Agricultural Exports, How it Affects the Global Economy in 7 Ways

Agricultural Exports, How it Affects the Global Economy in 7 Ways

How Agricultural Exports Benefit the Global Economy in 7 Ways

Agricultural exports are the products of farming, livestock, fisheries and forestry that are sold to other countries. They include food, feed, fiber, fuel and other raw materials. Agricultural exports play a crucial role in the global economy, as they provide income, employment, food security and environmental benefits for both exporting and importing countries. In this article, we will explore how agricultural exports benefit the global economy in seven ways.

1. Agricultural exports contribute to economic growth and development.

The agricultural sector is a major source of income and employment for many developing countries, especially in rural areas where poverty is most prevalent. According to the World Bank, agriculture accounts for 65 percent of employment and 25 percent of GDP in low-income countries. By exporting their agricultural products, these countries can increase their foreign exchange earnings, stimulate their domestic production, create more jobs and reduce poverty for millions of farmers and rural workers. According to the Food and Agriculture Organization (FAO), the value of global agricultural exports in 2020 was 3.7 times higher in nominal terms than it was in 2000, while the share of agriculture in total merchandise trade value went from 6.3 percent in 2000 to 8.5 percent in 2020. This shows the growing importance and potential of agricultural exports for economic growth and development.

2. Agricultural exports enhance food security and nutrition.

Food security and nutrition are essential for human health and well-being. Food security means that people have physical, social and economic access to sufficient, safe and nutritious food that meets their dietary needs and preferences for an active and healthy life. Nutrition is the intake of food and its utilization by the body for growth, maintenance and health. By increasing the availability, accessibility, affordability and diversity of food, agricultural exports can improve the food security and nutrition of both exporting and importing countries. Agricultural exports can also reduce food price volatility, buffer against shocks and crises, and foster resilience and adaptation to climate change.

3. Agricultural exports support environmental sustainability.

Environmental sustainability means that natural resources are used in a way that meets the needs of the present without compromising the ability of future generations to meet their own needs. Environmental sustainability is vital for agriculture and human well-being, as agriculture depends on natural resources such as soil, water, biodiversity and carbon sinks, while human well-being depends on the ecosystem services that these resources provide. Agricultural exports can promote the adoption of sustainable practices and technologies that enhance productivity, efficiency and resource use. Agricultural exports can also incentivize the conservation and restoration of natural resources that are essential for agriculture and human well-being.

4. Agricultural exports foster innovation and competitiveness.

Innovation and competitiveness are key drivers of economic growth and development. Innovation is the process of creating new or improved products, processes or services that meet the needs or expectations of customers or markets. Competitiveness is the ability of a country or a firm to produce goods or services that meet the quality standards of the global market while maintaining or increasing its market share. Agricultural exports create opportunities for innovation and competitiveness in the agricultural sector, as they stimulate research and development, knowledge transfer, quality improvement, value addition and market diversification. Agricultural exports can also enhance the capacity and skills of farmers, traders, processors and exporters to meet the standards and demands of global markets.

5. Agricultural exports strengthen regional integration and cooperation.

Regional integration and cooperation are processes of increasing economic, social, political and cultural interactions among countries that share common borders, resources, markets or challenges. Regional integration and cooperation can bring benefits such as economies of scale, market access, policy coordination, conflict resolution and collective action. Agricultural exports facilitate regional integration and cooperation among countries that share common agricultural products or markets. Agricultural exports can also foster peace and stability by reducing conflicts over land, water and other natural resources, and by enhancing trust and dialogue among different actors.

6. Agricultural exports boost consumer welfare and choice.

Consumer welfare and choice are important aspects of economic well-being. Consumer welfare is the satisfaction or utility that consumers derive from consuming goods or services. Consumer choice is the ability or freedom of consumers to choose among different goods or services that suit their preferences. Agricultural exports increase consumer welfare and choice by offering a wider range of products, prices, qualities and preferences. Agricultural exports can also improve consumer health and safety by ensuring traceability, transparency and compliance with sanitary and phytosanitary measures.

7. Agricultural exports create positive spillovers for other sectors.

Agricultural exports have positive spillovers for other sectors of the economy, such as manufacturing, services, infrastructure and tourism. Agricultural exports can also generate multiplier effects for income, employment, investment and tax revenue.

In conclusion, agricultural exports are vital for the global economy as they provide multiple benefits for both exporting and importing countries in terms of economic growth, food security, environmental sustainability, innovation, regional integration, consumer welfare and spillovers for other sectors.

Agricultural exports: trends and challenges

Agricultural exports are an important source of income and food security for many countries around the world. In this blog post, we will look at some of the latest statistics and developments in this sector, as well as some of the challenges and opportunities that lie ahead.

Global agricultural trade value reached a record high in 2020

According to the Food and Agriculture Organization of the United Nations (FAO), the value of global agricultural exports in 2020 was 3.7 times higher in nominal terms than it was in 2000, while the share of agriculture in total merchandise trade value went from 6.3 percent in 2000 to 8.5 percent in 2020. This reflects the growing demand for food and agricultural products, especially from emerging economies and regions with high population growth.

The main drivers of this growth were vegetable oils, meat, dairy products, fruits and vegetables, and cereals, which together accounted for more than half of the total agricultural export value in 2020. The top five exporters of agricultural goods in 2020 were the European Union, the United States, Brazil, China, and Canada, while the top five importers were the European Union, China, the United States, Japan, and the United Kingdom.

The Netherlands is a leading exporter of agricultural goods in Europe

The Netherlands is one of the most prominent players in the global agricultural trade, especially in Europe. In 2021, the value of its agricultural exports reached a record high of 104.7 billion euros, a 9.4 percent increase from 2020. This makes the Netherlands the second-largest exporter of agricultural goods in the world, after the European Union as a whole.

The main products that the Netherlands exported in 2021 were floriculture products (such as flowers, plants, bulbs, and seeds), which increased by 25 percent from 2020, followed by meat products, dairy products, vegetables, and fruits. The main destinations for its agricultural exports were its neighboring countries, such as Germany (which accounted for a quarter of the total), Belgium, France, and the United Kingdom.

Brexit poses challenges and uncertainties for agricultural trade

One of the major events that affected the global agricultural trade in recent years was the withdrawal of the United Kingdom from the European Union, also known as Brexit. Since January 1, 2021, new rules and regulations have been applied to the trade of goods between the UK and the EU, which have implications for both exporters and importers.

One of the main effects of Brexit was a significant decline in the re-exports of agricultural goods from the Netherlands to the UK, which dropped by 35 percent in 2021. This is because import duties have made it more attractive to ship goods from outside the EU directly to the UK, rather than via the Netherlands. On the other hand, domestic exports of agricultural goods from the Netherlands to the UK increased by 14 percent in 2021, but this may change as more border checks and customs formalities are expected to be implemented in 2022.

Brexit also poses challenges for other countries that trade with both the UK and the EU, such as China, which is one of the largest importers of agricultural goods from both regions. According to a report by Rabobank, China may face higher costs and lower availability of some products due to Brexit, such as pork, dairy products, wine, and seafood. However, China may also benefit from new trade opportunities with both parties, as well as diversify its sources of supply.


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