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The Effects of Globalization on Food Supply Chains

If every country’s culture could be represented by a phone, globalization would be the phone line that connects those cultures. In National Geographic’s words, globalization can be defined as “the increasing connectedness and interdependence of world cultures and economies.” Since this connection manifests into a global economy, a variety of markets have been affected, bringing life to many countries in a financial sense. 

For one, a past report by the World Bank on the impacts of globalization shows that the growing trend is known to help improve global poverty levels and job insecurity by 24 percent. 

However, globalization hasn’t always positively impacted everyone, especially those in the global food supply chain, and all participating members should understand the nuance of a global economy. In particular, let’s focus on the food trade industry, how it’s been impacted by globalization, and how those within it can adapt to those impacts through technology

The Advantages of Globalization for the Food Supply

Globalization can positively impact various industries by:

  • Leveling playing fields with industry competitors;
  • Opening/creating new international communication channels;
  • Outsourcing customer service. 

While supply chains can also benefit from the above points, these aren’t the only advantages of globalization in the trade industry. 

Increased Availability of Food

According to a 2022 World Economic Forum article on the connection between globalization and food insecurity, globalization’s role in fighting world hunger is more important now than ever before. Having a global food supply chain with interconnecting channels creates an accommodating trading process for exported commodities. 

Popular export countries facing turmoil, especially those in wartime, still rely on the food trade industry to not only transport goods, but to receive them as well. 

For example, the same World Economic Forum article explored the supply chain impacts of a war-ridden Ukraine in 2022. Ukraine, just like plenty of other countries in the global supply chain, provides amenities to a variety of countries. To be specific, they provide up to 45% of the world’s seed oils. Ukraine’s economy relies on those, and other commodities, to create relationships with countries that are willing to trade goods with them in return — even in a time of crisis. 

Many countries have at least one precious good worth trading. Failure to recognize the value of other nations’ goods and refusing to accept their exports could deplete the food supply even more. 

Decreased Poverty and Hunger

While the current global famine rates are still tremendously high, they’ve decreased over the years as exportation continues to play a large role. As a result of the growing awareness of the importance of globalization, nations that once struggled with extreme poverty and hunger can receive aid from other nations that are able (and willing) to help. 

One of the main benefits of globalization, in general, is that it allows us to learn more about the true impact of the trade industry on the world around us. With globalization comes economic growth. The more economic growth a nation enjoys, the more they’re able to give back to those in need. Not only does this help reduce overall poverty levels, but it increases the kindness in humanity, too. 

Increased Efficiency and Yields

Of course, with the growing demand for exported goods comes the need to produce said goods. Generally speaking, food production and efficiency have gradually increased with globalization and continue to do so. 

An impactful article on the global food system details how our current food trade system is “the largest contributor to both environmental and humanitarian impacts.” To summarize, as long as there is a sufficient level of food and goods to produce, humanitarian impacts within the food system begin to balance out — the more food there is to produce, the more agriculture professionals we need to produce it. 

Sharing of Technology and Supplies

One of the last, but certainly not least notable benefits of globalization, is the amount of technical knowledge we’ve gained, shared, and expanded on over the decades. The global trade market has increased the universal availability of information and equipment, leading to increased efficiencies and economic opportunities. 

Emerging tech trends in agriculture like vertical farming, laser scarecrows, and farm management software, can be shared with like-minded individuals to optimize the production of exported goods. Even farm machinery and other specialized equipment can be shipped anywhere in the world to help with food production and maintenance — a concept that is remarkable to believe, considering where food supply chains first started decades ago. 

The Drawbacks of Globalization for the Food Supply

With every positive note, comes its downfall. The drawbacks addressed below cannot be ignored — for comprehending and adapting to them can make or break the success of your supply chain. Let’s dive deeper into the few downsides of globalization for the food trade industry. 

Unequal Gains from Trade

Although there are plenty of downsides of a supply chain that are difficult to prevent, there are others that are easier to prevent whether it be through policing or avoiding. There are a few unfair supply chain practices you should take note of and avoid:

  • Late payments;
  • Last-minute cancellations;
  • Refusal to make any contractual agreement;
  • Commercial espionage or retaliation from buyers;
  • Lost or soiled food items;
  • The abuse of trade secrets. 

All supply chains can benefit from avoiding the above unfair trading practices. However, there are still those who receive more benefits than others. Unfortunately, it isn’t uncommon to see more trade companies losing out on profit while others continue to advance in the global economy. 

For instance, those faced with food scarcity more than others are at risk of losing their place in the trade industry. This is because with food scarcity comes job scarcity — farm employers may leave when the business of one agricultural area slows down due to low food production. 

Expansion of Food Deserts

Medical News Today defines a food desert as “regions where people have limited access to healthful and affordable food.” Globalization in the food supply may contribute to these growing food deserts if the value of stocking nutritious foods isn’t acknowledged by more decision-making individuals in the trade industry. 

However, not all food deserts have historically been so. Some were once successful supply communities that were drained and couldn’t reproduce. If more supply chains saw the value in producing healthy and accessible foods at little to no cost, then we could see a decrease in the number of food deserts worldwide. 

Local Impacts from Intensive Production

Contrary to food deserts that produce little to no healthy food, some areas overproduce or engage in intensive production practices. At a glance, overproducing food may seem like a good struggle to have. After all, it’s better than producing none at all, but this is not the case. 

It’s important to understand how intensive production may be just as damaging to processes as no food production at all. Some communities that overproduce food under intense circumstances for the sake of the global market are at risk of multiple negative side effects including, but not limited to:

  • Environmental degradation;
  • Health impacts from chemicals used to mass-produce goods;
  • Loss of local food systems to cash crop replacements.

It’s also worth noting that not every community has a say in its role in the supply chain. This is yet another reason why creating more clear communication channels that allow for transparent conversations about the current state of some supply chains is vital. 

The more the inner machinations of the trade industry are understood, the better the chances of implementing safer and more rewarding production processes. 

Greater Risk of Foodborne Illness

Unfortunately, there is no food supply chain safe from foodborne illness, but luckily there is some certainty around the causes. According to the World Health Organization (WHO), this illness can be sourced back to, “eating food contaminated with bacteria, viruses, parasites, or chemical substances such as heavy metals.” 

Globalization poses a greater risk of housing these foodborne pathogens because of the heavy reliance on imported and exported goods. It’s easy to confirm the steps you took to avoid cross-contamination, but it can be more difficult to confirm these measures on other ends. 

Countries that rely heavily on imported goods are more susceptible to contracting these illnesses since they don’t have an option other than relying on the word of others to get ensure the safety of their food. 

Solutions for the Global Food Supply

Just as with any industry, the global food supply needs to work well with others to thrive in a scarce economy. Understanding both the positive and negative effects of globalization is a great start. However, more must be done if the supply chain as an entity wishes to remain a part of the economy’s greater good — not as a contributor to common worldly issues. 

With better education, land management practices, technology, and production opportunities in local areas — and access to better equipment with powerful engines — community members can come together to create an environment fit enough to supply food chains coast to coast.

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