The global economic crisis that started in late 2008 has led to a sharp curtailment of international trade, including a short-term decline in the value of global agricultural (ag.) trade of around 20%. Global ag. trade after slowing will continue to grow in the future. Economic growth prospects of emerging and developing countries will be important in determining composition of trade toward increased high-value products. The crisis is leading to a realignment of exchange rates, and the ultimate resolution of the crisis will depend on adjustments in the exchange value of the U.S. dollar. The U.S. ag. sector would benefit from a depreciating dollar, which results in high export earnings, high ag. commodity prices, increased production, and increased farm income. Illus.
The world economic crisis that began in 2008 has major consequences for U.S. agriculture. The weakening of global demand because of emerging recessions and declining economic growth result in reduced export demand and lower agricultural commodity prices, compared with those in 2008. These, in turn, reduce U.S. farm income and place downward pressures on farm real estate values. So far, the overall impact on U.S. agriculture is not as severe as on the broader U.S. economy because the record-high agricultural exports, prices, and farm income in 2007 and 2008 put U.S. farmers on solid financial ground. Moreover, the debt equity ratios in agriculture tend to be more conservative than those in most other sectors of the economy. There is much uncertainty concerning the depth and extent of the crisis. The outcomes for U.S. agriculture are dependent on whether or not there is a global realignment of exchange rates to correct current macroeconomic imbalances.
This book explores the world economic crisis that began in 2008, and which has had major consequences for U.S. agriculture. The weakening of global demand because of emerging recessions and declining economic growth results in reduced export demand and lower agricultural commodity prices, compared with those in 2008. These, in turn, reduce U.S. farm income and place downward pressure on farm real estate values. So far, the overall impact on U.S. agriculture is not as severe as on the broader U.S. economy because the record-high agricultural exports, prices, and farm income in 2007 and 2008 put U.S. farmers on solid financial ground.
The global financial crisis of 2008/9 is the Great Depression of the 21st century. For many though, the similarities stop at the Wall Street Crash as the current generation of policymakers have acted quickly to avoid the mistakes of the past. Yet the global crisis has made room for mistakes all of its own. While governments have apparently kept to their word on refraining from protectionist measures in the style of 1930s tariffs, there has been a disturbing rise in "murky protectionism." Seemingly benign, these crisis-linked policies are twisted to favour domestic firms, workers and investors. This book, first published as an eBook on VoxEU.org in March 2009, brings together leading trade policy practitioners and experts - including Australian Trade Minister Simon Crean and former Mexican President Ernesto Zedillo. Initially its aim was to advise policymakers heading in to the G20 meeting in London, but since the threat of murky protectionism persists, so too do their warnings.
Agricultural growth is a crucial element in resolving food price crises, enhancing food security, and accelerating pro-poor growth. After decades of policy neglect and underinvestment in public goods such as agricultural science, rural infrastructure, and information and monitoring, high food prices have provided some positive incentives for policymakers, farmers, and investors to increase agricultural productivity. By the end of the year 2008-2009, the global crisis had taken a substantial toll of India's economic performance but it was by no means catastrophic. The rate of economic growth had slowed to the 5-6% range in the second half of the year from the 9% average of the previous five years, but it was still much better than the negative growth rates in industrial countries and better than the performance of most significant developing countries with the exception of China.However, with the sudden shrinkage in world trade after September 2008, India's exports in January-Mary, 2009 were about 20% lower than in the previous year. This meant that hundreds of thousands of jobs were lost in sectors like garments, textiles, footwear and leather products and gems and jewellery. This paper try to answer the following questions: How did this global crisis come about? How severe is it and how long might it last? And against the backdrop of this world crisis, what are some of the priorities for India's agricultural sector.To conclude, the unprecedented global economic crisis has definitely taken a toll of India's economic performance. Most likely it has also reduced our potential for economic development in the next 3 or 4 years. However, despite the severity of the global crisis, India's economy has demonstrated considerable resilience, in part, thanks to the strength of our agricultural sector. With sound and determined economic policies we should be able to recover a growth momentum of 7-7.5% in a year or two. That will be a little less than our growth performance in 2003-2008. But it will be far better than nearly every other significant economy in today's world.
