This has to be my new favourite story, and it will work particularly well for A2 but for AS too, with elements of micro as well as macro.......
Did you know that China produces 80% of the world's supply of garlic?
Did you know that police in Britain, Ireland, Austria and Poland arrested smugglers for illegally importing at least €3m worth of garlic into the EU last year alone?
Here is a planned answer to an exam question on producer subsidies
“Discuss the likely effects of a EU beef subsidy on the market for beef production in Wales”read more...»
Last week I attended the IEA Hayek Memorial lecture, given by Elinor Ostrom, Nobel laureate, on common resources and looking beyond government regulation.
The lecture took two parts: a presentation from Professor Ostrom, which was mainly focused on the research methodology, and a Q&A session, where anecdotal research evidence was more forthcoming.read more...»
This blog entry will provide a regularly updated set of links to resources to the European Union’s Common Agricultural Policy and attempts to reform this contentious and complex system of farm support.
Check below for suggested linksread more...»
Hats off to the herd! Milk production in the UK is expanding yet many dairy farmers have or are likely to leave the industry over the next five years unless raw milk production becomes more economically viable. Can the stakeholders in the sector reach fresh agreement on sustainable contracts for the near 40 million litres of milk produced every day?read more...»
Nigel Cassidy reports in this video from BBC news on fears that the world faces “a century of hunger” if the international community cannot agree on new rules regarding food prices. Food security is a hugely important global economic, political and social issue and one of the best resources for keeping up to speed on this is the Guardian’s dedicated page of articles. Here is the link. Check the links at the bottom of the blog for past articles on this topic.
The tragedy of the commons and the grave consequences for the state of marine ecology are highlighted in this new report. Covered with passion in this blog. Climate change, pollution and over-fishing are two fundamental problems for the oceans. More details here from the International Programme on the State of the Ocean (IPSO) website.
The report identifies a number of important policy approaches to tackle the problems - The scientists say that the ‘precautionary principle’ must be used in terms of oceanic impacts, in other society shouldn’t don’t proceed with activities unless they are proven to be largely safe for marine ecosystems. And they argue for much stringer use of property rights by widening the size of international marines of the sea.
TED Talk: Jeremy Jackson: How we wrecked the ocean
Each of the AQA a2 economics papers contains data response questions where understanding and awareness of the context of the economics of the European Union comes into play. We have a EU Economy in Focus study companion which is published in updated form each year. Details are available here. One area for revision focuses on the analysis diagrams that might be used to support your answers to EU context questions, I have put together a listing of topic areas where a diagrammatic approach might pay dividends - it is not exhaustive of course, merely some suggestions that might be useful. It appears below:read more...»
I will keep this blog updated with a selection of video clips relevant to the study of the EU - please check below for some links and embedded videosread more...»
The Common Agricultural Policy is a system of farm support that was set up by the EU to assist the agricultural sectors of its member states. The CAP accounts for nearly half of the EU’s budget, at approximately £48bn, and combines direct subsidy payments and price support schemes. Economic welfare is concerned with levels of human well-being, and can be achieved through an efficient allocation of resources, thereby maximising consumer and producer surplus.read more...»
The economic, environmental and social issues arising from farm support in developed and developing countries often figure in final year teaching for A2 economics. We are looking at this at the moment as part of our teaching of the economics of the EU. Here are five fresh links on the vexed question of how best to reform the Common Agricultural Policy of the EU - including two recent videos from BBC news.read more...»
The UK is one of many countries that now face a dilemma when it comes to fish stocks and their sustainability. In the UK we now consume over 385,000 tons of fish per year whilst on a global scale only 10% of large fish stocks that existed in the 1950s are still present today; this include both cod and tuna. Stock depletion has become a larger issue because of the increases in fishing technology – especially in long-line fishing which is the main technique used in Japan.
As a result many of the once inaccessible fish reserves have become economically viable to fish as boats are more fuel efficient and require less labour. In a fully functioning market the decline in supply of the product would cause an increase in price and act as a disincentive for consumers to purchase the product meaning that the industry would reach a sustainable equilibrium. In this case however there has been a deep market failure resulting from the tragedy of the commons. The sea, and its fish, is a common resource either on a global scale or on a national scale within a country’s own territorial waters. There are very few established property rights over the sea meaning that rational economic agents have an incentive to plunder the seas resources causing the falling fish stock levels.read more...»
A sustained rise in the global prices of foodstuffs is called agflation. As our chart below shows, the Economist’s index of global food prices has shown high volatility in recent years, there have been two sizeable and steep increases in food prices and a downturn in the wake of the 2009 global recession. And now the United Nations Index of Food Prices has now risen back above levels last seen in 2008 at a record high.
A period of rising food prices affects both the demand and supply-side of an economy. And the impact will depend on many factors including:
(i) The patterns of trade for one or more countries e.g. whether a country is a net exporter or importer of food
(ii) The importance of food production and exports in economic activity e.g. the share of value added contributed by farming, food processing and other food-related industries
(iii) Average incomes for a given country / region and the percentage of incomes that must be spent on food to ensure a modest but adequate lifestyle
(iv) Possible effects of rising food prices on variables such as inflation, interest rates and the exchange rate
I have put together a listing of suggested reading / articles on different aspects of the economics of the EU. This is available for download below as a pdf file.read more...»
There are lots of aspects of economics in this little story from the Independent on Wednesday 1st December. The final section of the report into the effects of the early snow falls is about Christmas tree shortages, and links to this BBC story about Nordmann fir trees, and the two together contain several references to the A level syllabus:read more...»
It’s that time of year again when we’re looking at different markets in AS Microeconomics, and once more trade-distorting subsidies are back in the news- this time in the cotton marketsread more...»
Charles Clover, author of The End of the Line - the inspiration behind the award-winning documentary film of the same name, was on splendid form in a talk to the school Geography Society tonight. After showing an abridged version of the powerful film he led a discussion on issues raised by the End of the Line. What is clear is the immediacy of the global fishing crisis. One way or another this will be resolved in our life time and the consequences of measures designed to protect and rebuild fish stocks and aqua-diversity will impact on billions of people around the world.
Accoding to Clover, the EU continues to be a black hole when it comes to successfully managing fish resources - if ever there is an example of government failure this is it. To save the Blue Fin tuna we need to set aside 20% of the Mediterranean and in some areas of the North Sea, replenishing haddock and cod stocks will require upwards of 50% of fishing grounds to be closed and the process of large-scale decommissioning of fishing capacity must continue. There is a stark paradox that fishing fleets can now make more money by fishing less because we are already way beyond the point of maximum sustainable yields. The “economic effort” required to catch one single fish in the North Sea has risen by 97 per cent over the last hundred years.
Investment in marine reserves offers much hope for the future and British money is leading the way in this. Charles Clover is President of the newly established Blue Marine Foundation and they have already had a major success. The Marine Protected Area (MPA) around the British-owned Chagos Islands will cover some quarter of a million square miles of sea around the archipelago in the Indian Ocean and include a “no-take” reserve banning commercial fishing. It appears to have been secured with a major investment from the Bertarelli Foundation.
I remember my geography teacher describing the CAP as ‘the most boring topic to cover in the whole A-Level’, and I do sympathise with that point of view, so in an attempt to liven it up- and to save me from having to explain it, I’ve made a 7 minute video which should provide a good enough introduction to the basics of the CAP.read more...»
Chef Dan Barber argues for a radically different approach to food quality and sustainability with this impassioned and inspirational talk at TED - his love story revolves around a revolutionary farming method in Spain. Superb as part of any course on the economics of farming and fishing and approaches to the erosion of ecological capital. He argues that intensive agri-businesses that are reliant on capital and chemicals have never produced good food.
A selection of key terms and acronyms that students may find useful when studying the economics of the EUread more...»
Here is a free revision download for teachers and students who wish to update their understanding of key topics and issues in the European Union…read more...»
For the olive oil growers of Spain falling prices are threatening their very existence. They claim that the supermarkets - who sell 9 out of every 10 bottles - have used their market muscle to drive down the retail price and the growers are barely able to justify continuing production. This is a good short video on the workings of the price mechanism.
There is plenty of coverage today of the news that the global price of raw sugar has increased to its highest level since March 1981 on the back of a widening imbalance between world supply and demand.
The hike in sugar prices is a classic market response to a rise in demand for sugar - especially in countries such as Brazil where a growing volume is being used as a (subsidised) source of ethanol - combined with supply shortages caused by low rainfall during the monsoon season in India and China and hail and drought affecting supplies from Russia.
Sugar output in India has contracted by more than 45% over the last year and the country is on the point of moving from being a net exporter to a net importer of sugar if measures are taken to limit existing exports to maintain sufficient supplies for the home economy. Global sugar demand will exceed output by as much as 5 million tons in the year through September 2010, according to the International Sugar Organization in London.
When demand exceeds supply, existing stocks fall and this is a key factor driving prices higher. Speculators can cause the price movements to be exaggerated as they trade in the forward markets to buy up available stocks in the expectation of further price increases.
Telegraph: Sugar price hits 28-year high
Revision notes on aspects of the common fisheries policy of the EU and the crisis in the industryread more...»
Revision notes on aspects of farm reform in the European Unionread more...»
The Icelandic fishing industry is often cited as one that has successfully managed to replenish rapidly dwindling stocks of haddock and cod through the use of tradable fishing quotas. This is in stark contrast to the government failure embodied into the failed quota system of the EU common fisheries policy. But as this report in the Guardian suggests, the Icelandic fishing sector is also facing problems - namely high levels of debt and a fall in demand for salt cod from recession-hit Southern European countries.read more...»
The fishing industry is regularly under investigation, and not just in the EU, in an endless attempt to avoid the Tragedy of the Commons and maintain a sustainable level of production. The links below to previous blog items show that this topic is under constant review, and it is now being strengthened by a new film release. ‘The End of the Line’ is a film about the global fishing industry which will open in the UK cinemas next Monday, having previewed at the Sundance Festival in Utah earlier this year.
The documentary claims to be to the marine environment what An Inconvenient Truth was to global warming, exposing the huge over-capacity of the fishing industry and inefficient, poorly enforced regulation. There are some extreme statistics: the industry has capacity which would allow it to catch four times the current annual output. The world’s long-lining industry sets 1.4 billion hooks every year. These are estimated to be set on enough line to encircle the entire globe more than 550 times. The mouth of the largest trawling net is big enough to accommodate 13 747 jets.read more...»
A brief video clip on the forthcoming review of the use of fishing quotas in the European Union. Can the 27 member states come up with an agreement on the appropriate use of fishing quotas and tackling issues such as fish discarding?read more...»
Here is a free revision update guide for students preparing for A2 Economics exams this summer….read more...»