Agricultural subsidies, transnational corporations, (TNC) and trade barriers are three international operations that impact the production and availability of food at international and local scales.
Agricultural subsidises can affect food production, as they can create or reduce food production. In the sector of agriculture, finances are usually required to promote and fund crop productivity and growth. Local and international governments can subsidize farmers and agribusinesses to encourage agricultural innovations, sustain their incomes, and provide sufficient supplies to continue farming. Subsidies are usually given for short-term aid, in order to endorse new agricultural practices and methods that can speed up productivity and thus produce more available food. In Europe, subsidies have been able to increase food productivity, as the European Union established the Common Agricultural Policy (CAP) to increase productivity for European farmers. In 2012, CAP subsidized farmers with 67 billion dollars and created guaranteed minimum prices for their productions on the farms. This allowed farmers to produce at the maximum rate possible, as they were secured with a guaranteed market. 70% of the CAP budget is directed to farmers of cereals, sheep and beef, and cultivable crops. The EU was storing 12,187,741 tons of cereal and 1,112,651 tons of sugar, enough to add to 445 billion cups of tea. Due to the subsidies provided by the EU, farmers in Europe were able to receive full incomes and the population was able to depend on this supply of food productivity. However, subsiding only certain farm products such as butter and milk, led to an overproduction of these products in some countries and a diminishing production in other countries. In the 1990s, overproduction of food, specifically 88 million tons in Europe, led to the sale of food at a decreased price. This caused problems for farmers in lower-income developing countries, such as Brazil, who were not able to compete with the diminishing prices of products in Europe and lost an annual 100 billion dollars in income.
In India, agricultural subsidies have mainly had a negative affect on the country’s environment, as they have triggered unsustainable energy usages. The government of India subsidized the cost of energy to irrigate and pump agricultural crops in an attempt to increase food production. However, this had a negative affect on the environment, as famers began pumping more water than was needed to sustain their crops. 110 cubic kilometers of groundwater has been lost from 2002 to 2008, due to the over pumping of water to irrigate rice, wheat and barley. Since 2008, India has been one of the least efficient users of groundwater, with 839 of the 5,723 500-square-hectar units being overexploited.
Transnational corporations (TNCs) are firms that own cooperation and supply chains in many different countries through direct foreign investment. The TNC that dominates the global food industry is Swiss Corporation Nestlé, located in Switzerland, generating a turnover of over 112 billion dollars. In 2008 in the United States, TNCs responsible for the production of global food, such as Kraft Foods, created a profit of 3.2 trillion dollars for the country. TNCs can increase food production and availability in different areas of the world by growing new food crops and they control the main exports of various foods to countries globally. For example, 60% of terminal grain handing facilities are owned by four companies: Cargill, Cenex, Harvest States, ADM, and General Mills and 82% of corn exporting is concentrated in three companies: Cargill, ADM and Zen Noh.
However, since TNCs increase the production of foods globally, they have a negative effect on local available food, as less land is available for food crops. Also, many TNCs produce food products for exporting to countries outside from which the agribusinesses and corporations are located. Some farmers may leave their local businesses to work as a TNC farmer, which only helps increase food production in other parts of the world. TNCs can also be seen as having a negative influence on food production, as they value profits over human needs. In the UK, for example, fifty years ago, 50-60p of every pound spent on food and drinks were allocated to the farmers, but now it is just 9p in every pound.
Tariffs and trade barriers are established in some countries in order to raise consumer products or protect local producers. Tariffs can be viewed as importing blockades, as they place a price on importing products and place additional taxes on items. Tariff escalation is placing tariffs on importing agricultural products in less developed country in favor of producing items in one’s own countries. Tariffs and trade barriers can encourage food production, agricultural industries, and can stop unwanted imports in the destination country. For example, in Russia, a food import barrier was created in order to alter the unloading of meat and fish produces from the EU that failed their standards. The trading barrier established was beneficial for Russia, as the dumping of these products created a health hazard for the country.
However, tariffs can have a negative financial impact on the country of origin. For example, tariffs placed on imports cost developing African countries lots of money to obtain certain products. Only 5% of African cereal imports come from other African countries, which means that most of cereal imports require these countries to spend an increasing amount of money. By eliminating these cross-border barriers, it would allow more trade, a decreased price on cereal imports and save billions of dollars for African governments. In some countries, trading blocks have thus been established to allow trading without tariffs and reduced protectionist policies. For example, the trading block in the European Union has helped reduce disparities and increase the production of food within European countries. The Banana-Wars helped European countries obtain more produces as it reduced the tariffs on bananas in 2009, which caused banana prices to fall up to 12% for European citizens.