Trends Affecting The Future Of Us Agricultural Trade

Running head: TRENDS AFFECTING THE FUTURE OF US AGRICULTURAL TRADE

Trends Affecting the Future of US Agricultural Trade

Sivakumar Veeraiyan

Baker College Center for Graduate Studies

CERTIFICATION OF AUTHORSHIP

BAKER COLLEGE

CENTER FOR GRADUATE STUDIES

On-Line Masters of Business Administration

Assignment for Course: BUS582, International Trade.

Submitted to: Dr. Joe Brandt

Submitted by: Sivakumar Veeraiyan

Location of Course: On-Line

Date of Course Meeting: 02/15/2007

Date of Submission: 03/28/2007

Title of Assignment: Trends Affecting the Future of US Agricultural Trade

Certification of authorship: I certify that I am the author of this paper and that any assistance I received in its preparation is fully acknowledged and disclosed in the paper. I have also cited any sources from which I used data, ideas or words, either quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course.

Student Signature: Sivakumar Veeraiyan

Table of Contents

CERTIFICATION OF AUTHORSHIP 2

Table of Contents 3

Abstract 4

Introduction 5

Method 7

Background 8

Trends 9

Crop genetic resources in-situ and ex-situ 9

Differentiation and identity preservation 11

World food demand 12

Discussion 13

Conclusion 16

References 18

Appendix 20

Figure 1 20

Figure 2 21

Figure 3 22

Abstract

The future outlook points to continued accelerated growth in the global number of hectares planted with biotechnology crops. Developing countries could benefit significantly from establishing partnerships with public and private sector organizations in both industrialized and advanced countries by increasing their utilization of biotechnology in their agricultural sector. The next decade of research in crops improved by biotechnology will include a major role for the rapidly increasing projects in Asia and Africa where food shortages are prevalent. Today, the United States has considerable investment and success in research and development of biotechnology agriculture. This article intends to discuss the future of U.S. agriculture in conservation of such genetic resources and Identity Preservation (IP) of genetically altered grains and seeds.

Trends Affecting the Future of US Agricultural Trade

Introduction

With strong economic growth and increasing demand for agricultural products, global agricultural trade is projected to rise incrementally throughout the next decade. Rapid expansion of ethanol and bio-diesel production in some countries is projected to have a significant impact on global demand for feed stocks, such as corn, vegetable oils and sugarcane and world price relationships. The growing economies of developing countries provide for a foundation for gains in demand for agricultural products and increase in trade. Traditional exporters of a wide range of agricultural commodities such as Argentina, Australia, Canada and the European Union will remain important in coming decade. But an increasing presence in export markets is expected from countries that are making significant investments in upper tier agricultural sectors, including Brazil, Russia, Ukraine and Kazakhstan.

High oil prices and increasing concerns over climate change are driving investment and innovation in the bio-fuels sector as countries and industry increasingly look towards renewable bio-energy to replace fossil fuels. Bill Gates, the world’s richest man, has recently invested $84 million in an American ethanol company. Global energy gluttons ranging from the United States to China are setting long-term targets for the switch to such fuels potentially offering a secure domestic source of renewable energy and fewer environmental headaches. The increasing demand for feed stocks used in production of bio fuels is expected to have a significant impact on agricultural markets over the coming decade (Butler, Rhett A., 2006). The future price of petroleum will be a key factor in the increase of feed stocks. Increasing energy costs have provided an incentive for many governments to encourage the production of petroleum substitutes for renewable agricultural crops. Increases or decrease in petroleum price will directly affect the commercial viability of petroleum substitutes.

The growing demand for agricultural crops also brings in concern regarding the quality of the crop produced and the new technologies that will be required to prevent diseases and increase overall crop production. Traditionally, farmers have relied on combinations of herbicides, insecticides, fertilizers and irrigated water to protect their crops and boost production. Each of these adds to the cost of the product, but they are necessary investments in order to meet production goals. In addition to the economic costs, these also may exact environmental costs in the damage they cause. Bio technology increases options for farmers.

Global acceptance of biotech crops increased in 2006, with global biotech crop acreage reaching 252 million acres in 22 countries according to the International Service for the Acquisition of Agri-biotech Applications (ISAAA). Global biotech crop acreage increased more than 13 percent from 2005, when 222 million acres of biotech crops were grown in 21 countries. A recent study by PG Economics found that biotech