Essay on New Zealands Agriculture Industry
A lot of farming is practiced amongst the people who live in areas where the climate is favorable. Dairy farming is common because of the availability of land to keep livestock and also the vegetation available as a source of food for the livestock (Foote, et, al. In as much as fruits and other crops are also grown, most of the revenue from agriculture in New Zealand comes from dairy farming. Incorporating agriculture in New Zealand into international trade yields a picture that positions this nation at a better place economically because it contributes significantly to the global GDP. The essence of this paper is to critique the international trade theory while putting the focus on the agriculture industry in New Zealand.
This is a country that has benefited from a lot of exposure to the international markets because there are no sanctions for it. However, it is important to understand in the 1970s New Zealand used to provide subsidies to its farmers until 1984 when they finally stopped. By the year 1990, agriculture was one of the sectors in the country that was deregulated. The idea that there were no subsidies for farmers did not encourage laxity but rather made them become more efficient in the activities they carried out. Their ability to purely depend on pasture has been the pillar towards the success in agriculture, especially in livestock keeping. However, in the recent past, the economic environment has been significantly changing due to a lot of factors including technology.
This has made an international trade very competitive and, therefore tough to find markets for agricultural products. New Zealand has managed to overcome the odds and still manage to find markets for its agricultural produce. The emergence of Intra-Industry Trade (IIT) did not have a lot of impact on the patterns of trading of New Zealand because of its highly established agricultural sector that has seen local industrialization grow significantly (Shenkar, et, al. New Zealand’s Competitiveness: From a Perspective of the International Trade Theory The international trade theory is critical in determining a country’s competitiveness in a given industry because of the impact it has on the activities that take place within the sector. ) Factor Conditions Amongst the four elements of Porter’s Diamond is the factor conditions which essentially talks about the resources available to a country from a business perspective.
According to this element, Porter elaborates that a country’s competitiveness is determined by the availability of the necessary resources needed to facilitate the happening of business. The resources being referred to in this case include manpower, infrastructure, capital, and other physical requirements that a business may need to prosper. Once the resources are available then business can be carried out smoothly and efficiently. However, manpower is the greatest of all the others in the sense that people play a big role in the business ranging from the physical duties they handle to the technical responsibilities they dispense during a normal day of conducting business. ) Firm Strategy, Structure, and Rivalry The firm strategy and structure pertain to how a business has been set up whereas rivalry comes in when there is competition in businesses for the customers.
Once enterprises in an industry begin competing for clients then that is good economically. This implies that the firms in that industry will have to go an extra mile in order to make a forward step in business. As such, the competitiveness of an industry, in general, rises significantly. Consequently, the markets explode into the international scene for the search of more customers to offset the competition that is experienced locally. Most of the success is attributable to the hard work that is put in by the farmers. Because of the trade partners that New Zealand has, the international trade theory clearly fits into the agriculture industry and this is visible from the exports that New Zealand sells to her allies.
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