000–2015. Intl Food Policy Res Inst.
Grover, R.K., 2017. Unit-10 Marketing, Price and Trade Policies. IGNOU.
Ha, P.V., Nguyen, H.T.M., Kompas, T., Che, T.N. and Trinh, B., 2015. Rice
production, trade and the poor: regional effects of rice export policy on
households in Vietnam. Journal of Agricultural Economics, 66(2), pp.280-
307.
Jacoby, H.G., 2016. Food prices, wages, and welfare in rural India. Economic
Inquiry, 54(1), pp.159-176.
Moody, P., 2017. Gravedigger's Son. Sky Pony Press.

Narula, R. and Wahed, M.S., 2017. The Dominant Presence of MNES in Agro-Food
GVCs: Implications for the Developing Countries. In Food Security and
Sustainability (pp. 71-88). Springer International Publishing.
Saitone, T.L. and Sexton, R.J., 2017. Agri-food supply chain: evolution and
performance with conflicting consumer and societal demands. European
Review of Agricultural Economics, pp.1-24.
Samaniego, P., Vallejo, M.C. and Martínez-Alier, J., 2017. Commercial and
biophysical deficits in South America, 1990–2013. Ecological Economics,
133, pp.62-73.
Santana, M.J. and Stelfox, H.T., 2014. Development and evaluation of evidence-
informed quality indicators for adult injury care. Annals of surgery, 259(1),
pp.186-192.
Settle, A.C., 2016. Locating financialization in a less-developed economy: Micro
responses to liberalization and volatility in Pakistan. Competition & Change,
20(2), pp.106-121.
Singh, S.P., 2017. Unit-2 Agricultural Sector Goals and Policy Options. IGNOU.
Van, V.T.H., 2017. A monetary union for the ASEAN?-An empirical assessment.

9. Appendix
Appendix 1. EL Salvador
Appendix 2. Trade barriers