Impact of Importing
Firstly, it is important to understand what importing is. For the purpose of this essay, importing will be defined as acquiring food supplies from foreign countries or regions. It should be noted that importing is a decision that is made by a certain country to compensate for a lack of or shortage of a particular product. Further, it is also resorted to when there is a huge price disparity on local produce and the imported product.
Australia has been known to control importing to a certain level as there are a lot of local producers within the nation. However, with globalization setting itself in, the country has slowly embraced it too.
At a glance, importing looks really daunting to the economy of a nation as it creates more competition to the local producer. Looking at it more closely, it can actually bring in benefits to the economy as well. Here are three of the benefits: 1) It fills up the gap, 2) Save up on costs, 3) Brings in competition. Importing materials allows the country to achieve the standard of living that it envisions by filling in the gap on what they actually produce and what more they need to produce to
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For example, in terms of fuel, the country imports the volume of fuel that they need but can’t produce in the Middle Eastern countries in Asia. Secondly, sometimes it is cheaper to import than to produce. This happens because other countries may be more efficient production or have the raw materials handy to produce the product. Lastly, it may be beneficial because it prevents monopoly and creates competition between businesses which will bring higher product quality and cheaper prices.
Importing is a two-sided coin and has its disadvantages to the Agricultural sector and the Economy. On the Agricultural sector, the following are some of the disadvantages that it has: 1) It may bring in pest or other parasites to the local crops and 2) Creates imbalance in the local ecosystem. On the first one, imported food supplies may carry with them pests or other parasites that are not present in the local crops. Although the imported food supplies usually go through quarantine, we cannot discount the fact that there is a risk. Further, it may create an imbalance in the ecosystem because if certain crops are bought from overseas, farmers may not plant those crops because they can’t keep with the competition; hence, resulting to an imbalance in the ecosystem.
The negative impact of importing food supplies is much more felt by the Economics area than anywhere else. It is because it brings in the following: 1) Import may be more than Export, 2) Drives up unemployment rate, 3) Unstable Prices. Firstly, Importing decreases the potential for income of a country and it will increase its expenditures. This will have a negative impact of the Gross
Domestic Product (GDP). Further, it might drive unemployment rate because if the market would decide to buy the imported products than the local produce eventually the local farmers might stop production because there is no demand. When farmers lose jobs, there will be a trickle down effect to people who work in farms who will loose jobs too. This will increase the unemployment rate. Lastly, being dependent on imports lends a country’s economic position to instability because there may be currency fluctuations and it will affect the purchasing power.
After looking at the benefits and drawbacks of importing, it seems that has even though it has its drawbacks, it is something that is inevitable because of globalization. However, the key to importing food supplies is control. If Australia will be able to put and sustain stringent controls, importing may serve as leverage rather than a liability.