GENTECH archive 8.96-97


AGricultural policies

Folks:  on the issue of food dependence, thought you might find this 
piece, snipped out of a provincially funded agriculture clipping 
service called AGNET, to be of interest.  Ann

23 Nov 1996
The Economist
A story which states that fertilizers and genetically-engineered crops 
are great technologies, but that the misappliance of economics, rather 
than a lack of technology, that has done most to victimize the world's 
800m hungry people. 
The story cites a growing body of evidence suggests that governments in 
many developing countries, often egged on by "experts" from the rich 
world, have discriminated against their farmers, with disastrous 

A five-volume World Bank study of 18 developing countries during 196o-
85, for example, found that farmers had been penalized in a host of 
ways.  Their ability to trade had been harmed by overvalued exchange 
rates and  export quotas. They had been forced to sell produce to 
state-run food monopolies at artificially low prices. 
The Economist says that protection of domestic manufacturers, meanwhile, 
forced up the price paid by farmers for various necessities and reduced 
their purchasing power as consumers. The net effect of such policies was 
a huge transfer of income out of agriculture - equivalent to 46% of the 
countries' agricultural GDP each year, according to the study.
While the policies may have seemed sensible at the time, economically 
such policies were flawed, says the story. Farmers, it turns out, are 
very responsive to price changes. Large, mechanised farms are not 
necessarily more efficient. Given the right incentives, small farms 
using family labour can be as productive as large ones. In China, whose 
farm sector has grown by 6% each year for over a decade, the average 
farm is a mere half a hectare in size. The World Bank study found that 
the less countries discriminated against agriculture, the higher their 
rates of growth, both in agriculture and across the economy as a whole. 
The story argues that higher returns on agriculture should lead to more 
rural jobs, which puts money  in the pockets of the hungry.
Dr. E. Ann Clark
Associate Professor
Crop Science
University of Guelph
Guelph, ON  N1G 2W1
Phone:  519-824-4120 Ext. 2508
FAX:  519 763-8933

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