Seed World

Agriculture’s Impact on Global Trade

Agriculture and trade go hand in hand. Although, trade isn’t reliant on agriculture, it plays a larger role in the industry especially when challenges are faced.

“Canada is a trading nation, and we trade the surplus that we produce,” said Neil Townsend, chief market analyst at FarmLink. “In many cases, the surplus that we produce is critical to the world’s food supply.”

Trading allows agricultural goods to move worldwide. As some regions face challenges like war or weather, they’re able to still get goods from other areas of the world through trade.

“For the seed industry, trade is really important and provide some real benefits,” said Michelle Klieger, president of Stratagerm Consulting. “It adds to adding more quality, more stability and potentially lowering prices.”

Agriculture contributes to trade globally. Trade historically has involved food products and meeting the needs of feeding people globally — which is now more important than ever to feed a rapidly growing world population.

“By having global trade, you’re not just selling to your one country, you’re not selling just to the local economy, but you’re able to get those to a larger economy, economies of scale by selling all over the world,” added Klieger.

Global trade is important not only to the producers and growers providing the food, but also to everyone eating food and therefore relying on food imports to do so. Agricultural global trade is key to food security, but it faces challenges through war, legislation, and non-tariff trade barriers.

“The situation in the Black Sea, where Russia is sort of controlling the export of Ukrainian goods via sea is a big challenge in trade,” offered Townsend as an example. “Agriculture can be caught in the crossfire and be collateral damage.”

“When I was a younger man, I would have thought it’s so clearly beneficial to everybody involved to free up trade,” he continued. “I bet in 25 years, the world will be much freer and trade will be much freer and the exact opposite has happened. I would say that there’s less market access today than there was 25 years ago.”

Klieger agreed adding, “Between trade wars, like the U.S. and China trade war a few years ago, and then the pandemic, we saw a huge reversal, with a lot more tariff barriers, a lot more quotas, a lot more export and import restrictions.”

Trade and agriculture allow the world to be fed and countries to benefit from one another. The policies around trade continue to evolve and as trade faces challenges, agriculture will continue to work towards a solution shared both Klieger and Townsend.