Agricultural Subsidies and Development

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Agricultural Subsidies and Development

By | Feb. 2011
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Rich and developed countries are providing an abundance of subsidies that are depressing agriculture trade. By providing large subsidies to farmers, it causes farmer to create an excess. The excess gets thrown into the world market because it cannot be bought up in the home country. This excess then gets sold at very low prices that undercut other countries (usually third world countries) exports. This in turn causes other poorer countries to lose money and file complaints with the WTO. Observation & Analysis

The developed countries that are receiving subsidies have the ethical profile of survival because they are motivated by selfishness because they are doing what is most profitable for them regardless of how it may affect other countries’ economies. On the other hand, the poorer developing countries have the ethical profile of virtue because they are motivated by hope—that these countries would cut their subsidies soon so that all agriculture nations could grow. The combination of the survival and virtue profiles will cause frustration, anger and stress among the different groups of countries. This will surely be evident by the feelings that the developing countries have towards the developed one and will affect future business-dealings between the countries.

To assess the culture profile for the main stakeholders, we used a country from the European Union, France, as well as the United States (both being rich, developed nations) and compared their Hofstede dimensions with those of other countries that were mentioned in the case, South Africa and India (both were mentioned in the text as poorer developing countries that are negatively affected by subsidies). When comparing France and South Africa, the biggest difference in their cultural profile was their uncertainty avoidance index. France had an extremely high uncertainty avoidance meaning that they were very structured, while South Africa had a very low one meaning that they preferred...

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