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Europe’s New Herd Mentality

European farmers used to fight globalization. Now they are embracing it.
( summary of the article)

Not long ago, powerful farm lobbies-backed by the government of France –fought EU reforms designed to open up Europe’s regimented agricultural sector to greater market forces. Now, europe’s farmers see the rising profit, many of the same agro activists are getting richer as a result.
“European 50-year-old subsidy system and market forces were very perverse’ says Luc Morelon spokesman for Brittany based- Lactalis, europe’s biggest cheese and dairy product. As a result of this subsidy and protection european countries had tremendous excess production and they had sold at far below price on the world market.
In order to prevent this wasteful subsidies, politicsdid agreement among member states that total EU budget should not exceed 1% of the bloc’s total GDP.
The result of this entrepreneur decision european farmers are seeking out new international markets for their product. The farmers have an incentive to grow only what’s most profitable in other words they are shifting into areas where they can get the highest returns on the world market. As a result, EU exports are dropping rapidly in sugar, poultry, cereals and other raw goods but rising finished products like sausage and ham have helped Europe to become the biggest agricultural exporter. Now european milk is made into higher value cheese, a booming global market now that the growing middle classes of Asia, Russia and middle East. With its strong brands and efficiency supply chains, europe has expanded its share of the global cheese trade from 35-42% since 1999.
Of all the major agricultural powers – including the U.S and Brazil- the EU has become the least dependent on the sale bulk commodities.

Opinion

The first thought that came in my mind is I wonder why north east asia has no commision or union.Why not north east asian countries make an broad agreement not only for politic but also for international commerce like NAFTA or EU. Perhaps it,s because of two large countries’ beneficial aspects: China and Japan ? …
For mongolia , we have specialized much more in herding livestocks and making dairy products than any other business or industries. As well as our major export products are beef, cashmere, camel and sheep wool things like that almost all are belong to agricultural sector.
Also, our total import products are 48% from china, 20% from russia, 4 %from japan and 3% from korea, according to the statistic of the national trade commission.
Therefore I am reflecting is it possible for mongolia to create new strong agricultural brand with neighbor countries? …

Reference;
Business week magazine, 28 th of march, 2008