Trade without tariffs does not necessarily equate to free trade. UK businesses who trade with the European Union are learning this the hard way since the U.K. and EU signed the Trade and Cooperation Agreement (TCA) on 24 December 2020.
The EU operates as a single trading bloc, applying the same rules and processes EU-wide. By adhering to the same rules, EU based companies can sell and operate freely throughout the bloc, not only because there are no tariffs, but because the “non-tariff barriers”, such as customs declarations, mutual recognition of standards, veterinary equivalence, data adequacy, and financial services equivalence, are either non-existent or are relatively streamlined across all EU jurisdictions.
During the Brexit process, the UK made it clear that it did not intend to follow EU rules going forward, as “taking back control” of its own rules was the primary purpose of the project. Therefore, the TCA was signed in order to facilitate the UK’s divergence from EU rules, which is a novel approach to free trade negotiations.
In effect, the TCA did secure tariff-free access to the EU market (provided products meet specific rules to demonstrate origination in the UK or EU, known as Rules of Origin), but it also erected non-tariff barriers to trade.
TheTCA was signed in order to facilitate the UK’s divergence from EU rules, which is a novel approach to free trade negotiations.
Recent media reports have suggested that these non-tariff barriers are starting to bite UK SMEs. For instance, when UK goods are entering the EU, they must have accompanying paperwork to prove they comply with the Rules of Origin. Not only do customs declarations add time and cost to shipments, but some SMEs do not have the necessary registrations or in-house capabilities to complete the necessary paperwork and thus have to outsource the work, adding to the costs.
Additionally, goods that are of animal origin need to demonstrate compliance with EU laws on Sanitary and Phytosanitary Standards (SPS). Now that the UK has left the EU, specialist paperwork and frequent physical inspections are required for such products.
In response to these new barriers, a UK SME that used to sell to the EU prior to Brexit now has three options: 1) Stop selling to the EU; 2) Keep selling to the EU, shipping from the U.K. and navigating all the new barriers; or 3) Keep selling to the EU, but by setting up a distribution centre in the EU, and then shipping their products from there. With recent reports suggesting that callers to a UK government helpline for UK exporters were being encouraged to set up an establishment in the EU (which was subsequently denied), is this something that SMEs with customers in the EU should be considering seriously?
The appeal of such an option is likely to depend on the type of product SMEs are selling and the scale of their sales to the EU.
For instance, if the product being shipped requires the special SPS checks that require a veterinary certificate (which can cost over £100 each), then it could make sense for that producer to ship in bulk from the UK to an EU distribution centre, therefore minimising the cost and paperwork per item. Once the bulk order has entered the EU with all the required paperwork, it can move on from there with only onward shipping costs to consider, which may allow faster delivery of products to end users.
However, if the SME is producing a product that they know qualifies for tariff-free access, and does not require a SPS check, then it may make more sense to ship direct from the UK, especially if the volume they sell to the EU does not justify the expense and complication of setting up an EU-based distribution option.
When considering setting up a distribution centre in the EU, a UK business would have to weigh up the wider legal and tax implications of doing so, including compliance with EU consumer laws and complex rules surrounding VAT. This would certainly not be a step to be taken lightly.
Non-tariff barriers are the new reality for UK businesses. Once they have adapted to the current rules, UK businesses will have to keep an eye out for upcoming decisions from the EU (including regarding the adequacy and equivalency of applicable UK rules) that could affect their day-to-day operations, depending on where, and in which sector, they operate. Unfortunately, although businesses are looking for certainty, the TCA was just another step in the continuing process that is the new UK – EU relationship.
Melanie Wadsworth is a corporate partner based in Faegre Drinker’s London office. Melanie counsels clients through a wide range of compliance and transactional issues, including helping businesses with operations in the UK and the EU to navigate the legal implications of Brexit. London, +44 (0) 20 7450 4560 [email protected]
Christopher Jefferies is a trainee solicitor in Faegre Drinker’s London office. Chris helps advise clients on a broad range of Brexit related issues in commercial agreements and on structuring international data transfers and GDPR compliance post Brexit. London, +44 (0) 20 7450 4576 [email protected]
Greece is about breathtaking, olive tree-laced landscapes, breezy fishing hamlets, awe-inspiring sacred monuments, and enthralling museums. Who on earth wouldn’t like to visit this fascinating European country?
Are you visiting Greece for the first time? If so, you’d surely want to experience the finest mix of tourist places of this diverse Mediterranean land. For the utmost enjoyment, plan your Greece vacation between late April and early November, i.e. in sunny weather. Also if you are an alcohol lover don’t forget to get your favorite bottle of whiskey from a Liquor store for a perfect soothing Greece Trip.
Here are 5 places you must visit while vacationing in Greece:
1. Delphi
Providing an incredibly sacred site for God Apollo’s devotees, Delphi is full of fascinating, ancient temple ruins. This Greek religious sanctuary also contains the remains of recreational facilities like a gymnasium and a theater.
You can’t leave Delphi without visiting the Tholos, its most unique monument. A round-shaped structure having a vaulted roof held by a ring of pillars, Tholos is also known by the Greeks as a beehive tomb. Don’t expect to finish exploring Delphi’s stunning ruins in less than three hours! With an all-day ticket, you can also visit the museum situated below the archaeological site.
Besides admiring the ruins, there’s also more to do in this historic town. How about paragliding for a good thirty minutes over the ruins and admiring the scenic valley from high up in the sky?
Hike the countless trails in the surroundings of Delphi. You’ll get an unforgettable opportunity to walk some of the most ancient trails even today. For instance, won’t you love walking on Archaio Monopati, considered by many as the world’s oldest footpath?
2. Athens
Long being the country’s symbol, Athens, the capital city of Greece, is an exciting blend of age-old past and modern cool. Witness Athen’s 3000-year-old history through its impressive, neoclassical and Library.
The Acropolis, a historic citadel built on a rocky outcrop, is a must-visit! Appreciate the myriad of moods of this milky marble block while the sunlight shifts and the cloud shadows take over.
Visit the Pantheon, the most sacred monument of the Acropolis site, devoted to Athena, a Greek goddess. Also, don’t miss out on the Acropolis Museum, a collection of about three thousand artifacts belonging to the impressive citadel.
Experience the mob scene at the lively Monastiraki Square. You’ll find an interesting assortment of apparel stores, DVD sellers, street musicians, tourist shops, and street hawkers. On Sundays, Monastiraki becomes a buzzing flea market selling junk but really valuable stuff.
Relax in Anafiotika, a small, island village with utter white cube-shaped, flat-roofed houses having multicolored doors and window shutters. Drive around this small oasis, enjoying the unique sights of the Athenian forest and Lycabettus, the city’s tallest hill. Don’t forget to carry a foldable roof rack along so that later you can use it to protect your car from scorching sunlight and heavy showers.
If geology interests you, check out the cave-turned-lake of Vouliagmeni. This brackish-water lake also makes an excellent mineral spa known to heal several skin diseases.
3. Hydra
Remarkably noticeable due to its elegant beauty, the enchanting island of Hydra is a famous Greek getaway. A once-upon-a-time filming site of romantic Greek movies, Hydra has graceful stone mansions and a stunning waterfront.
A ban on cars and countless restaurants bordering Hydra’s main port further add to its quaint charm. Walk the port town’s winding narrow paths to feel this unique allure. Else, use boats or horses to explore the island.
Besides relaxing on some of the finest beaches like Vlichos and Bisti, make sure to visit Hydra’s leading museums also. The Byzantine Museum holds thousands of religious artifacts from the Byzantine or East Roman Empire. Then there’s the National Historical Museum dating back to Hydra’s days of maritime prosperity.
Enjoy fresh fish as well as regional delicacies at the island’s conventional, down-to-earth taverns. If you’re looking to party, Hydra has excellent bars and nightclubs situated close to the port. These promise all-night parties with lively music and tasty cocktails.
4. Santorini
Each year, this head-turner gets more than a million visitors! A splendid island destination, Santorini is the right choice for a dreamy holiday. This wonky, croissant-shaped Greek island boasts colorful, volcanic rock faces, whitewashed buildings, and pebbled volcanic beaches.
Besides offering gasp-inducing views of the caldera, Santorini promises unforgettable experiences of both sunrise and sunset. As for the beaches, make sure to explore Kamari for water sports and nightlife. Also, don’t miss out on the impressive Red Beach popular for its varicolored sand.
Visit stunning cliff-towns like Fira, also the island’s capital, and grab the umpteen photo opportunities. Jam-packed cafes and a variety of shops line the town’s main street, offering you countless options to eat and shop.
Pick up souvenirs and look for fine, handcrafted jewelry as you explore the shopping center here. You must also visit the famous Santorini Archaeological Museum. It has stuff from all over the isle, belonging to starkly different historical periods.
5. Meteora
A completely jaw-dropping, otherworldly place! Famous worldwide for its mountaintop centuries-old, Eastern Orthodox monasteries, Meteora is, in itself, a sky-high rock formation. This amazing region offers several adventure activities, including rock climbing, river-rafting, and horse riding.
Take the staircases or bridges up to visit active monasteries like Varlaam and Saint Stephen. Make sure to adhere to the dress code while visiting these sacred sites.
How about hiking up to the less-frequented, ruined monasteries? You’ll also love to explore Meteora’s countless caves that hold unique stories of hermit monks.
Do you enjoy eating mushrooms? If so, head straight to the small-sized Mushroom Museum. Out here, you’ll learn about the local varieties and can buy all kinds of food products made from mushrooms.
For instance, a combination of pasta and mushrooms, or milk chocolate combined with mushrooms. After the museum visit, indulge in a sumptuous meal starring mushrooms alone at the Neromilos Restaurant.
Conclusion
So, now you know which places in Greece to visit for an entire Greek experience. Get set for a splendid Mediterranean escape!
It takes a lot of guts and grit to build a foundation for your business and achieve the growth you desire. Training yourself on effective sales techniques can prop your business and spur your growth, both online and offline. As a sales entrepreneur, you need crystal clear processes that most effectively take buyers through the sales funnel.
The most successful sales associates refine their techniques through trial and error throughout their careers. However, there are two primary sales techniques that every entrepreneur needs to grasp early on to be successful.
Effective Cold Calling
Meaning to solicit to prospects who haven’t expressed any interest in buying from you, cold calling is an important approach for entrepreneurs. When launching your business, very few people know your company, products, or services. It makes sense, then, that cold calling will most likely be the first technique you will use to build up your customer base.
Pitching to a stranger who has never heard of your company or is blind to your products/services is one of the toughest challenges an entrepreneur may ever have to face in their journey. Yet, cold calling has stood the test of time as one of the most successful sales techniques. Most sales training online will include at least one module focused on cold calling.
Unfortunately for the sales rep, potential customers tend to hate unsolicited intrusions. To increase your chances of success in cold calling:
Focus on building rapport rather than making an immediate sale.
Use questions to paint a picture, matching your offers with the prospects’ needs.
Follow sales scripts and slides like someone who cares. Using your scripts as a basis but focusing on being engaging and personable is a more effective approach for keeping potential customers interested. Personality is often more important than being word-perfect.
Schedule your calls to times when prospects are more likely to speak with you. For instance, Monday mornings may not be the best time as people are busy setting up their weekly schedules. Wednesday and Thursday mornings work better since people have settled into their work week and the rush for the weekend is yet to begin.
Don’t waste anyone’s time, including your own. Train yourself and your staff to qualify and disqualify leads early.
Overcoming Objections
There’s a story about Donald, a farmer whose tractor broke down during the busy farming season. Immediately, he decided to walk three miles to his neighbor, Jackson, to borrow their tractor for a few hours.
After the first mile, Donald started worrying about whether Jackson’s tractor will be available. “Maybe Jackson won’t be willing to lend it to me if he needs it himself,” he mused.
After the second mile, Donald worried even more about how Jackson’s tractor is worth lots of money. “He may not trust me with it, especially since I crashed my own,” ran his thoughts. On the third mile, Donald now worried whether Jackson even liked him. “I bumped into him in the market last week and he barely acknowledged me. I doubt he likes me, and he surely won’t lend me that tractor.”
So when he rang the bell and Jackson opened, Donald blurted out, with eyes bulging, “You can take your damn tractor and drive yourself off a cliff!”
The lesson for sales associates is that while it’s important to anticipate objections, don’t let self-doubt lose you an opportunity. Instead, envision how you will overcome any client objections that arise. What new entrepreneurs quickly learn is that people can often be cynics. Many prospects will express doubts and will question your accuracy, legitimacy, and motivations.
An effective online sales training technique is to anticipate and prepare for your prospects’ objections. Plan how you will ease your prospect’s fears and ward off their cynicism before they get in the way of your sale. Don’t give in to your own cynicism.
Reframing Objections
With experience, you learn that objections can signal a prospect is connected, but far from persuaded. If a prospect indicates they’re not ready to buy, don’t be discouraged. Instead:
Be all ears and listen fully to the objection. Avoid making assumptions and do not react defensively.
Understand the underlying issues. Ask questions to clarify and restate the prospect’s response to confirm that you’re on the same page.
Address the most important objection first and do your best to resolve the prospect’s issues fast.
After addressing objections, check with the prospect that you’ve satisfied all their concerns.
In Closing
The two sales techniques of cold calling and overcoming objections work hand in hand, especially during the early stages of your entrepreneurial journey. While online sales training can equip you with the right knowledge, experience will be the ultimate determinant of whether you succeed or fail.
Most businesspeople use VPS service as a high-quality hosting can contribute to business success. Aren’t you among them yet? Don’t waste time and choose a VPS provider that can meet your personal requirements. VPS hosting is a popular and cost-effective option nowadays. You can have full control over your business project with VPS help.
Host-world.com is one of the best VPS services that offers many great features. They are dependable and have servers in 17 countries. You will find the necessary location not far from your headquarters without any problems. It is just one of the benefits you will enjoy. One of the features that make Host-world. com popular in the market today is the 99.9% uptime value. Are you interested in Host-world.com virtual hosting and want to learn more about it? Check the detailed unbiased VPS hosting review for you to make a well-informed decision on whether you should buy Host-world hosting or look further.
Host-World.com Pricing Policy: How Much Will It Cost You?
Do you want your website to be online round-the-clock? It isn’t a problem for a Host-world company that offers both a dedicated server and VPS hosting services. If you want to save money, Host-world.com/VPS is exactly what you need. The initial monthly cost is 6 Euro while the maximum cost per month is 100 Euro. If you compare the price with the cost of a dedicated server, you will see that it is much cheaper. What is the cheapest option? You will pay the lowest price if you choose the KVM VPS plan with 2 GB of RAM and disk space (30 GB).
If these characteristics can’t meet your business project needs, you can get the package with 300 GB disk space, RAM (16 GB), and bandwidth (100 Mbit). The company Host-world offers various VPS options for different types of businesses. You will find the VPS plan that will fit your individual requirements best. You can choose the way of payment and the billing cycle. The pricing policy is flexible here. You can pay every month or quarter. Also, annual and semi-annual VPS plans are available.
Host-World. Com VPS: How User-Friendly Is It?
Have you never used Russia VPS hosting before? You won’t face any problems with the setup if you choose Host-world.com. You can manage your project and have full control over all the activities. Choose the location and other important settings to enjoy the best performance of your business project. The hosting is reliable and 100% secure. Pay attention to the configurable options, among which are not only locations, but also IP addresses, and many other useful features. There is a convenient control panel that makes it easy to manage everything spending minimum time and effort.
BlueVPS Review: Customer Support
It’s very important to know that you can rely on customer support, ask questions any time, and get instant answers. What about the effectiveness of Host-world.com customer support? Specialists will come to the rescue if you face any technical problem. If you have no idea how to set up a domain or face any other unexpected problem, don’t hesitate to contact customer support via a live chat option. You will get the answer within 10 seconds. Have you faced a technical problem you can’t deal with on your own? The maximum response time is 10 minutes.
The good news is that the customer support is multilingual. So, don’t worry that you may have difficulties understanding something. Experts will provide you with step-by-step instructions on how to cope with the situation you have faced. You can contact customer support online during business hours or round-the-clock by submitting a ticket for help. You can share the screenshot with the problem to avoid any misunderstandings. Technical specialists do their work properly. You can check the customer support work before you pay for the VPS plan to make sure by yourself that it is really helpful.
Is Host-World VPS a Good Choice for You?
“Should I buy Host-World VPS?” No doubt that it is worth your hard-earned money. You will get many advantages at an affordable price. The provider offers useful features at a competitive cost and makes it possible to choose a billing plan. There is more than one VPS plan to get. Everyone will find the plan that will fit his/her individual needs and budget best. It doesn’t matter whether your project is small or it is growing fast, Host-world.com VPS providers will be able to meet your expectations.
You can be sure that you won’t face any problems with the setup or performance of Host-World VPS. It is a good solution for small and large projects as it offers top-quality hosting solutions and has many servers worldwide. Don’t look further if you are searching for fast and flawless performance. You can rely on this hosting provider’s customer support 24/7. Even if you face any technical problems, experts will come to the rescue in the blink of an eye.
Hope the review will be useful to those who are searching for the best price-quality ratio. Share your experience if you have already used hosting services from this provider.
2020 was a year of tremendous change for just about every aspect of life in the UK. The way we work, the way we play, the way we shop: they all had to adapt suddenly, the moment lockdown measures were implemented for the first time in March 2020.
With high streets and shopping centres forced to close their doors, shoppers had to turn to online vendors to meet their needs. The Office for National Statistics (ONS) October 2020 retail sales publication reported: “online sales reaching higher than usual levels over the course of the pandemic”. Online purchases represented 28.5% of total sales in October compared with 20.1% in February.
According to the polling, almost half a million (that’s 468,371) new businesses were registered in 2020. Of these, 22,011 were to be found in the retail sales sector, which led the field overall. Some of the other popular sectors were there to support to surge in e-commerce: road-based freight transport was among the other high-performing sectors, with 10,848 new businesses.
Mergers aplenty
Part of the shift to online have been high-profile acquisitions, like Boohoo’s purchase of Dorothy Perkins, Wallis and Burton. That deal, crucially, did not include the 214 physical stores, which suggests that all of the customer-facing jobs in the company are at risk. This comes hot on the heels of the online giant’s purchase of Debenhams, under the same conditions, and the purchase of Topshop, Topman and Miss Selfridge by Asos.
All of this is just the more visible part of a colossal readjustment on the high street. When we all eventually emerge, bleary-eyed, from our bunkers, we’ll find ourselves confronted with a high street that’s almost unrecognisable from the one we remember.
What’s next?
The soaring rate of unemployment in the UK is most heavily concentrated in the retail sales sector. Thus, it should come as no surprise that plenty of the new jobs are to be found there. If you’ve been laid off, after all, then you’ll probably look to create a new venture that leverages the skills you already have.
Sure enough, instant print’s research indicates that the boom for new business is likely to persist well into 2021. 18% of adults in the UK have ‘firm’ plans to start up a new business; 29% are merely ‘considering’ doing so. The trend toward e-sales, therefore, looks like it’ll persist long into the future.
Trading requires knowledge and the ability to make wise decisions. One of the many difficulties traders encounter is with utilizing the candlestick chart.
Candlesticks are used as indicators and are a great help for traders to up their trading deals. Different types of strategies are continuously developing to help traders use candlesticks for their benefit. One of the most known strategies is the Heiken Ashi.
What Is Heiken Ashi?
Heiken Ashi, or sometimes called Heikin Ashi, is a technique or strategy used for trading. It is sometimes referred to as Heiken Ashi candles, Heiken Ashi technique, and Heiken Ashi indicator by different traders.
Literally meaning “average bar” in Japanese, Heiken Ashi is used with the candlestick charts. No matter the name, its purpose remains the same. It is an indicator and a tool that represents and visualizes the market price data in charts. Utilizing this technique, market trend signals are quickly identified, and the chart can forecast price movements.
Why Use Heiken Ashi?
Heiken Ashi poses many benefits for all traders. It can help them in gaining more trading opportunities and earn more. Benefits of Heiken Ashi include:
The Heiken Ashi is just another form or method of looking at candlestick charts that traders can use for detecting trading opportunities. The Heiken Ashi displays the prices differently from the other candlestick charts and makes it easier for traders to identify trends correctly.
Formula
Since the Heiken Ashi is technically used to smoothen out the market and remove market noise, it is an excellent indicator as it makes reading charts easier, and that’s why it requires a formula.
The Heiken Ashi uses a COHL formula that stands for Close, Open, High, and Low. These are components that affect the shape, size, and direction of the bars on the chart. The formulas for each component are shown below:
Close (indicates the average price of the current bar) = (Open + High + Low + Close) / 4
Open (indicates the average of the previous bar) = (Open of the Previous + Close of the Previous) / 2
High = highest value of the recent high, open, and close
Low = lowest value of the recent low, open, and close
Data obtained can be of various timeframes, which will then have a significant impact on the shape of the graph.
Constructing the Chart
The Heiken Ashi Chart is constructed the same way as the regular candlestick charts. Heiken Ashi chart candles use the color red and green to indicate trends. Red during the downtrend and green for the uptrend. The change in trend can be observed whenever there’s a change in color with the Heiken Ashi candles.
It also shows some differences with traditional candlestick charts. Such as how smooth it looks and how it displays a clearer picture of the fluctuation of prices. The Heiken Ashi chart has smoother displays compared to other charts since it uses average values. It also has successive bars of the same color, making it more straightforward and transparent to determine price movements.
Heiken Ashi Signals
The Heiken Ashi reflects what trends are prevalent in the market using indicator signals, and it has two main factors: trend strength and trend reversal.
Trend Strength
The first factor is measuring the strength of the trend. Small consolidations and corrections are hardly visible on the chart due to the indicator’s smoothing effect. That’s why when trading with the Heiken Ashi technique, it is best to use a trailing stop. The trailing stop will widen the rewards of trading within the trend.
Traders are highly recommended to stay in the trade if the trend is strong to benefit from it. Below are the different kinds of Heiken Ashi trends:
Bullish Trend. Consecutive green candlesticks show a strong uptrend signal without lower shadows.
Bearish Trend. This is the opposite of the Bullish Trend. Consecutive red candlesticks show a strong downtrend signal without upper wicks.
There are three types of triangles: ascending, descending, and symmetrical triangles.
If the indicator breaks above the upper borderline of the ascending or symmetrical triangle, the upper trend will continue. If the candles fall below the bottom line of the descending triangle, the downtrend will strengthen.
Trend Reversal
This signal helps traders in determining if it’s time to exit a previous trend-following trade and enter a new trend. It allows traders to avoid losses and enter a new trade immediately.
Doji Candlestick. It has a small body and long shadow, and it signals if there are uncertainties in the market. And with Heiken Ashi, it signals a trend reversal.
Wedges. Wedges are like triangles, and there two types of wedges, rising and falling. Rising wedges require traders to wait until the candlestick breaks below the indicator’s bottom line. Falling wedges require traders to wait for the price to break above the upper line, and the downtrend will reverse.
With its growing market, a wide range of industries, and blooming spending power, China is no doubt a top choice for a Canadian seeking to invest offshore. However, it is important to take a closer look and understand the available opportunities before setting off to incorporate a business in China as a Canadian entrepreneur.
This post highlights the top three investment opportunities that you should consider as a Canadian. However, before we get to the list of the three sectors, it is important that we briefly analyse the advantages of Canadian investors and businessmen looking to invest in China.
Why Investing in China is a Great Option for Investors?
In recent years, China has experienced vast economic growth. It has also created wealth for foreign investors in different sectors, ranging from manufacturing to IT services. With the world’s largest skilled population, easy business norms, and low taxation policies, China is emerging as one of the world’s largest markets for FDI investments.
There is a reason why businessmen in countries like the United States, Australia, United Kingdom and others have shifted their manufacturing facilities to China. They have been able to drastically bring down the costs of-
Raw materials
Labour costs
Business overheads
Electricity and power consumption charges
Undue interference from governmental authorities
All this means that in addition to the money factor, businessmen have been able to heavily save on time, energy and effort. It also means that they have been able to expand business operations to other growing markets in Asia, including Thailand, Indonesia, India and others.
List of the Three Major Investment Sectors that can deliver Strong Results for Investors
1. Agri-Food and Consumer Goods
The potential of agri-food and consumer goods niches are correlated to the fast growth of the middle class in China. Today, China’s consumer tastes are becoming more complicated with a strong bias to premium offerings.
As you work on the details for company registration in China, you need to appreciate that the lower segment is pretty overcrowded with a lot of local products. Therefore, consider introducing high-quality products and market them as premium products.
When drawing your strategy, it is also crucial to think about China’s e-commerce market. It is one of the largest in the world, accounting for over 40% of the total e-commerce spending on the globe. Therefore, it will be a great idea to leverage e-commerce platforms to reach more Chinese.
2. Automotive Industry
China has one of the largest automotive industries in the world. Indeed, all Original Equipment Manufacturers (OEMs), from Toyota to Ford, have some presence in China.
So, if you are already selling to any of the OEMs back in Canada or in another country, it will be a good idea to consider doing business in China.
Today, there is a huge push for electric vehicles to address the problem of air pollution. Therefore, there is heavy research & development in areas such as connectivity, autonomous driving, and smart vehicles. Canada possesses strengths in these areas and a focus into the niche would be a great idea for your business.
3. Gas and Oil Technology Services
In 2019, China surpassed the US as the largest oil importer. To address the serious problem of pollution, China is promoting the use of gas as an alternative source of fuel. Again, China has well-established supply chains in areas of clean energy, and you can thrive as a service provider or equipment supplier.
To grow faster, it is advisable to avoid direct competition with local equipment manufacturers, but focus on working with them.
A number of the companies in the gas and oil firms actively source some of the parts and products abroad and resell in the market. So, if you can provide them with the products they want, they might prefer to source the products from your company in China instead of abroad.
The Bottom Line
If you are a Canadian entrepreneur, China is a land full of potential. Once you have identified the best opportunity, move to the next step, which is registering a company in China.
To make the process easier, faster, and more convenient, consider working with an agency. These are firms of experts that specialize in company registration and will also come in handy to help you during the early period of business establishment.
Bandung Conference (1955) in Indonesia was the first large meeting of leaders from newly independent countries from Asia and Africa, where a declaration was submitted, which included opposing colonial and neo-colonial policies, to improve cooperation among the newly independent countries. It was also said to improve the living conditions of their people by safeguarding economic sovereignty and raising agricultural output to avoid occurrences of famines, which killed millions of people in the pre-independence period (Siddiqui, 2020a; 2020b). However, the strategy adopted to raise agricultural output was through land distribution i.e. allocating land to the tillers. It aimed, firstly, to remove rural inequality and increase output and incomes of the rural poor. Secondly, by increasing rural incomes, it was intended to expand markets for industrial goods. In most of East Asia, such as Japan, South Korea, and Taiwan, and also in Vietnam and China, land was re-distributed to the tillers, which dramatically reduced rural inequality and increased agricultural outputs. Moreover, the state took a number of measures in the industrial sector both to encourage investments and joint-ventures, and also to encourage exports. As a result, these countries emerged as successful and economically powerful nations.
However, in contrast to East Asia, land reforms in South Asia and in Africa either did not take place or were incomplete. It did not make any dent on rural inequality. For instance, land reform measures in India only removed big urban-based absentee landowners and did not touch village-based big-landlords. (Siddiqui, 2019b) Thus, rural inequality continued and domestic markets for industrial goods remained sluggish. However, to increase food production in the late 1960s, a technological solution was initiated, where the government subsidised new agricultural inputs such as fertilizers, pesticides, power, and irrigation, which was known as the ‘green revolution’. By the early 1990s, these policies were exhausted and the farmers’ frustration rose to new heights. However, by 1991, the economic crisis deepened and the government had to borrow money from the International Monetary Fund (IMF) and accepted IMF conditionality by adopting a ‘Structural Adjustment Programme’ (SAP). This resulted in the gradual withdrawal of agricultural subsidies and which sharply increased input prices.
At present, Indian agriculture is facing a deep crisis and farmers’ distress and suicides have risen sharply since the early 1990s. Nearly thirty years have passed since the neoliberal reforms were launched in India, but until recently, inadequate attention was paid to the agricultural sector. The economic liberalisation first ignored agriculture and treated it as if it were just another industry. The policy framework for agriculture largely continued as laid out during the ‘Green Revolution’ i.e. it provided credit for investment in new technologies, and the output was purchased by the government via the Food Corporation of India (FCI) and sold through the Public Distribution System (PDS). Until recently this system served well to buy surplus foodgrains from agriculturally developed regions like Punjab, Haryana and western Uttar Pradesh, and distribute the output to food deficient regions like Bihar, Orissa, Madhya Pradesh and elsewhere in the country.
Indian agriculture is facing a deep crisis and farmers’ distress and suicides have risen sharply since the early 1990s. Nearly thirty years have passed since the neoliberal reforms were launched in India, but until recently, there inadequate attention was paid to the agricultural sector.
Internal pressures on state support for agriculture occurred at a time when there were more fundamental strains emerging in this sector. With a rising population and divisions of land between members of a family, farms became smaller. At the same time, the growth of manufacturing was very slow and employment opportunities stagnated in this sector due to advancements in technology and automisation. Services provided very few job opportunities and overall unemployment soared to a very high level. Since 1991, the services sector of the economy had begun to grow at a higher rate. As a result, the share of agriculture in the GDP had more than halved from 33% in 1991 to merely 13% in 2019. While on the other hand, still more than two-thirds of India’s population relied on agriculture for their livelihoods, which had not changed in the last thirty years. The recent ‘Farm Laws’ are the instruments that will open up agriculture to the market and corporatisation. Farmers also know from experience that if the international market could offer higher prices in some years, then the farmers will benefit, however, at a time of global foodgrains surplus, prices would crash. Without MSP (Marginal Support Prices) guaranteed by the government for their products, they would be left with large unsold stocks that would bankrupt them and increase their debts.
Therefore, the ‘New Farm’ laws brought by the BJP government constitute a major change favouring the entry of agro-business capitalism and that of increased centralised control of agriculture in India. The economic distress leads the overwhelming majority of farmers to suicide. Farm income has been dwindling over the past many years, and farmer debt has been increasing since 1991 (Siddiqui, 2014; 2018b). Furthermore, the de-regulated agricultural markets often raise problems related to uncertainty, equity, collusion, quality control, asymmetric information, contract enforcement and abuse of non-economic power, among other possible sources of so-called ‘market failure’.
Farmers shout slogans during their ‘Delhi Chalo’ protest march against the Centre’s new farm laws, at Singhu border on December 2, 2020 in New Delhi, India. (Sonu Mehta | Hindustan Times via Getty Images)
This study will also emphasise the importance of small-scale farms and the importance of food sovereignty in developing countries. In recent years, some big multinational companies bought land in poor countries, which could be environmentally destructive. We must learn from Central American experiences, where the US fruit companies took over lands to produce fruits and cash crops to be sold on US and European markets (Siddiqui, 1998). Several decades later, studies found that such policies did not benefit the local population, fewer jobs were created due to increased mechanisation, and a high level of use of fertilizers and pesticides has brought ecological and environmental problems to the region. Thus, the agrarian model pursued by the developed countries is capital-intensive and labour-saving, and is based on excessive use of chemical fertilizers and pesticides and average farm size is much larger than the developing countries. Such agrarian solutions are not viable and suitable for developing countries.
II. The Debate
In recent years in some developing countries, foreign companies have bought land and displaced local farmers to increase agricultural output. In the past, commercial farming has often opted for policies that were environmentally destructive and policies that undermined local farmers but largely benefited multinational agribusiness. This shows the rise of a global ‘corporate industrialised agriculture’, and indicates a ‘changing relationship to food imposed by the ‘industrialization of agricultural production and the globalization of agricultural trade’, resulting in ‘food insecurity, fossil-fuel dependence and global warming’.
The International Forum on ‘Food Sovereignty’ in 2007 in Mali was a very important policy discussion. The conference was represented by 500 academics and farmer leaders from 80 countries that discussed future polices and strategies to provide directions for farmer movements for the importance of food sovereignty and how to strengthen it. The Declaration of Nyéléni in Mali (2007) encapsulates the vision of the conference: “Food sovereignty is the right of peoples to appropriate food produced through ecologically and sustainable methods. It puts those who produce, distribute and consume food at the heart of food systems and policies rather than the demands of markets and corporations”.
Food sovereignty emphasizes ecologically appropriate production, consumption, and distribution with socio-economic justice and more reliance to local food systems as ways to solve problems of hunger and guarantee sustainable food security for all peoples. It empowers local community control of productive resources; argues for agrarian reform and tenure security for small farmers; promotes biodiversity; and respects the local knowledge of indigenous peoples in developing countries.
Food sovereignty emphasizes ecologically appropriate production, consumption, and distribution with socio-economic justice and more reliance on local food systems as ways to solve problems of hunger and guarantee sustainable food security for all peoples.
Increasing dependence on industrial food has reduced smallholder incomes in local markets, and seems to have served to undermine the viability and livelihood of small-scale farms. Such development has led to increased food import dependency and has also increased the consumption of unhealthy diets, such as fewer varieties of wheat, maize and rice, along with a range of highly processed foods. It has also increasingly displaced native food in favour of genetically modified crops. It has made a number of developing countries increasingly rely on food imports, which has an adverse impact on the balance of payments. The availability of cheap imported food is gradually destroying local food production because the local cost of production based on small farms is relatively higher than imported subsidised food from developed countries, and this is described as ‘food dumping’. This situation has led to small farmers abandoning farming and migrating to towns as unemployed and underemployed, who often settle in slums in big cities. Moreover, poorer countries are especially threatened by conditions they have done little to cause and could become still more dependent upon food imports from developed countries that are part of these countries’ extremely disproportionate contribution to climate change.
Food sovereignty is inherently a multidimensional concept. The only way to be a food sovereign is to improve food production and distribution, which should be linked to other sectors of the economy. Food sovereignty discourses should focus on food production, but the policy should strengthen food producers and consumers and facilitate making them truly sovereign, then both will have to be supported by and incorporated into a variety of social, economic and political policies related to the agriculture sector that go well beyond the food itself. In short, food sovereignty requires a healthy, sustainable and diverse rural economy that goes well beyond food production.
To understand the complex socio-economic situation of the peasantry, nearly a century ago in Russia, Chayanov presented the ‘theory of peasant economy’. Chayanov’s family household model in agriculture had focused on the internally generated needs and resources of the peasant family. According to him, the aim of peasant households is to meet the needs of (simple) reproduction while minimising ‘drudgery’ (of labour). His model of ‘peasant economy’ is centred on the organisation of ‘family labour’. On the other hand, the imperatives of reproduction in family labour enterprises mean that labour costs are discounted in adverse conditions, generating peasant ‘self-exploitation’. In effect, peasants tend to farm more intensively than capitalists, albeit at lower levels of labour productivity; similarly they are often constrained to buy or rent land at higher prices, and to sell their product at lower prices, than capitalist farmers are prepared to do. He assumed that the logic of a peasant economy (simple reproduction) excludes the capitalist imperative of accumulation for its own sake (expanded reproduction). Increasing dependence on industrial food has reduced smallholder incomes and seems to have served to undermine the viability and livelihood of small-scale family farms in the developing countries (Bernstein, 2009).
The agricultural sector in developing countries suffers from historical legacies that favoured the industrial sector, known as ‘urban-bias’. Policy-makers have contended that agriculture generates only limited backward and forward linkages and that development, therefore, necessarily means the rapid transition from rural economies to urban ones. Particular industries and urban areas were targeted for development while the farmers, especially small holders, were seen as sources of cheap labour, and the large land holders were seen as producers of raw materials and cheap food. The current agrarian crisis in rural areas has less to do with a rejection of farming per se than with a rejection of farming under the negative, insecure conditions fostered by ‘urban-bias’.
The commodity production in the full sense occurs when the product which is both a use-value and an exchange value for the buyer, is only an exchange value, just so much money, for the seller; which is determined by the market. But it leads to destruction of small farms by the corporate. The withdrawing of the state support that had prevented the destruction of small size farms by corporate capital, which will make them increasingly unviable and will further increase in farmer’s suicides. In fact, under commodity production in developing country like India, with the State not interfering in the functioning of the agricultural markets will bring enormous changes in the rural society and economy. Such as, it would open up Indian agriculture to the dictates of the world market. Moreover, the demand of the developed countries has risen for tropical crops and fruits, which means a diversion of land away from foodgrain production. This would further mean the country will become food-import dependent. So, when world food prices fall, the farmers’ debts will increase. Then many farmers will be forced migrate to cities in search of jobs, swelling the number of unemployed (Siddiqui, 2012a; 2017c).
A number of researchers have found that industrial agriculture is the biggest single contributor to a loss of biodiversity, and is profoundly shaped by contemporary capitalism, not least because only a handful of “commodity” species are deemed to have any value, and because, in the sole pursuit of profit and growth, “externalities” such as pollution and species loss are ignored. Agro-exporting systems leave rural populations increasingly deprived of land, and in developing countries, create an increasingly food dependent large population. The neoliberal policy of market deregulation across the world has intensified the marginalization of small farmers in developing countries. It has been found that the adverse impact of climate change is disproportionately felt by the poorest people in developing countries, who are contributing to it the least. Identifying these inequalities matters because inequality is endemic to capitalism (Siddiqui, 2019a).
However, neoclassical economists argue that to improve efficiency, the demise of the agriculture sector and in particular small farmers is seen as necessary for economic progress. However, this is fundamentally incorrect in the present era of global climate change, where sustainable agriculture is central to a new sustainable development paradigm. The neoclassical economists’ belief regarding the one-size-fits-all approach to measuring and understanding complex investment environment issues is very problematic, especially when based on the interests and priorities of particular institutions and powers.
We must then move into a new realm of creative thinking, collective democratic policy-making, respect for local and indigenous people’s knowledge and experiences, and involving them in long-term planning to develop ecologically friendly and sustainable agriculture. This is the only way to deal with the challenges that agriculture, economy, ecology and society currently face in developing countries.
The neoclassical economists’ solution to the contemporary environmental crisis is more market not less market. For this solution, there is a need to change the market-led economic policy to address the contemporary agricultural crisis. They see in monetary terms, and the loss of nature is very difficult to monetise. They favour using market prices for all these irreplaceable commodities. The contemporary corporate-led food regime, from the concentration of power in food chains to genetically modified seeds is consolidating global markets in the name of market freedoms and efficiency. The critique such as, Naomi Klein (2015), a Canadian author, notes: “The market has not and cannot fix the climate crisis but will instead make things worse, with ever more extreme and ecologically damaging extraction methods accompanied by the rampant disaster capitalism.”
In the world generally, there seems to be increased trade and capital liberalisation, (Siddiqui, 2020b; 2020c) especially in agricultural commodities, which means a greater amount of trade, and thus could result in a loss of biodiversity and environmental crisis. Reducing tariffs and removing domestic regulations against multinational companies could have a much wider impact on local economies, without foreign agro-companies sharing any responsibilities. It is viewed that due to access to more information, low wages, and relaxed environmental regulations, these global food companies would find it attractive to invest in agriculture in developing countries, as it increases their markets and profits.
III. The Issue of Food Sovereignty
There is a strong case that a new phase of global capitalism with new modalities of accumulation started to emerge for the last three decades which, among other things, changed inherited conceptions of the agrarian question centred on the ‘national’ paths of the development of capitalism in the countryside. The current globalisation and increased trade in agricultural commodities will have a longer lasting impact on developing countries. Under the WTO (World Trade Organization), trade liberalisation will create a shift in the global trade patterns of agricultural commodities, (Siddiqui, 2018d) and would affect the world market prices of agricultural commodities. (Siddiqui, 2019c; 2018a) This will lead to the increased involvement of global food companies in the developing countries which would focus on global consumers rather than local markets. Speculation in foodgrains will lead to increased ‘financialisation’ (Siddiqui, 2017d).
Under WTO pressure, the neoliberal reforms in developing countries, required to remove government subsidies and other forms of government support to small farmers in developing countries. This will reduce government investment and aid budgets for farming and will promote ‘export platforms’, especially of animal feeds and high-value commodities. This will lead to neglect of food production, and shortages will lead to increased food prices and will adversely affect food consumption and access to food for the poor. Moreover, the increasing concentration of global corporations in both agricultural inputs and agro-food industries, marked by mergers and acquisitions, and the economic power of fewer corporations commanding larger market shares, will reduce competition. In recent decades agricultural exports have increased sharply both in terms of value and volumes, as shown in Figure 1. The developed countries namely, the US and the European Union are among the world’s top agricultural export countries (See Figure 2). Moreover, the big corporations along commodity chains have increased their control from farming through processing and manufacturing to retail distribution. Such development will further encourage specialisation in the cultivation of fewer crops i.e. ‘monoculture’ and it will contribute to the loss of biodiversity.
The tendencies of capitalist agriculture, including the pace of technological change in farming with the increased use of chemicals, and in its upstream and downstream industries, is driven by the accumulation strategies of agricultural input and agro-food corporations. Large-scale mechanization, which has intensified production in the name of achieving economies of scale, and keeping food prices low, is booming. Such policies will lead to a sharp fall in small-scale family farming and a rise in rural unemployment. While the manufacturing sector is either stagnant or growing very slowly, and thus, unable to provide jobs, it will lead to increased joblessness and poverty. If half of a developing country’s population was pushed out of the countryside and into the cities to rely on cheap imported food, this could have a devastating long-term impact and could further destabilise many countries. This is a central threat running through the political economy of capitalism and agriculture with implications for food sovereignty.
The challenge of regulating multinational agribusiness and international trade is important in order to ‘protect’ ‘domestic food production’ and small farmers as ‘guardians of the commons’ and to support resistance to ‘land grabbing’ for commercial food farming, and mining. There can be serious contradictions between the key features of the food sovereignty vision, such as between the goals of national and local food self-sufficiency; between promoting food crops and a farmer’s freedom to choose to what extent to farm, which crops to grow, and how to grow them; between strengthening family farming and between collective and individual rights, especially over land ownership.
IV. The Importance of Food Self-Sufficiency
A dramatic rise in food prices in 2007-2008 shook the world out of its complacency. There was nearly a 40% rise in the food price index relative to 9% in 2006. Wheat prices almost quadrupled and maize prices almost tripled between 2000and 2008. The adverse effects of this price rise fell on foodgrain importing developing countries and on net buyers of foodgrains within countries.
In 2018, Asian farmers produced 90% of the world’s rice and around 40% of its wheat and total cereals. But most Asian countries consume what they produce – the exports come from only a few. For instance, although over 80% of rice exports came from Asia in 2018, the exporters were primarily Thailand, Vietnam, India and Pakistan and, beyond Asia, the US. Similarly, 85% of wheat exports came from only four regions – North America, Russia, the EU and Australia; and 81% of maize exports came from North America and Latin America especially Argentina and Brazil. Taking all cereal exports together, 65% came from North America and Europe (see Figure 3).
Foodgrain output and supplies will fall and prices rise, for example, if the exporting countries shift large areas earlier devoted to foodgrains to biofuels, or fail to control speculative hoarding. Adverse weather conditions can add to these negative effects. Such factors were important in the 2007-2008 price rises. In that year, almost 100 million tonnes, or 4.8% of all cereals produced, went into ethanol production. Thirty-three percent of the corn production in the US in 2008-2009 was similarly used. Facilitated especially by government subsidies for growing energy crops, the US farmers shifted large areas from soybean and wheat to maize for biofuel.
Seeing the vulnerability in global food production, the goal of food self-sufficiency for developing countries becomes extremely important. For instance, the government policy should aim at reducing vulnerabilities arising from the dependency on food imports. Many of the developing countries depend on food imports from developed countries, and only a few developing countries, to fulfil their food needs. Given the uncertainties arising from such dependence, such as rising and volatile food prices, and the effects of climate change, national efforts are needed to achieve food self-sufficiency and move towards low chemical, environmentally sustainable agriculture.
Figure 3: Production, Exports and Imports of Total Cereals by the World’s Regions, 2018, (%).
Source: Based on FAO Statistics (http: /faostat.fao.org).
But national self-sufficiency goals cannot translate simply into local or household self-sufficiency goals. Nations have to provide food for all their citizens, many of whom are in non-farm or urban jobs, and without government support, farmers may not make choices that move a country towards food self-sufficiency.
In the agrarian transitions we are currently witnessing, an increasing proportion of small farmers are abandoning agriculture in developing countries, especially since the neoliberal policy was launched. The WTO promotes trade liberalisation and the role of multinational corporations in agriculture (Siddiqui, 2019d; 2016a). Such policies contribute to the demise of small producers in developing countries. Earlier, agricultural production was centred on use-values, simple reproduction and quality foods that were environmentally and ecologically friendly to local soils and locally consumed. But mechanical agriculture has focused on exchange-values and big corporations’ profits and trade; it is ‘the global market-driven paradigm’.
As in Mexico and elsewhere, good land was devoted to export crops, imports of foodgrains increased and the local markets were driven by import prices. In China, the increased production of meat for the Chinese diet requires heavy imports of soybeans as feedstuffs for livestock. China joined the WTO in 2001; it resulted in increased food dependency and increased grain imports. However, China has no foreign exchange crisis due to increased agricultural imports as it has a huge manufacturing export surplus, but such is not the case for many developing countries. However, in China too, there are ecological limits due to water scarcity, governments funds for research and development have declined, and also millions of hectares of agricultural land have been lost to urban-industrial uses.
In the US, agro-fuels have aggravated food-price volatility, and contribute to global warming. The US received US $92billion in subsidies in 2006-2013. The main beneficiaries were transnational corporations like Cargill and ADM, and big financial companies like George Soros and Bill Gates, who have invested heavily in agro-fuels. Worse, at least for the EU, where 58% of biodiesel is imported, it will cause further deforestation in developing countries like Brazil, Malaysia, and Indonesia. These countries are regarded as the most efficient producers of agro-fuels, mostly from sugarcane. Moreover, the US government, for instance, spends nearly US$20 billion on farm subsidies annually, ranging from insurance, price loss coverage, land improvement, marketing, and research and extension support. In Japan, with an agricultural economy dominated by small farms, the government support for producers is more than 40% of gross farm receipts.
V. The Deepening Crisis in Indian Agriculture
The ‘Green Revolution’ was launched in Indian agriculture by the government in the mid-1960s, when it had acute food shortages and the country was forced to resort to foodgrain imports. (Siddiqui, 1999; 1997) This was made possible due to government investment in areas like irrigation and power and also government set-up of agricultural universities, marketing networks and provision of cheap credit from institutional sources (Siddiqui, 2014b; 1992). As a result, the state played a critical role in enabling its farmers to pursue the path of capitalist production in agriculture. This policy did manage to raise output and productivity and made India self-sufficient in foodgrains (Siddiqui, 2019d; 2018b). Moreover, besides raising incomes for big landowners, it also benefited small and medium farmers to a lesser extent. However, by the late 1980s, the agricultural crisis deepened and productivity and investment slowed down so the incomes of the farmers fell as well.
To find solutions, the neo-liberal reforms were launched in 1991, which changed the role of the Indian state towards agriculture. For the last thirty years, the private corporate sector has begun to grow rapidly. The size of the GDP increased, but the corporate economy was largely focused on the service sector, and it did not create employment. (Siddiqui, 2018c; 2017c) The share of the agricultural sector declined sharply, but the workforce remained employed in agriculture at the same proportion. The relative decline of the agrarian economy in terms of its value addition has produced many imbalances beyond the sphere of income and employment. The growing size of the services and corporate sectors has further marginalised India’s agriculture sector.
In India, in September 2020 the farm laws were passed by Parliament and the government did not seek advice from farmers’ organisations. There three laws associated with agriculture regarded issues such as hoarding, minimum support prices, and contract farming. The growing size of the urban middle class, and demand for processed food has risen sharply in recent years. Also, processed food could also be exported to other countries. The ruling elites have considered the neo-liberal policy to be the best option and a desirable solution for Indian agriculture. It is hoped that it will increase corporate investment in the agricultural sector.
The ‘new farm laws’ will gradually remove the government regulation of agricultural markets and will remove limits on stockpiling of agricultural commodities, and deregulate minimum support prices. In agriculture, the withdrawal of government support prices will dampen prices of agricultural commodities during the harvest period and the hoarders will be able to raise prices later on. Not only the farmers have to sell at lower prices, but consumers have to buy food at higher prices from the market. As a result, this will leave the agriculture sector at the mercy of corporations, and undermine, if not destroy, the public food distribution system and small scale family farms cultivation and will have long-term severe consequences on India’s rural population.
Moreover, nearly 70% of India’s 1.3 billion people depend on agriculture for their livelihoods and 800 million of them have relied on public food distribution during Covid-19. India’s agrarian economy has already been in crisis for over a decade due to rising farmers’ suicides, and indebtedness of farmers to banks and private money lenders. The agriculture sector is also currently severe under-invested and suffers from low farm prices. Under neoliberal reforms, the government started reducing support to the agriculture sector gradually. The reforms also reduced the support to health and education, which affected farmers as well. When agriculture became capital-intensive, the fixed costs for mechanised agriculture increased sharply. The small farmer could not afford this and went into a debt crisis.
Naseemo Kaur (left) shouts slogans during a protest in the Moag area of Punjab, India, on Oct. 1.
The main reason for high indebtedness in rural Punjab seems to be the increasing gap between incomes and costs. For small farmers the main source of income is what they receive after agricultural produce is sold at the MSP, but because the produce is usually not procured at the ‘guaranteed’ prices, farmers’ tend to face losses. While withdrawal of government subsidies has led to an increase in the prices of agricultural inputs. And if the government regulated MSP is removed, the recent study on small farms (Wire 2021) notes: “this will affect the incomes of the farmers. With a rise in input costs and a fluctuating income, farmers will be forced to take more loans… Big corporations may not snatch land away from small farmers directly, but an economic system could get created which will be detrimental to small and medium farmers.” In India, for example, according to official data, only 4% farmers have land holdings, which are more than 10 hectares and 86% farmers have a landholding size of less than 5 hectares and the remaining are what are called medium farmers, who have a land holdings of 6 to 8 hectares.
Private businesses have already invested in supplying seeds and pesticides; they began to expand their operations to consumer goods, ranging from potato chips and tomato sauce to processed cereals and dairy products. Both Indian and foreign big businesses like Adani, Reliance, Tata Rallis, Hindustan Unilever Group, and foreign companies such as Nestlé, and Monsanto have increased their operations in Indian agriculture. The farm laws will “override and undermine” the role of State government and violate principles of Indian federalism. The new laws, meant to promote contract farming, fail to take into account the “huge asymmetry” between small farmers on the one hand and companies on the other. Contract farming will increase the power of big businesses and offer no protection to the peasants. These will “consolidate… the market and the value chains in agricultural commodities in the hands of a few big players, as has happened in other countries such as the U.S. and Europe.”
The absence of any mention of MSP in the legislations should be interpreted as a quiet withdrawal of the government from the public procurement system. The MSP involvement in agricultural markets by the government has facilitated India’s transformation from an import-dependent country to one that has large food grains stocks. The government procurement of foodgrains has the following advantages: providing incentives for farmers in the form of assured returns, and will dampen food price volatilities in India, which is a common occurrence in global markets. It has helped to build food grains stocks for sustaining the public distribution system (PDS). If the government stops procuring food grains by offering the MSP, the PDS will collapse.
However, according to data, only 6% of the farmers in India are fully covered by the MSP, and 84% are located in the states of Punjab and Haryana. It is a widely known fact that farmers in Punjab, Haryana and Western UP are better off compared to other regions in India. Therefore, MSP needs to be widely available to farmers in other states rather than dismantling it. Farmers across the country are demonstrating against it. The new laws have the potential to restructure Indian agriculture in areas of production, procurement, marketing, pricing, stocking and land ownership. The government is arguing that since small farms are non-profitable it is necessary to opt for corporate farming. The law will lead to large-scale landlessness, unemployment and further impoverishment of rural India. As per the 2011 census, there are 494.9 million landless individuals in villages, who are directly or indirectly dependent on cultivation for their livelihoods.
Moreover, the researchers have demonstrated that vegetable and fruit cultivation does not mean a rise in the incomes of small farmers. For example, experiences in Africa and Latin America show that no clear benefits accrue to small and marginal farmers from contract farming. Small and marginal farmers constitute the majority of agricultural producers in India, and these Acts can impact their welfare adversely. This growing crisis was further exacerbated by the entry of multinational and corporate agri-businesses. These factors had a detrimental impact on emerging capitalist farmers who owned fewer than 4 hectares. Increased costs for inputs and technology mired them in loan cycles, which culminated in a suicide wave that took the lives of nearly 20,000 farmers in the last two decades in Punjab alone. We should mention here that the number of farmer suicides in India since 1994 is more than 350,000 (The Wire, 2021).
A misconception is created that farmers’ income would increase earned per acre, and shifting an acre from foodgrains production to some cash crop for export would double the income for the farmers. However, it is ignored that it will halve the employment generated on that acre compared to producing cereals, rice and lentils. This would mean less employment, and could increase destitution and unemployment in rural India. Big corporations would bid down their purchase prices, increase contract farming, and increase poverty among small farmers, while big companies who engage in exports would increase their profits through exporting fruits and vegetables to developed countries. It is therefore not the apparent income gain, but adverse impact on employment that will be severe; also, a large populated country like India will become dependent on food imports.
It could be argued of course that if the MSP and procurement prices are raised, then that would raise food prices for consumers. This is a misconception, and procurement prices can be raised without raising issue prices through an increase in the food subsidy. All this is quite apart from the fact that what appears at first sight as an easy way to raise peasants’ income, through a shift towards more lucrative cash crops, can make them pauperized when the prices of these crops crash in the world market, as they inevitably would since they are subject to wide fluctuations.
Members of All India Kisan Sangharsh Coordination Committee (AIKSCC) and activists of left parties and trade unions participate in a nationwide protest in Hyderabad, India, Friday, Sept. 25, 2020. Hundreds of Indian farmers took to the streets on Friday protesting new laws that the government says will boost growth in the farming sector through private investments, but they fear these are likely to be exploited by private players for buying their crops cheaply. (AP Photo/Mahesh Kumar A.)
The government’s minimum support price for farmers and the public procurement system are indispensable for India’s food security, public distribution system, farmer livelihood and agricultural growth. But the ‘New Farm Laws’ will facilitate a policy, which is based on the laissez-faire i.e. neoliberal approach that will undermine farmers’ interests. Moreover, India’s stride towards food self-sufficiency and agricultural growth, supported by the ‘Green Revolution’, was reinforced by institutional and policy support. The primary components of the wide-ranging policy support of farmer welfare since the mid-1960s have been the MSP and the public procurement system (PPS). However, the ‘new farm laws’ will introduce an environment wherein the MSP and PPS are likely to become redundant.
Developed capitalist countries led by the US and EU have been demanding access to agricultural production and markets in developing countries including India. Through the WTO’s ‘agriculture agreement’ of which India is a signatory they have been opposing India’s system of minimum support prices, and public stockholding of foodgrains essential for the public distribution system. The ‘Agreement on Agriculture’ regulates domestic subsidies in agriculture. Under this, subsidies such as the MSP would have to be capped at 10 % of the total value of the product. The idea behind the agreement was to get farmers to cultivate something other than wheat, sugarcane and rice. However, the ‘agreement on agriculture’ does not allow for any kind of subsidies like on water, power, MSP etc. The government also does not want to makes a law on MSP. Recently, the IMF’s chief economist, Ms Gita Gopinath supported India’s new ‘farm laws’ on the name of market liberalisation and she claimed that India’s new agriculture laws have a potential to raise farms income (The Economic Times).
In fact, a major feature of the 1991 neoliberal economic reforms was to increase private corporate involvement in the Indian economy including the agriculture. In the initial phases of liberalisation, the multinational companies were allowed to expand their control over the production and supply of farm inputs, such as seeds, fertilisers and pesticides. The new farm laws are intending to expand the hold of big companies into the sphere of agricultural marketing. The three Farm Laws will weaken the local traders, shut down the FCI and end government procurement. These would imply that the entire agricultural surplus will be available for the multinational companies to control and sell. Thus, corporate firms would gradually increase their control of the entire value chain and ultimately dominate it. The central government has undermined the powers of the states to enact laws related to agriculture and to make executive interventions in the interests of the people. The laws have been created solely with the objective of facilitating corporate penetration in agriculture, which are against the interests of farmers and people at large. To protect farmers, the government needs to be bold enough to reject the pressure from the WTO.
For India, the corporatisation of agriculture would mean the Latin Americanisation of agriculture sector in India where increased market based exploitation of natural resources have resulted in rise of rural inequality and violence. It must be rejected and alternatives must be found. At present, in India much of agricultural produce, especially food grains and vegetables, is sold at rates that do not reflect the real value of these commodities. There is a huge self-exploitation by farmers (of themselves and their family labour), and the real value of natural resources (of soil, water and biodiversity) are underestimated. The government should assist farmers in terms of payment for conservation activities and eco-services and for larger parity payments to rural and agricultural sectors in terms of better infrastructure and regulatory and supportive institutions.
Farmers need to have assured access and control over basic resources, which include land, water, credit and insurance, technology and knowledge management, and markets. The Congress government did set up a commission in 2004 (known as the Swaminathan Commission) to study the distress of farmers and to provide suggestions for improvements to the agricultural sector. The Swaminathan Commission presented its findings in 2006, and suggested “faster and more inclusive growth” for farmers, and contained suggestions for the inclusive growth of farmers and the agriculture sector. It aimed for a system of food and nutrition security, sustainability in the farming system, enhancing the quality and cost competitiveness of farm commodities and also recommended measures for credit and other marketing related steps. However, nearly fourteen years have passed since its findings were presented to the government, and still its recommendations have not been implemented.
Farmers need to have assured access and control over basic resources, which include land, water, credit and insurance, technology and knowledge management, and markets.
The present Bharatiya Janata Party (BJP) government policy is guided by the ideologues of the Rashtriya Swayamsevak Sangh (RSS), which is an upper caste Hindu extremist organisation of which Mr Modi and the previous Prime Minister Mr Vajpayee were lifelong members. The RSS and its affiliates are merely interested in playing with people’s emotions and using religion to organise people, thus trying to divert attention from the agricultural crisis. For example, ‘Love-Jihad’ and the laws against ‘religious conversions’ are rooted as much in this as the Islamophobia which is now rampant. In fact, Islamophobia too took firm roots in Mr Vajpayee’s time at the top. He was not against Mr Advani’s polarising march towards Ayodhya for the demolition of Babri Mosque and BJP’s drive for political power, which ultimately culminated in the demolition of the Babri Mosque in 1992. Mr Modi was an earlier RSS leader, who became chief minister of Gujarat state; under his watch in February 2002 a massacre of thousands of Muslims, which continued for four days, took place in several districts of the state, including the capital city of Ahmedabad, and the police and security officials were either absent or joined the mob.
Aakar Patel, a well known Indian author, says that the BJP government wants to create a Hindu Rashtra (i.e. Hindu Nation), which is the core of Hindutva: “is purely about the exclusion and persecution of India’s minorities, particularly Muslims … that is all there is to Hindu Rashtra.” He adds Modi’s record, both as chief minister of Gujarat for 13 years and as India’s Prime Minister for 7 years, shows that Modi “encourages anti-Muslim prejudice”. He further points out that “India does not have a Muslim chief minister in any of its 28 states … this is the deliberate exclusion of 200 million people”. According to him, “whilst the BJP talks of appeasement of Muslims, the truth is that in almost every sphere Muslim representation is way below their proportion of the population. For instance, they should have 74 seats in the Parliament but only have 27. They are nearly 15% of India’s population but only 4.9% of state and central government employees, 4.6% of the paramilitary services, 3.2% of the elite administrative services such as IAS, IFS and IPS and perhaps as low as 1% of the army”. Commenting on India’s Supreme Court, he says: “In the Babri Mosque judgement, after accepting the mosque was wrongly and illegally demolished, the Supreme Court still gave the site to the people who demolished it.” (The Wire, 2020)
Furthermore, the BJP government’s determination to ensure that those who are accused of communal attacks against Muslims in the last February Delhi riots, which resulted in the massacres of Muslims, goes unpunished. Other recent unpopular polices includes the abrogation of Article 370 after brutally crushing political and civil society activity in the Jammu and Kashmir and the determination to push so-called illegal Muslim immigrants out of Assam and India. The government declared lockdown against COVID-19 without even realising that this would destroy hundreds of millions of workers livelihoods, and force more than 12 million persons to start walking or cycling home from big cities to their villages thousands km away in the heat of summer. There is a lot of concerned both at international and national levels about the rise in divisiveness of the Indian society such as Citizenship Amendments Act, love-Jihad, beef lynching and the general attacks against Muslims. The government on the name of protection of cow which affects among other things besides eating habits but also the livelihoods of many Dalits and Muslims in hide and leather industry. The other, anti-conversion laws directed against inter-faith marriage has the primitive intent of maintaining the ‘purity’ of bold. This certainly will hold back investments. The problem is that these tensions may surface, but the most important thing is, how the government handles it. This needs to be tackled, if India wants to develop a decent society.
VI. Conclusion
This study has found that economic self-sufficiency and sovereignty in food production and the removal of poverty, which was emphasised by the leaders of developing countries at the Bandung Conference (1955), is still very relevant, and to achieve it, state involvement in the economy is very important and relying on market-forces as suggested by the multinational corporations and developed countries will only deepen the agrarian crisis further. Therefore, the developed countries’ agrarian model i.e. capital-intensive and labour-saving with average very large farm-size is not suitable for the developing countries.
In the US, for instance, the big retailers such as Walmart do not have stock limits. They also have adopted contract farming, and the US farmers on average receive a subsidy of US$ 62,000 annually. Then the question can be asked, if open markets are really that efficient, then why the US government pumps money into the agriculture sector. The developed countries pump billions of dollars into agriculture every year by way of direct income support or subsidies. The EU today is giving about US$ 100 billion of agricultural subsidies each year and about 50% of it goes as direct income support to farmers. Therefore, it is clear that agriculture is sustainable and viable in the developed countries notbecause the markets are efficient, but because of the government subsidies.
In fact, corporate industrialised agriculture could bring environmental and social devastation. There is a need to help ‘small-scale’ or family farming. The virtues of small-scale farming are that it is more labour intensive, provides greater employment and it is proven that it is socially more equitable and a more ecologically sustainable way of farming. Therefore, the priority of the developing countries should be to overcome food deficits and move towards self-sufficiency, to promote small family farms and to increase government investments in agriculture.
The neoclassical model i.e. ‘market solution’ for Indian agricultural development has problems, namely that prices for agricultural commodities will rely on the free-market and will be socially disastrous. Land-use would be left to the free market, not socially required. An inevitable consequence of leaving agriculture to the operation of the free-market would be a shift of land areas away from foodgrain production towards the production of vegetables and fruits that are demanded by consumers in developed countries. It will result in undermining the self-sufficiency in foodgrains that has been developed over the years and will make India food-import dependent and also increase hunger.
The destruction of self-sufficiency in foodgrains means that the country now would not produce the foodgrains it requires, but have to depend on food imports to meet domestic needs. Adequate quantities of foodgrains may not always be available in the world market when the country needs them; this is particularly important in the case of a large country like India. The real-life world market may be different from that presented by neoclassical economists, who assume that there are large numbers of buyers and sellers who have a totally impersonal relationship. However, the world food market depends upon the goodwill of developed countries like the US and the EU, who happen to be large food exporters. Therefore, for developing countries like India, state support is crucial for small farms, which is labour-using and labour intensive and hence creates more jobs. There is also a need to increase domestic food production and to strengthen food-sovereignty, while at the same time sustainability and ecological aspects should not be ignored. To achieve all these, the role of the state is very important, and market forces alone could not accomplish it.
In India, the BJP government suggests that farmers should move away from producing foodgrains towards other crops – this has also been suggested by developed countries in recent years. Developed countries have huge over-production of foodgrains, of which they have a surplus, and in the name of diversification it is suggested they should reduce foodgrains production. There seems to be a paradox here, despite the surplus food-grain production, still nearly a quarter of India’s population is malnourished.
Recently, millions of Indian farmers have marched and protested against new ‘Farm Laws’ in New Delhi, under these laws, big corporate investment and control will increase and gradually reduce state involvement in the agriculture sector. Hoarding at a large scale will be permitted and agricultural commodities such as food grains being stored has been legalised, enabling the manipulation of food prices for the benefit of big corporations, while the other two laws aim to eradicate MSP, and to promote contract farming. Finally, the ‘Farm Laws’ will make farmers more dependent on market forces and big corporations, and gradually state involvement in agriculture will be withdrawn. This market-driven policy will have long term disastrous consequences both for the environment and also for small and poor farmers in India and will also increase rural inequality and poverty.
Dr. Kalim Siddiqui is an economist, specialising in International Political Economy, Development Economics, International Trade, and International Economics. His work, which combines elements of international political economy and development economics, economic policy, economic history and international trade, often challenges prevailing orthodoxy about which policies promote overall development in less developed countries. Kalim teaches international economics at the Department of Accounting, Finance and Economics, University of Huddersfield, U.K.. He has taught economics since 1989 at various universities in Norway and U.K.
References
Bello W. (2002). De-globalisation: Ideas for a New World Economy. London: Zed Books.
Bernstein, H. (2009). “V.I. Lenin and A.V. Chayanov: looking back, looking forward”, Journal of Peasant Studies, 36(1):55-81.
The Economic Times. (2021) 27th January.
Girdner, E.J. and K. Siddiqui. (2008). “Neoliberal Globalization, Poverty Creation and Environmental Degradation in Developing Countries”, International Journal of Environment and Development 5(1):1-27, January-June.
Klein, N. (2015). This Changes Everything: Capitalism vs. the Climate, London: Penguin.
Patel, A. (2020). Our Hindu Rashtra: What It Is. How We Got Here, Chennai: Westland Publications.
Siddiqui, K. (2020a). “The Political Economy of Famines under Colonial India: A Critical Analysis”, World Financial Review, July/August, pp.56-70.
Siddiqui, K. (2020b). “Britain’s Trade with China in the Eighteenth and Nineteenth Century: A Review of the Opium Wars”, Asian Profile, forthcoming.
Siddiqui, K. (2020c). “Globalisation, International Trade and the Developing Countries”, European Financial Review, August September, pp.60-71.
Siddiqui, K. (2020d). “The Study of Economic History and the Importance of Understanding the Past”, World Financial Review, January/February.
Siddiqui, K. (2019a). “The Political Economy of Global Inequality: An Economic Historical Perspective”, Argumenta Oeconomica Cracoviensia, 21(2):11-42.
Siddiqui, K. (2019b). “Economic Transformation of China and India: A Comparative Political Economy Perspective”, Asian Profile, 47(3):243-259.
Siddiqui, K. (2019c). “Agriculture, WTO, Trade Liberalisation, and Food Security Challenges in the Developing Countries”, World Financial Review, March-April, pp. 31-40.
Siddiqui, K. (2019d). “The Economic Performance of Modi’s Government in India: The politics of Hindu right”, World Financial Review, July/August, pp. 12-26.
Siddiqui, K. (2018a). “The Political Economy of India’s Economic Changes since the last Century” Argumenta Oeconomica Cracoviensia, 19: 103-132.
Siddiqui, K. (2018b). “David Ricardo’s Comparative Advantage and Developing Countries: Myth and Reality”, International Critical Thought, 8(3): 1-28, September. Taylor & Francis Group.
Siddiqui, K. (2018c). “The Political Economy of India’s Post-Planning Economic Reform: A Critical Review”, World Review of Political Economy,9(2): 235-264, summer, Pluto Journals.
Siddiqui, K. (2017). “Globalization, Trade Liberalisation and the Issues of Economic Diversification in the Developing Countries”,Journal of Business & Economic Policy 4(4):30-43.
Siddiqui, K. (2016a). “International Trade, WTO and Economic Development”, World Review of Political Economy, 7(4): 424-450, winter, Pluto Journals.
Siddiqui, K. (2016b). “The Economics and Politics of Hindu Nationalism in India”, Asian Profile 44(6):497-507.
Siddiqui, K. (2015a). “Economic Policy: State versus Market Controversy” in edited Adam P. Balcerzak. Contemporary Issues in Economy: Market or Government, pp.39-63, Torun: European Regional Science Association, Poland.
Siddiqui, K. (2015b). “Perils and Challenges of Chinese Economic Development”,International Journal of Social and Economic Research 5 (1):1-56.
Siddiqui, K. (2015c). “Agrarian Crisis and Transformation in India”, Journal of Economics and Political Economy 2 (1):3-22. ISSN: 2148-8347,
Siddiqui, K. (2014a). “Modernisation and Displacement of Rural Communities in India”, Journal of Social Business 4(2-3):3-27.
Siddiqui, K. (2014b). “Contradictions in Development: Growth and Crisis in Indian Economy”, Economic and Regional Studies 7(3):82-98. ISSN 2083-3725.
Siddiqui, K. (2014c). “Flows of Foreign Capital into Developing Countries: A Critical Review”, Journal of International Business and Economics 2(1):29-46, March.
Siddiqui, K. (2013). “A Review of Pakistan’s Political Economy”, Asian Profile 41 (1):49-67.
Siddiqui, K. (2012). “Developing Countries’ Experience with Neoliberalism and Globalisation”, Research in Applied Economics 4(4):12-37, December.
Siddiqui, K. (1999). “New Technology and Process of Differentiation: Two Sugarcane Cultivating Villages in UP, India”, Economic and Political Weekly 34 (52):A39-A53, December 25.
Siddiqui, K. (1998). “The Export of Agricultural Commodities, Poverty and Ecological Crisis: A Case Study of Central American Countries”, Economic and Political Weekly 33(39):A128-A137, September 26.
Siddiqui, K. (1997). “Credit and Marketing of Sugarcane: A Field Study of Two Villages in Western Utter Pradesh”, Social Scientist 25(1-2):62-93, January/February.
Siddiqui, K. (1995). “Food Security and Sustainable Agricultural Development”, The Nation, September 2.
Siddiqui, K. (1994). “Global Hunger and Policy Initiative’ Morgenbladet (in Norwegian), September 13 & 16, Norway.
You might think the best gift you can give your child is what they have asked for on their birthday and Christmas wish lists. While material gifts are bound to put a smile on their face, there is a long-term gift that can be even better: access to education. While not every parent can afford to pay for their children’s post-secondary education as those costs arise, they can put a plan in place to cover them in the years to come. More specifically, parents, caregivers, friends, and family can set aside some of their earnings into aRegistered Education Savings Plan (RESP).
What Is an RESP?
An RESP is a savings tool that allows your children to take advantage of government grants, investment income, and tax-sheltered growth by making regular contributions that can help pay for their post-secondary studies. While there aremany savings options out there, this is one of the few set up expressly for post-secondary education. You can open a plan and begin contributing at any time. It will then remain open until you close it, use the funds, or until it has been open for 36 years.
Why Open an RESP?
Post-secondary education can be costly, especially when you’re trying to come up with annual tuition fees for more than one child. Having an RESP for your child or children can mean that they can tap into the available funds when the time is right, without it affecting your bank balance. We’ve included a few of the many benefits of an RESP below.
Government Grants
Family contributions can make a great deal of difference to a student’s college life experience. However, it’s not just your family and friends contributing – it’s also thegovernment. When you open an RESP, you may become eligible for the Canada Education Savings Grant (CESG). With this grant, the Canadian government matches 20% of your contributions up to $500 per year and a lifetime maximum of up to $7,200 per child.
The Canada Learning Bond is also available for lower-income families, alongside provincial government incentives for those residing in British Columbia and Quebec. Post-secondary costs are rising, so having government grants available may make a world of difference to your child’s educational opportunities.
Tax-Free Investment Earnings
While your investment earnings remain in your RESP, they grow tax-free. By not paying any tax on those earnings, you may be able to grow your child’s post-secondary savings faster.
Various Plans
Every family dynamic is different, which is why there are a variety ofRESP options to suit each unique situation. Families with more than one child, stepchildren and adopted children included, may benefit from a family plan. With this plan, you can name one or more children to receive the savings. However, it can only be opened by a blood relative, such as a parent or grandparent. If you are not related to the child for which you’re opening an RESP, you can select the individual plan. You can name one beneficiary on this plan, and you don’t have to be related to them.
Anyone who wants to make regular contributions to a single child may do so through a group plan. This plan includes several people and their children who invest their funds to benefit all in the group.
Easy Withdrawal Process
When the time comes for your child to commence their post-secondary education, you can tap into your RESP with ease to pay for tuition, books, rent, meals, and more. However, suppose your child decides not to pursue post-secondary education. In that case, you can withdraw your contributions or transfer them to another child. You may even be able to withdraw investment earnings, although they may be subject to tax and other conditions, or transfer it to an Registered Retirement Savings Plan (RRSP).
The Importance of Saving for Post-Secondary Education
According to the Public Agenda,70% of students who drop out of university do so because of financial concerns. By starting the savings journey early, placing importance onbudgeting, and considering grants, scholarships, and saving plans, students may feel more confident to enrol in a college, trade school, university, or another academic program.
Saving for post-secondary education can also reduce the need to take out hefty loans that can be a significant burden later in life. Even though there are several student loan options available, many of them carry interest rates of at least 2.5% plus prime, with prime referring to the average bank prime rate at the time.
When you consider the ever-rising cost of post-secondary education, high interest rates of student loans, and the significant stress associated with financial woes, having a savings plan can be a lifeline. Giving your child the gift of education in the form of an RESP may be one of the best things you ever do for them.
Whether you are a crypto investor or not, you have surely seen the news of Bitcoin’s price flying through the roof, with the coin reaching an all time high of $50,000. But why the sudden surge? What caused the world-famous cryptocurrency to reach heights we haven’t seen before?
One of the major things that have happened recently is Elon Musk and Tesla purchasing $1.5 billion worth of Bitcoin. Not only did this send the price of the coin flying, the announcement that Tesla will be accepting Bitcoin as a payment method for their vehicles was a seriously big moment.
For years now, there was the constant belief that Bitcoin, and cryptocurrencies in general, will eventually replace fiat currency. Investors, big and small, are banking on the idea that the Dollar, Pound, Yen and all other “regular” currencies will become obsolete.
This massive purchase and announcement from Tesla is the start of that. Yes, there are some stores and brands that currently accept crypto’s as payment, but Tesla is easily the biggest of those brands.
Clearly, buying so much Bitcoin will make the price soar, but it is also confirmation that investors and crypto experts were right, crypto’s are now being seen as a real payment option, and therefore, millions of people want to get involved.
Another reason for the surge is that more and more people are realising how easy it is to get involved. Those in the know are clearly aware that it is simple to buy and trade crypto’s, but now people who knew nothing before, know exactly what is needed to become, and stay involved.
The ease of access has been a driving force, more people are seeing that all it takes is a few clicks to sign up to a trade platform, and then a couple more clicks to own some Bitcoin or other crypto currencies. It takes a few minutes of your time to be in the game.
Combine the news of the prices surging, and the fact that getting involved is as easy as ever before, you get another aspect that is driving the price up, the fear of missing out. Yes, FOMO is a driving force behind the recent price surge.
Every day we see news of people making hundreds of thousands, sometimes millions of dollars off the back of Bitcoin and cryptocurrencies, and you want to get your piece of the pie.
Bitcoin and other cryptocurrencies being used as a hedge against inflation has also played a part in more people buying, and therefore driving the price up. More and more people are realising that having all their investments in fiat currency are built on the strength of that currency, and that inflation doesn’t weaken it over time.
Cryptocurrencies don’t suffer from this, your crypto’s are part of their own system that isn’t attached to the economy, therefore inflation won’t lessen their worth and weaken their strength.
As mentioned already with regards to Tesla accepting Bitcoin as payment, the increased legitimacy of cryptocurrencies is currently driving the prices up, and will continue to be a reason in the future.
Whether it’s Tesla allowing you to buy a car with your Bitcoin, or even a small shop allowing you to buy a sandwich with whichever crypto, this turn into accepting crypto’s as a legitimate means to pay for goods and services is what the future is going to look like.
Even back in the day when Bitcoin first came around, people were spending thousands of them on a pizza and a six-pack of beer, Bitcoin has always been accepted in some way, but never on a large scale, and never regularly.
Paypal announced a few months back that you will be able to use their service to purchase and trade crypto’s using their service, making it even easier now to get into the crypto game, this also adds to the legitimacy of cryptocurrency.
Paypal integrating cryptocurrency into their system is also a good sign towards other financial institutions, showing that it is possible and obviously a good move with regards to how people now view cryptocurrency in a way more positive light.
One of the last aspects that is driving the price ties into a couple of previous points. Many people once thought they had missed out, they thought they had missed the massive boom and that it was too late to get involved.
As time has moved on, it has been proven that this isn’t the case. It isn’t too late to get involved, because this is only the beginning of the so-called “Crypto Revolution”. There are thousands of coins and projects to invest in that will allow you to make money, not just Bitcoin or Ethereum.
Cryptocurrency is well on its way to being the future of currency. It is very possible that people alive today will see it start to overtake fiat currency in some parts of the world, and be the reason regular currency becomes less and less needed.
All these factors have contributed to the recent, incredible surge in price of Bitcoin, but this really is only the beginning, and as the months and years pass, we will see the real power of cryptocurrencies, and how they can change the world.
By Danny Leipziger
China cannot continue to rely on exports to drive its growth, but what are the alternatives?
China ran a $1.2 trillion trade surplus last year, and despite admonitions from the IMF to rely...
The World Financial Review uses cookies to improve site functionality, provide you with a better browsing experience, and to enable our partners to advertise to you. Detailed information on the use of cookies on this Site, and how you can decline them, is provided in our Privacy Policy and Terms and Conditions. By clicking on the accept button and using this Site, you consent to our Privacy Policy and Terms and Conditions. ACCEPT
Privacy & Cookies Policy
Privacy Overview
This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.