Global Supply Chains and Commodity Dependence

Global Supply Chains

• The global supply chain connects countries trading agricultural products worldwide.
• Cacao beans from tropical areas like the Ivory Coast are processed into chocolate and shipped globally.
• Many agricultural products, including wheat, corn, soybeans, coffee, vanilla, bananas, and strawberries, rely on global supply chains.

Commodity Dependence

• Commodity dependence means a country's economy heavily relies on exporting cash crops.
• Madagascar, a periphery country, exports nearly two-thirds of the world's vanilla, contributing about 10% to its economy.
• High demand for a commodity benefits a dependent country; decreased demand or production problems (like droughts or diseases) can be harmful.

Imperialism and Neocolonialism

• Western and, especially, European powers built empires from the 15th to 20th centuries.
• Imperialist powers exploited colonies for raw materials used in their industries.
• Post-independence, many former colonies struggled to diversify their economies, remaining reliant on previous colonial exports.
• This created neocolonialism; former colonies still depend on Western nations economically and politically.

Factors Affecting Global Supply Chains

• Political Relationships:
  • Core countries often subsidize their farmers, making it hard for developing countries to compete.
  • Trade wars, like those between the US and China in 2018, disrupt global supply chains and can cause surpluses.
• Infrastructure:
  • Essential for global trade, including roads, bridges, and electricity.
  • Lack of infrastructure hinders agricultural trade and can lead to food shortages.
• Shifting Patterns of World Trade:
  • Semi-periphery countries like India are growing economically, increasing their global trade role.
  • The fair trade movement advocates for fair wages for farmers in developing countries.