Economic Factors Affecting Crop Marketing
Crop production is one of the oldest professions across the globe. It is known to be quite lucrative bearing in mind that many economies depend on farming. Modern farming and crop production is affected by varying economic factors including competition.
Farmers are faced with tight competition from other farmers as well as consumers. Consumers often select produce grown globally compared to others. This affects the profits that farmers get from crop production. Similarly, governments often provide incentives for production of specific crops rather than others.
In the event of such, crop growers and marketers who are independent marketers can easily create their own markets especially through direct sales. There are also other creative strategies employed by crop growers in different parts of the states that are adversely affected by other economic factors including
Immigration and labor laws
Mainstream agriculture and crop marketing largely depends on poorly paid labor force, the migrant farmers. They are illegal migrants and often earn little compared to a small number of crop marketers who are well off. Buying crop produce from such farmers means buying at low prices to which many people are accustomed to.
Additionally, relying on migrant farmers for crop marketing influences their wages and in the end the prices of farm produce.
Immigration laws also influence the availability of labor and in the end; it can allow or prevent subsistence of wages as well as market for crop produce.
Prices of commodities
The prices of different crops especially soy and corn largely depend on a wide range of factors including investor speculation, demand for the crops and weather changes. Their demand for both nonfood and food usage also affect crop marketing of these commodities and biofuels.
Crop farmers therefore lose or earn money based on current commodity prices. It depends on the amount that consumers or industrial buyers pay for their output. Similarly, the prices of commodities and crops are often affected by international economic factors including the strength and weakness of the dollar. In such a case, crop farmers in America will compete with other farmers across the globe.
With high demand and high prices for crops, crop market thrives and vice versa.
Availability of subsidies
Subsidies affect crop marketing. The US government pays subsidies to crop farmers who specialize with soy and corn farming. This is because of a federal agricultural policy that is based on crop and agricultural mass production. It is believed that mass production leads to a better economy by keeping the prices of farm produce lower.
In theory, the policy actually provides crop farmers with a good measure for economic stability. On the other hand, it enables consumers to pay enjoy affordable prices when buying different crops. It also encourages farmers to create oversupply especially on narrow crops. This is because they make more money by growing such foods regardless of prevailing crop market prices.
Economic factors generally affect pricing of crop produce and crop marketing. Favorable factors leads to great pricing and a good crop market.
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