Globalised And Glocalised Production IB HL
Globalised Commercial Production Benefits Costs Producer • Ability to produce foods cheaply and at a uniform standard. • Increased air miles. • Higher input costs, especially fertilisers and oil. • Profit margins increasingly squeezed. Consumer • Cheap food available year round. • All types of products available year round. • Competition between producers keeps main costs down. • Increased costs are likely to be passed on to the consumer. • Indirect costs such as pollution control, eutrophication of streams, soil erosion, declining water quality. Local Economy • May be able to provide large amounts of a single product to a major TNC. • Specialisation allows intensification and increased production. • Undercuts local farmers who may quit farming. • Producers are vulnerable to changes in demand are at the mercy of TNC’s.
Glocalised Commercial Production Benefits Costs Producer • Increased market access and sales. • Possibly more farm-gate sales. • Increasing cost of oil makes costs of inputs higher. • Greater emphasis on quality make production less profitable. Consumer • • Fresh food. Local products “in season”. Reduced air miles. Smaller carbon footprint. • Higher cost of local farm products. • Less choice “out of season”. Local Economy • Improved local farming economy. • Cost of subsidies maintain farming: • Multiplier effects: Demand for Payments to encourage farming in fertilisers, vets, farm equipment. environmentally friendly ways.
Multinational Companies: India • There is a considerable impact of multinational companies on local agriculture in India. • Contract farming occurs when a company buys the entire crop of a large group of farmers. • Pepsi Foods controls around 1000 farmers in the state of Punjab. • In 1989 the company opened a factory to make a tomato paste for the Pizza Hut chain of restaurants around the world.
Multinational Companies: India • Local farmers were given interest free loans to buy foreign seeds and tools, and Pepsi buys the produce at fixed prices. • Pepsi foods makes potato crisps locally also. • Most food produced in India by these companies is sent abroad. • India is number 1 in the world for the production of fruit and vegetables but only uses 1% of it.
Activities • Using Geography For The IB Diploma P 228233, answer the following… 1. Analyse and explain the costs and benefits of Globalised and Glocalised Commercial Production. 2. What are the costs and benefits of TNC’s operating in host developing countries? 3. What are the reasons behind the rise of the Halal business? 4. What are the reasons behind the popularity of community-supported agricultural programmes?
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