Chapter 1: Problem statement
Are the three markets equally advantaged to process and trade food commodities subject to SPSs?
Which regions are vulnerable to SPSs?
What are the economic and social impacts of using SPSs in processed food trading within the member states of the chosen markets?
Are SPS measures genuinely effective?
Globalization revamped the implementation of trading concepts for mutual benefits. The trading concepts led to the emergence of agreements. Among them are the sanitary or phytosanitary measures (SPSs) and the TBT measures. The resulting effects of the SPS measures influence the production, processing, packaging, and distribution of processed food among other factors of production (Kotler, 2011). However, the impact of SPSs differs towards economic blocs, regions, and societies that are members in the World Trade Organization (WTO). The research proposal perceives SPS measures as non-trade barriers which establish scientific formalities and legal obligations to the subject member states. To that extend, the study will focus on the prevalence of differences in trading of processed food; hence, a comparative analysis is necessary to ascertain the impact of SPSs in US, EU, and ACP markets.
Background of the study
The proposed research will highlight SPS measures focus in the protection of plant, animal, and human lives through the implementation of sustainable remedies, and indicate whether the policies guarantee safety in the production course. From a critical perspective, the study will review the impact of SPSs in the international trading of processed food that introduces variations in export and import activities. Notably, the African Caribbean and Pacific (ACP) market comprises most of the least developed economies and developing economies. On the contrary, the EU interweaves a web of developed nations that inclines the unions position to compete with the US and other economic giants. Critically, the proposed study will analyze the 1995 treaty definition of the scientific and legal clauses, which extend to control the processing of food substances.
The treatys legal clauses thrive by issuing policies and directions to food safety. Comparatively, the proposed study will evaluate the results of these policies. Further, the research will review possible constraints imposed to the economic, socio-cultural, and technological factors. Hence, the research will check the level of efficiency in adaptation to SPS measures evokes comparative advantages to the competent member states of in the WTO. Because of the imbalance, trading of processed food products denotes a gradual increase of exports in finished goods from the developed nations. To that extend, the proposed study will evaluate the impact of the measures to developing and developed economies, which have been exporting inexpensive agricultural produce while importing expensive processed food.
Ideally, the proposed research seeks to highlight the SPS approach which engages the farmers in the use of manure sourced from animals and biologically developed growing and controlling means. In reality, the study anticipates that the method will enable the society to deviate from the consumption of food products grown under the utilization of chemical products for the benefit of all markets (Lockie & C.A.B. International, 2006). The prosed research will argue on the fact that the SPSs and organic farming technique is gaining momentum. With the use of quantitative and empirical research models, the study will implement marginal growth of the consumer populations since the year 2001 embraced the agricultural approach (Adams & Salois, 2010).
The research will acknowledge that the trend has been changing, and the revenues accrued from the produce sales stands at US$70 billion in current surveys. Therefore, organic agriculture continues to present abundant products to the global consumer markets, and it seems that the population is diverting from the use of chemically grown and processed farm products. The proposed research study will evaluate and assert on the production, marketing, and economic practices associated with the adoption of organic agricultural approaches.
Organic farming practices are converging into the application of several principles, which seem to ensure that the grown and marketed products suit the needs of the global consumers. For instance, the Principle of Health encompasses the farmers to execute their practices into producing the best agricultural goods without exposing the lives of the users to a series of risks. In the proposed study, a comparative analysis will be conducted to establish the impact of SPSs on animals and human consumers lives and the accrued benefits or health risks from the consumption.
Secondly, the proposal seeks to classify the Principle of Ecology dictates that the farming practices executed by the players, in turn serving to emulate and enhance the ecological systems and cycles towards a sustainable edge (Mayen, Balagtas, & Alexander, 2010). On the third account, the research study will review the SPSs Principle of Fairness, which sets organic agricultural standards above par through the implementation of terms and conditions to ensure the benefits are distributed to the environmental factors equitably. Lastly, it will check the Principle of Care beseeches the parties in the organic agricultural sector to execute precautionary and quality control practices, which exist for the benefit of the society, environment, and the future generations (Lal, 2011).
Purpose of the study
The proposed study on SPS measures seeks to analyze the effects that such policies have on the market trends of processed and organic agricultural products. Further, the study will review the dynamics which have been evident since the beginning of the Millennium. It will include the evidence accrued in in the U.S.A from the sales of processed food, and also natural agro-products of US$20 billion. The trend increasingly changed over the first decade to stand at $35 billion in 2011. However, other producers in ACP markets including South Africa, Australia, New Zealand and Japan face constraints in processing the organic food. Hence, the proposed research will check the market value of processed organic agricultural products, which is continuously increasing with the global community realizing the benefits.
Despite the changes, the proposed research will evaluate the impact of the implementation of SPSs in underdeveloped and developing economies within the ACP markets, and whether such has imposed retrogressive effects and even endangered food security. Currently, the SPS measures remain comparative advantages to US and EU markets where the consumption of organic and processed food is sustainable and discouraging to inorganic farming (Henson & Humphrey, 2010). The EU seems to be unifying approaches to pricing to determine the delivery of the best measures, which will ensure that farmers of the member states engage in organic agriculture practices (Blair, 2011).
The proposed study will acknowledge that members of the associations have been aiming to draw the global production and consumption to embrace a 100% use of organic products. Further, it will check the effectiveness of the SPSs influence in the reduction of taxes and funding of the products, which is propulsion to increase the demand for products. Ideally, the proposal reviews that the current situation of SPS measures is encouraging to organic agricultural practices. Hence, retail stores and other market intermediaries continually create shelf space for the processed products sourced from known farms (Klopcic & Kuipers, 2013). For instance, Tesco, Asda, and Morrisons are the leading retail chain stores for the purchase and sale of organic agricultural products.
In the U.S.A, Asda and Wal-Mart are competitive in establishing profound market shares in the natural food products sales segment (Chakrabarti, 2010). Precisely, the giant retail stores are remarkably influential to the segments produces since most of the consumers visit the shops with views of purchasing products and services of the best quality. For the processed food produce in ACP markets, the export trends seem sidelined terming the commodities as sourced in middle of nowhere.
Chapter 2: Objectives of the study
The proposed research will evaluate the members of the EU, ACP, and US markets comparative advantage in the production of food under the SPSs. Notably, the measures call for unified production, processing, and pricing approaches as these are serviceable to curbing the threats of overproduction, underproduction, and undervaluation of the organic agricultural products presented in the markets. The study seeks to understand the demand for the products, which seems to be rising whenever its supply is efficient, and it is unlikely that the demand will not change. The demand is high for the aging population of EU and US markets, which seeks to consume biologically developed and grown food products to avoid the risks associated with inorganic farming methods. The increased supply of the products in the US, UK, Japan, and other regions with a profound economic base is an indication that consumer awareness is stimulating the level of increased demand for the long-term benefits. The research will depict whether the SPSs influence growth in market segments for the processed food at an even rate for the EU, US, and ACP markets.
Further, the research will acknowledge that the EU has enforced a policy that seeks to establish a minimum price for the entire regional members hoping to adapt a realistic approach to the reduction of uncertainty for the member countries farmers (Kotler, 2011). The resolution seems to be appropriate since the internal population will be observant to ensure that the farmers engage in healthy, caring, and environmentally friendly practices, and the prices stipulated for the products compare reasonably with that enforced by the regional conventions (Klonsky & Greene, 2005). The use of a minimum price approach affects the demand and supply practices for organic agricultural goods. The proposed research will review the effects of the minimum price approach in the provision of the processed agricultural products presented by different farmers from various continents to the global markets.
Chapter 3: Research hypotheses
The proposed study will consider the obvious reason for the positive elasticity. Further, it will check the organic agricultural products demand that emanates from SPSs and the increasing awareness of the detrimen...
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