Journal of Economics

The global agri-food system combines a highly diverse and numerous industries and subjects. Back in the mid XX century, such a union is involved in different place in the system of social reproduction, in a single system was of a few artificial and does not reflect the true nature of the relationship between the individual branches.

In the current context of growing globalization of world economy with an active impact on the agricultural sector scientific and technological progress and diffusion of these processes in the food sector, the tendency of vertical integration, it is quite legitimate to talk about the formation of a large technological system of food production on industrial type, consisting of major and supporting industries.

Economic, social raison d’être of the global food system and the functioning of the global food market can be formulated as simple – providing the world’s population with food necessary for human life.

Food, its production, distribution, exchange and consumption are an important part of the functioning of the global economic system, occupy a special place in the priorities of world politics.

It is directly connected with vital activity of the main subject and the object of world economic activity – and the people, including labor.

The main source of food in favor of agriculture. However, its share in the creation of world product fell from 9% in 1970 to 4,0% in 2004 Despite this reduction, the scope of the global economy is directly linked to the life of 2 / 5 world’s population. In 2004 it employed 47% of the economically active population. If the industrialized countries in agriculture with less than 5%, in developing countries – almost 60% of the working population, with Asian and African countries – more than 60%.

Main place of food production belongs to the developed countries. In the agricultural sector the main driving force and a result of the productive forces of all countries was the creation of the global food system.

World food and agricultural system (ITA) is formed as a result of the intensification of international cooperation and division of labor, interaction, and globalization of national commodity systems in the production and sale of food.

Its material basis is multi-food complex, typically comprising three functional areas:

1) production of capital goods;
2) agriculture, producing food staples;
3) processing and marketing of agricultural commodities and foodstuffs.

The main elements of CI:

1) international trade, covering all areas of the food complex, the export of capital and technologies associated with the development of agribusiness;

2) internationalization of research, education and management training;

3) organization and activities of transnational agreements and organizational structures that affect all aspects of the formation and functioning of the world food system;

4) a new element of the global food economy is a global information system and management decisions,improve performance and efficiency of world economic relations in the agribusiness sector.

Leading link ITA are the developed countries, because food complex of these countries foreign trade markets have become the main or leading factor in economic growth.

The experience of developed countries shows that effective demand for food is truly boundless: for achieving high consumption rates of physiological improvement is on the way the inclusion of marketing:

- All new plants and species;
- Broadening and deepening the range;
- Improving the “comfort” food (due to time-saving work in the household);
- Improvements in design and packaging;
and, finally, to market products that occupy an intermediate position between food and medication.

As a result, the cost of food continues to grow, although their share in total expenditure is gradually decreasing.

Accelerating economic development in developing countries makes them more active, though largely dependent on the developed countries, link the world agro-food system. At the same time, this bilateral relationship accelerates all aspects of the global food system. Developing countries themselves, seeking to overcome its backlog in food production and consumption, accelerates its economic development, including food systems. This not only leads to an increase in food imports, but also to imports, technology and human capital necessary for development of national food systems.

Transition economies (excluding China) belongs to a rather modest place in the global food system, but their role in some regions and in some markets quite significant. These countries are faced with basically the same problems that develop in their relationships with the global food system. This applies particularly to China, India and Indonesia. Common problems include: low efficiency of the economy, including food system, high dependence on food imports, resources for its production, foreign capital and loans, protectionism in relation to domestic producers, the imperfection or absence of elements of the market mechanism; shortcomings of public management techniques, etc.

The major direction of globalization, national food systems is an international trade as food (agricultural raw materials and bulk food products) and resources for its production, used in all spheres of national food systems.

Food trade has an important place in world merchandise trade. Although its share is gradually decreasing and now stands at about 14% of world exports, compared with 16% in 1995 and 35% in 1990. Globalization of the food system is manifested primarily in a rapidly expanding global food trade, compared with an increase in food production.

The globalization of agribusiness comes amid the global deployment of biotech revolution. Since 1995, started a mass market introduction of the three crop products using transgenic seeds (soybeans, cotton, corn).

Area sown with transgenic varieties of plants in North America increased from 1.6 million hectares in 1996 to 35 million in 2002, and in other countries around the world reached an estimated 5 million hectares. In subsequent years, to the mass introduction of new varieties of plants with modified technology and consumer characteristics.

However, the increasing globalization of various aspects of national economic activity, including in the food sector, and increases the overall riskiness of agribusiness. This is due to the expansion of the relationship is extremely diverse in the level and nature of the development of national systems of food. Hence the constant “disturbance” of the global food system due to any failure of its national or functional units. In connection with what we pass to the second question of the lecture.