This is the situation in the developing countries like Pakistan and India who are mostly called as agricultural economy. Whereas in the developing countries the situation is different as in USA the farmers are given relaxations and rebates they plough the fields with different agricultural products. This helps in the production of the food material inside the country and becomes extra beneficial in one way or the other. Supply and Demand: The natural disasters in the country are the major setback to the economy of the country. The natural disasters most of the times are the catalyst factor in the increments of the agricultural pricing and whatever anyone says these are not the part of the policy at all. The disasters like flood and earthquakes are the major reasons that make the flow of the supply and demand to suffer and leave its position of equilibrium (Braverman et al, 1983). This leads to the sudden shortage of the agricultural products and the import becomes inevitable. At this situation the country that exports products to a country asks for more amounts then what is present in the market which is paid due to the obligations of the needs. This also increases the price of the agricultural products in the international market. This whole situation causes problems at one face and the benefits at the other and the agriculture products which are usually used as food becomes a healthy business regardless of the needs and desperation of the people who need them urgently. This allows for the foundation of an international community that must keep an eye on the international market trends and formalize a policy that is acceptable to all in all the conditions and will allow in the solution of the disaster with minimum fuss and at a very low cost as required (Bambang et al, 2007). Fluctuations in International Markets: The agricultural phenomenon is like the oil. The oil consumption can never be minimized because of everything that is around us requires it. The energy production and other stuffs all require oil and for this reason the international market is always filled with the hype of the oil prices.
The oil prices like other things are dependent upon the supply and demand. The supply and demand dictates the prices of oil. Recently the fluctuation in the oil prices that were seen saw an increase of around $150 and a decrease to around $45. The reason for this change was the international market became a victim of the hypes and the international investors didn’t know whether the oil will be in such need in the future or not. This one point led to the destruction of various financial markets. The slump in the United States afterwards devastated the whole world and agriculture pricing were one of the affected one. What could be the main cause of the pricing slump of the agriculture and how it can be managed to be kept at a certain point requires lot more study with reference to policies of the countries around the world. Determination of Policies: It has been just recently when the policy makers have shifted their interest towards the hunger population for a more precise devising of the agricultural strategy. The 70% of the poor population of the world in comprised in the rural areas, thus stating that even as the agricultural products are produced in the rural lands, why still there is a problem of hunger and starvation (Bambang et al, 2007). The problem keeps on encouraging the fact that policy designs are not up to mark as they don’t include the rural population in the benefits and losses of the economy. To keep the pricing stable it is important to get to know the real issues that are present and correct the false interpretations and the problems of the agricultural related professionals. This indeed will help in the stable flow of the demand even if the supply increase. The proper feature of the policy should be to provide relaxation in taxes and subscriptions and the provisions of the luxury to the farmers and the agricultural related professionals (Bambang et al, 2007). This is the fact that a person can live without electricity but can never live without the food, so bearing this point in mind; the government should take certain brave steps to change the whole situation regarding the pricing of the agricultural products. Determination of the agricultural policy has become far more political than before because it certainly impacts the equity, consumption, income distribution, production and economic development. Even in the developed countries, though the ratio of the production is very low, still it represents a major portion in the economic development, consumption and production. A better analysis of the low income families around the world depicts the fact that these families consume most part of their income on the food and when the prices increase, their income ratio become considerably lowers and this does not happens for the high income families who don’t spend much for the food and therefore can easily cope up with the situation even if the prices get high. Thus the problem really pertains for the low income families and in most of the developing countries, the number of low income families is more 90%. Thus any affect in the pricing policies will virtually disturb most part of the population and even if the international prices fluctuate or some disaster comes in any part of the world, they are the ultimate affecters (Arulpragasam & Conway, 2003). The pricing policies are designed to benefit the urban population including the public employees and also the military. So these groups are taking all the initiative of the food and somehow on the expense of the farmers. Government cannot solely change this situation because otherwise the burden on the budget will more probably hurt all the processes of the country. It is only then when the rural representation becomes a part of the democratic government and look for a change in the policy which most makes the local prices much more than the international price which will increase the stakeholder benefits but not the farmer. These stakeholders are the industry owners who have the license to export and import and sell their products in the country. Though they receive their products at much cheaper rates, but can increase their prices due to their managing of the monopoly. The farmers on the other hands are quite reluctant to still crop the food related agricultural crops because in either way, if the prices increase they must a supply of the food (Bambang et al, 2007). What they do is that they keep a good proportion of the food for them and sell the remaining. If they opt for some other non food crop they are risking their food supply thus they are virtually bound to do what they are doing. Conclusion: Nevertheless, the policy has to be shifted and changed considerably. The problem occurs only in the developing countries and IMF is there to play its role in the favor of developed countries by making the governments to increase the taxes and other rebates on the low income families. The international trade has significantly suffered from the policies of World Trade Organization in conjunction with the World Bank and IMF. There impact on the country’s policies is what that is allowing the economies to become more and more vulnerable to the international market price fluctuations.