Challenges Facing Rice Exporters In International Trade

Trade Barriers and Regulations

Discuss about the Development and Evaluation of Evidence.

Rice is one of the most preferred stable foods in a global context. Most farmers especially in Asia continent practice rice farming for purposes of commercial purpose. Rice is also exported in various part of the world. Asia continent act as the main producer and consumer of rice commodity. China and India are the main exporters of rice commodity. Comparing the total annual production, only about 6-7% of the rice commodity is traded annually in a global context. Rice exporters face numerous challenges that incorporate trade barriers (Ha, Nguyen, Kompas, Che. and Trinh, 2015). They include various government regulations, custom clearance and product inspection. These problems act has extensively diminished the ability of exporters to freely conduct their business activity at a global context. Many policies are formulated in many parts of the world although they are irrelevant in many countries.  In order to accommodate an enhancing a fair trade, most exporters accommodate various measures and enhance trade liberalization to cope up with incidences of currency fluctuations. The research below will consider the exporter practices that can be incorporated in order to avoid the existing barriers of rice in the international trade.

There exist numerous trade barriers in many countries around the World.  The restrictions are incorporated by both developed and undeveloped countries. They include the import tariffs, import quantity and customs taxes (Baldwin, 2016). Some countries also formulate some restriction policies that include currency fluctuations, deficiency in terms of payment and incorporation of input subsidies.  Recent research by World economic forum shows that protectionism policy is incorporated in most developing nations. The forum uses the country average international tariff burden for purposes of measuring the custom duties imposed to imports of various commodities. Research conducted by USDA shows that Japan is one of the countries that impose high trade restriction on rice commodity. The current structures of imports and exports can be significantly affected by the global liberalization which leads to rapid increase of rice commodity price.

The main purpose of the project is to look at the market sector of rice commodity and the enacted policies of rice exporters. The research also incorporates the discussion of variance of money that can accommodate fare price of rice commodity. The study will give some significance the export of rice in the international trade and the impacts arising as a result of various existing market barriers and trade restrictions. The study will also incorporate the existing currency fluctuations that diminish the ability of rice exporters to participate in a fair market structure.

Rice Market Sector and Exporter Practices

The study aims at enhancing the good relationship of the custom authorities of rice exporters and the country of imports. Involvement of custom authorities should be enhanced in both the country of imports and the exporting country. Rice traders should also be enhanced with a comparative advantage.

Rice is one of the most vast consumed food commodities in many continents with Asia continent leading in terms of production and consumption. Research conducted shows that out of the 76% of the rice exported are mainly consumed by Asia continent (Adebayo Oluwakemi and Omodele, 2015) Constant rise of rice price has been observed in recent times because most exporters fear incidences of rice commodity shortage. The total production of the rice commodity in the global context does not favor the   international trade. The leading producers of rice commodity include China, India, Thailand, Pakistan and Vietnam as they produce more than 50% of the total export.

Pakistan has a comparative advantage over other Asian countries as it is located in a strategic place where it trades its rice and dominates over other competitors (Bishwajit, Ghosh and Peneluppi, 2017). Pakistan economy is dominated by staple rice commodity (Settle, 2016). The country is highly attributed in determining the foreign exchange earnings. The country experience delays of data delivery because the rice production incorporate manually generated statistics as well as its labor intensity. Due to incorporation of extrapolating results from collected samples, the data obtained appear to be anomalous after through cross examination. Existence of such hindrances poses a great threat when it comes to designing strategic food security and a favoring rice production system.

Rice is also the main subsistence food consumed in India making it secure in terms of food security of over half of the total World population. The government of India has established various protection measures in the agricultural sector in order to cater for rapid food shortages that occur frequently (Singh, 2017). Inflation level has rapidly increased as a result of unstable increase of prices of rice commodity. The Indian authority banned the non- basmati rice in the year 2000 and also imposed the export taxation of the rice variety with the aim of reducing the local rates and increase the countries domestic supplies (Grover, 2017). This policy restricted the total amount of rice exported out of the country. There occur various theoretical measures of price as a result of imposition of export restrictions and trade tariffs in any given territory. Looking at the India context, the fluctuations of the local paddy prices will affect the producers while the high imposition of global prices will favor the rice producers. The monopoly power of India economy had a high expectation of enhancing the national economy as a result of enacting some of these trade policies. Thailand and Indonesia also incorporated the India policy and these resulted in increased level of rice prices at the global level.

Currency Fluctuations and Impacts

Bangladesh government has worked in a manner likely to suggest that it emphasis on giving priority of price stability of the rice commodity. About 75% of the total arable land is meant to produce the rice commodity (Barrow, 2016.). This enhances a total consumption of than 50% of the intake of carbohydrates per person. The country also is the 4^th leading producer of rice commodity in the World although its total supply doesn’t meet the demand of the rice consumption. Incidences of unstable price is facilitated the alternating movement of supply and demand. The public food distribution system is also another contributing factor that affects the unstable price of rice.  The stock behaviors and seasonality in terms of rice production some of the other contributing factors to the high demand of rice commodity.

The Pakistan government has also united the trading systems in the global context so as to enhance the comparative advantage over regional countries to ensure a progressive liberalization. The country has the ability to expand its market share as it is enhanced with the ability of meeting the international demands in terms of quality rice commodity that ensure standard safety (Saitone, and Sexton, 2017). Accommodation of technical knowhow that incorporate the use of technological advancement in the agricultural sector can be enhanced so as to improve the overall rice production. There exist some underlying issues in Pakistan in terms of facilitating the essential resources that are required by the World Trade Organization for purposes of trading fairly in the international market. The exporters of rice commodity in Pakistan are required by the SPS to take appropriate measures. Various institutions in the country have also gone a step further and incorporated new systems that ensure quality assurance schemes. As a result the rice production input ha increased at a significant rate. This would accommodate the rice exporters with a comparative advantage over other Asian countries that export their rice commodity.

Research conducted also shows that many rice exporting countries incorporate the use of central agencies. China and Pakistan among other countries have some control over the central agencies that are incorporated to control their exported rice. United States of America do not have some dominant organization involved in controlling their rice commodity (Narula and Wahed, 2017). In the early 20^th century Thailand share more than a third while China which have a large share due to its high population.  More than ¾ of total exports found their way to Pakistan, China, US and Thailand.  ½ of the total global rice export conducted annually are enhanced by Pakistan, China and Thailand. Most countries that produce the rice commodity consume it domestically.

Comparison of Rice Exporting Countries

Vietnam is highly attributed to irrevocable export quota (Van, 2017). The last two decades have witnessed increased price of rice commodity in most developing countries. The main reasons that contribute to price inflation is due to trade liberalization, uncontrollable prices and devaluation which affect most poor families in terms of striving to facilitate the basic needs that incorporate accommodation of stable food (.Moody, 2017). Research conducted to obtain the effects of trade liberalization on the rice prices was enhanced by a spatial- equilibrium model. Results obtained show that the price would continue to hike if elimination of rice export quotas is incorporated.  Increase of price also ascertains that the levels of poverty of poor farmers will diminish at a significant rate. The main reason as to why the use of spatial- equilibrium is enhanced is to get a relevant notion of the constant change of rice prices.

Foreign exchange rates are important factors as they affect the global rice trade. This is because international prices are quoted in US currency. If the local currency of any rice exporting countries appreciate relatively as dollar, its export price will also increase and this would result in a weaken competition in the international trade (Samaniego, Vallejo and Martínez-Alier, 2017). On the other hand if the importing country’s currency appreciates relative to the dollar, the importation price (dollars) decreases and this has a comparative advantage to that particular country.

Compound Annual Growth Rate and Co?Efficient of Variation for Rice Exporting Country As Percentage of Total World Exports Of Rice.

country/year	*CAGR		#CV
	1991-2000	2001-2010	1991-2000	2001-2010
India	12.75	14.73	5.64	4.28
China	14.91	2.90	7.73	2.71
Indonesia	-58.98	12.17	20.35	20.65
Bangladesh	36.45	40.40	17.02	8.35
Vietnam	15.29	18.98	4.48	6.04
Thailand	5.02	17.74	1.99	5.42

Note: *CAGR? Compound Annual Growth Rate,    #CV? Co?efficient of Variation. 

The above table shows detailed information about the compound annual growth rate of rice production in various Asian countries. India was at 1.87 in the year 1991. In the year 2010 India had a higher CGR than China .the CAGR rice production in China was at 1.61% a higher amount recorded in India.  Indonesia share varied from 8.62 to 9.88 which show a significant upward trend. Rice production in Bangladesh had a sustainable growth rate in the two decades. The rice production in Vietnam has varied from a low level from 3.78% to 5.95% although it shows a continuous rise during the two decades. The same case is enhanced in Thailand as the production rate has increased during the two decades.

Production of Rice (Countries) for the Periods from 1991-2010 Linear regression analysis.

Country	Constant	Coefficient	t-value	p-value	R-square
India	-2279108529	1.202	3.3636	0.0035*	0.3860
China	53590159	6.690	0.1651	0.8707	0.0015
Indonesia	-1650507088	8.515	8.7593	0.0000*	0.8100
Bangladesh	-2408203877	1.241	14.7398	0.0000*	0.8100
Vietnam	-2047276441	1.039	22.9156	0.0000*	0.9669
Thailand	-1400358060	7.132	23.9690	0.0000*	0.9696
Pakistan	-435289632	2.21	6.5902	0.0000*	0.7070

The above table shows the correlation between the years of production. statistics of

Strategies for Enhancing Fair Trade

Bangladesh, Viet Nam, Thailand, Philippines and Pakistan are significantly positive and shows a 5% level of significance (P<0.05). It means that as year advances with increase in Corresponding production during the year. But a significant and negative correlation was observed between years of production in China. (P<0.05). Surprisingly, a non-significant correlation was seen between year of production and production in India and Indonesia at 5% level of Significance (p>0.05).

1. Constant rise of rice price in international trade have been observed in recent times in many rice producing countries.
2. Government policies impose some restriction on the amount of rice commodity exported out of the country.
3. Foreign exchange rates are affect the global rice trade

Participant’s observation enhanced collection and storage of field notes as well as analyzing the data exporters. Survey and sample collection was selected in adjacent rural towns of various countries of Asia. It was enhanced by a spatial- equilibrium model in order to obtain the effects of trade liberalization on the rice prices (.Jacoby, 2016). Relevant respondents were interviewed to determine their social economic status. Milled grains underwent some assessment of physical traits.

Analytical methods of mixed methods research was selected for its ability to provide completeness, explanation, unexpected results and illustration. Multiple choice and true/false survey questions were facilitated to the critical rice consumers, traders and producers.

The indicators were selected using expert judgment comprising a small panel of researchers. Limited time required to obtain appropriate process for indicators selection (.Santana and Stelfox, 2014). The shift of paddy fields might have a significant effect on the global rice system.

Rice trade liberalization has affected many producers as well as the traders. The research conducted believe that trade liberalization will bring a greater benefit to the rice producing countries (Bouët and Laborde, 2017). Poverty reduction can also be enhanced and this reduces the economic burden. Unfair trade practices can be enhanced by imposing policies that protect traders and subsidies.

References

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Baldwin, R., 2016. The World Trade Organization and the future of multilateralism. The Journal of Economic Perspectives, 30(1), pp.95-115.

Barrow, C.J., 2016. Water resources and agricultural development in the tropics. Routledge.

Bishwajit, G., Ghosh, S. and Peneluppi Jr, J.R., 2017. Dynamics of Grain Security in South Asia: Promoting Sustainability through Self?sufficiency. Sustainability Challenges in the Agrofood Sector, p.103.

Bouët, A. and Laborde Debucquet, D. eds., 2017. Agriculture, development, and the global trading system: 2000–2015. Intl Food Policy Res Inst.

Grover, R.K., 2017. Unit-10 Marketing, Price and Trade Policies. IGNOU.

Ha, P.V., Nguyen, H.T.M., Kompas, T., Che, T.N. and Trinh, B., 2015. Rice production, trade and the poor: regional effects of rice export policy on households in Vietnam. Journal of Agricultural Economics, 66(2), pp.280-307.

Jacoby, H.G., 2016. Food prices, wages, and welfare in rural India. Economic Inquiry, 54(1), pp.159-176.

Moody, P., 2017. Gravedigger’s Son. Sky Pony Press.

Narula, R. and Wahed, M.S., 2017. The Dominant Presence of MNES in Agro-Food GVCs: Implications for the Developing Countries. In Food Security and Sustainability (pp. 71-88). Springer International Publishing.

Saitone, T.L. and Sexton, R.J., 2017. Agri-food supply chain: evolution and performance with conflicting consumer and societal demands. European Review of Agricultural Economics, pp.1-24.

Samaniego, P., Vallejo, M.C. and Martínez-Alier, J., 2017. Commercial and biophysical deficits in South America, 1990–2013. Ecological Economics, 133, pp.62-73.

Santana, M.J. and Stelfox, H.T., 2014. Development and evaluation of evidence-informed quality indicators for adult injury care. Annals of surgery, 259(1), pp.186-192.

Settle, A.C., 2016. Locating financialization in a less-developed economy: Micro responses to liberalization and volatility in Pakistan. Competition & Change, 20(2), pp.106-121.

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Van, V.T.H., 2017. A monetary union for the ASEAN?-An empirical assessment.