Summary
More Companies join the Industry as a result of the liberalisation of the Agri-commodity sectors.Competition increases and the farmers benefit alot.More export revenue are earned.
Analysis
The Increase in the Competition for the Wheat industry is advantageous
to farmers in the industry and also to Australia as a country.
The barriers of entry were broken since the export arrangements were liberalised in 2008.
Companies with a well developed supply chain model embark on Growth
expansion potential to increase volumes where they are already
operating and also move into other geographic areas where there is
potential of increasing the Export volumes.
In the past years there were alot of government controls world wide are
before the liveralisation and this meant that monopolistic companies
were so many to the disadvantage of farmers who had no alternative to
sell their produce to.With the liberalisation of the export markets
more companies entered the operations increasing competition and
increase in the prices all to the farmers benefit.
International agri supply chain managers prefer to have a direct access
to the farm.This increases the profit pool for them and also create a
long lasting relationship with the farmers.This can only be done by
overcomming the trade barriers.
Other traders prefer to operate via cities and using local middle men
who normall operate in sea ports and capital cities.These dont get the
access to the farm gate and have no relatioship with farmers especially
if the economy is government controlled.
The decision to liberalise the export market increases competition due
to the increase in the number of companies,breaks all monopolistic
tendencies and increase demand,prices for the agri-products and benefit
the farmers.
In Australia this decision to break the barrier of entry has seen the
increment in the export volumes for wheat for example.The same can be
done for other agri-commodities.
Where there are so many players it develops the supply chain and increases the farmers relationship with companies.
Companies can also be able offer customised service to their clients
world wide by supplying graded products.organic certified produce,fair
trade certified produc and above all better quality produce since
they have direct contact with the growers.
Technological transfers are also possible as companies build on
successess in other countries where they are operating to introduce the
same in the new country.This in turn increases the employment
opportunities and also improve on the production efficiency.
Liberalisation of agricultural export markets attracts new
players,fosters technological transfer,creates more employment
opportunities.increases competition and above all demand for the
agri-produce to the benefit of the growers world wide
This has registered progress in Australia and i believe in other economies can do the same.
