Front Cover
 Title Page
 Table of Contents
 List of Tables
 List of Figures
 The research approach
 Results and analysis
 Conclusions and recommendation...
 Literature cited

Group Title: Economics Report - University of Florida. Agricultural Experiment Stations ; no. 78
Title: The economic potential for increasing vegetable production in the Zapotitan District, El Salvador
Full Citation
Permanent Link: http://ufdc.ufl.edu/UF00027776/00001
 Material Information
Title: The economic potential for increasing vegetable production in the Zapotitan District, El Salvador
Series Title: Economics report
Physical Description: v, 63 p. : graphs ; 28 cm.
Language: English
Creator: Zimet, David J
Andrew, Chris O
Hildebrand, Peter E
Publisher: Food and Resource Economics Dept., Agricultural Experiment Stations, Institute of Food and Agricultural Sciences, University of Florida
Place of Publication: Gainesville
Publication Date: 1975, cover 1976
Subject: Vegetable trade -- Case studies -- El Salvador   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
bibliography   ( marcgt )
statistics   ( marcgt )
non-fiction   ( marcgt )
Bibliography: Bibliography: p. 63.
Statement of Responsibility: by David J. Zimet, Chris O. Andrew, Peter E. Hildebrand.
Funding: Florida Historical Agriculture and Rural Life
 Record Information
Bibliographic ID: UF00027776
Volume ID: VID00001
Source Institution: Marston Science Library, George A. Smathers Libraries, University of Florida
Holding Location: Florida Agricultural Experiment Station, Florida Cooperative Extension Service, Florida Department of Agriculture and Consumer Services, and the Engineering and Industrial Experiment Station; Institute for Food and Agricultural Services (IFAS), University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: aleph - 000304004
oclc - 03345782
notis - ABT0574
lccn - 76623467

Table of Contents
    Front Cover
        Front Cover
    Title Page
        Title Page
        Page i
    Table of Contents
        Page ii
        Page iii
    List of Tables
        Page iv
    List of Figures
        Page v
        Page 1
        Page 2
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
    The research approach
        Page 8
        Page 9
        Page 10
        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
    Results and analysis
        Page 20
        Page 21
        Page 22
        Page 23
        Page 24
        Page 25
        Page 26
        Page 27
        Page 28
        Page 29
        Page 30
        Page 31
        Page 32
        Page 33
        Page 34
        Page 35
        Page 36
        Page 37
        Page 38
    Conclusions and recommendations
        Page 39
        Page 40
        Page 41
        Page 42
        Page 43
        Page 44
        Page 45
        Page 46
        Page 47
        Page 48
        Page 49
        Page 50
        Page 51
        Page 52
        Page 53
        Page 54
        Page 55
        Page 56
        Page 57
        Page 58
        Page 59
        Page 60
        Page 61
        Page 62
    Literature cited
        Page 63
Full Text

The Economic Potential

for Increasing

in the


Vegetable Production
n District, El Salvador

r I


Traditionally El Salvador has imported vegetables from Guatemala
to meet domestic consumption needs. With the development of the Zapo-
titan Valley Irrigation and Drainage District, the potential for both
meeting domestic demands and exporting fresh vegetables is enhanced,
but must be accompanied by additional research and extension efforts
to be effective. Vegetables can compete effectively with dairy, sugar
cane and grains for the labor and land resources of the district, but
most vegetables produced in the District are not competitive with Gua-
temalan imports. Unless production technology is improved, extensive
import substitution as well as export of vegetables will be liadted by
insufficient labor during the critical months when the sugar cane, cof-
fee and cotton harvests are under way. Because of Irdirect labor ef-
fects, sugar cane and milk production tend to increase or decrease

Key words: El Salvador; vegetable production, marketing and
trade; enterprise competition grains, dairy, sugar cane, vegetables;
land and labor use.


David J. Zimet
Chris O. Andrew
Peter E. Hildebrand

June 1975


The authors express their appreciation to the North Carolina
State University USAID Project "The Potential for Vegetable Pro-
duction in Central America and Mexico" and director Richard Sin-mons,
and the Florida Agricultural Experiment Station, Institute of Food
and Agricultural Sciences for funding and administrative support of
this research. The project would not have been possible without
support from the department of Agricultural Economics at the National
Center for Agricultural Technology (CENTA), El Salvador and the Rural
Development Division of USAID-E1 Salvador.
Theresponsibility for any errors of fact or logic are assumed
entirely by the authors.






Vegetable Imports and Diversification. .

The Zapotitan Irrigation and Drainage District

Credit Sources . . . .

Marketing and Technology ......


Objectives . .... . ...

The Models .. . . . .

Model Refinements.. .. . .

Land Costs and Constraintp .........

Credit Costs and Constraints . .

Labor Costs and Constraints . .

Demand Constraints . . ..

Imports. . .... . ..

Farm Prices . . . .

Net Return . ..

Final Comment. .. . .


Production and Land Use. ....

Demand for Credit. . .

Employment . . ....

Income .. . ..

Imports and the Balance of Trade

Policy Alternatives ... ..

. . . . .







Vegetable Production. .

Dairy Production. . .

Sugar Cane Production .

Grain Production. . .

Summary ... ........

Limitations of the Study. ..

APPEIIDIX A ........ .

APPEIDIX B ..........,


APPENDIX D ...........

GLOSSARY ............





* .

* 9r

4 r


T ''

? t. r


; T

( *~

". ~F ;f

r t


1 Average monthly and annual vegetable imports, 1969-1972 ,
2 Traditicrnal months of highest and lowest vegetable retail
prices and highest national production. . .. .
3 Comparison of production costs of selected vegetables between
Guatemals arnd Sapotitan . . .
4 Coniparison of 1966-1969 average Zapotitan plantings to the
1972-1973 crop year in selected crops . .
5 A tableau of the models . .. ,
6. Areas and returns for selected enterprises in the Zapotitan
District. ... . . . .
7 Man-days available by month for employment within the
"Zapotitan District. . . . .
8 Summary of credit use (Thousand Colones) .. .
9 Labor available and labor utilized under actual conditions and
in the models . . . .
10 Annual labor use by product group under actual conditions and
in the m dels . . . . . .
11 Incoc.me to labor and management with comparisons under actual
conditions and in the models. . . .
12 Potential cl-: -iges in the agricultural trade surplus indicated
by the models . . . . ,
13 SLummary of the resL.lts from the models: Land use, labor use,
incoem and trade conditions ...... .. .
14 MINt.ithly competition between the Zapotitan District and Guate-
mala for selected vegetables. .. . .
15 Net return from port. . . . . .
16 Vegetable import values ,.. . ...........
17 Cptimal production in the Zapotitan District, non-conpetitive
model .. . . . . *




able .



1 Total land use in the Zapotitan District; actual non-com-
petitive model and competitive model with and without
sugar cane ........................ 22
2 Non-competitive model: allocation of well drained land in
the Zapotitan District to sugar cane, vegetable, bean and
peanut production . . ... .... ....... 3
3 Competitive model with sugar cane: allocation of well drained
land in the Zapotitan District to sugar cane, bean, vegetable,
tobacco and peanut production . .. ... 24
4 Copetitive model without sugar cane: allocation of well
drained land in the Zapotitan District to bean, pasture, ve-
getable, tobacco and peanut production . ... ... 25
5 Non-competitive model: allocation of poorly drained land in
the Zapotitan District to pasture, bean, rice, corn, sugar
cane and peanut production. .... . . . 26
6 Competitive model with sugar cane: allocation of poorly
drained land in the Zapotitan District to pasture, bean,
vegetable, sugar cane, tobacco and peanut production. .... ..27
7 Competitive model without sugar cane: allocation of poorly
drained land in the Zapotitan District to pasture, bean,
vegetable, corn and peanut production . .... 28


El .>tlvalJ:.'r with a land area of approximately 8,000 square miles,
is the smallest mainland country in Latin America. With an estimated
p..pul'-tfi:ion of 3,800,000 [12], the 1973 population per square mile was
471.7 persons, the highest in Central America. The population growth
rate is also high at 3.2 percent for 1972-1973. El Salvador has almost
no unused land and suffers from very high seasonal unemployment and un-
deremrplo;..,i.:-i,. Yet during the coffee, cotton and sugar cane harvest
season from November through February, there is virtually no unemp-loy-
ment. Unemployment during the rest of the year has been estimated to
be at least twenty percent [2, p. 3].
El Salvadorean production of annual crops has historically followed
the raii-'-dr-r season pattern. The dry season extends from November
tl-roug- April. The bulk of the producers who follow this pattern plant
cori, when the rainy season begins in mid to late May. When the corn has
matured, the stalks are doubled-over below the ears and the ears are
left in the field to dry. Beans are then planted and the bean plants grow
up the corn stalks as the corn dries. Following the bean and corn harvest
in ear-.y November small farmers with no irrigated land leave their homes
to work in the l..j'v-.'.sts of the three export crops: cotton, sugar, and
coffee. In late February the harvesting slackens and is completed by mid
Horticultural crop production also follows the rainy-dry season
patter-n. V.;:.-:tl.; can, however, be produced during the dry season by
usi g-U ir -i i. U season plantings on irrigated land are usually
made in October or n-,vemner and harvest of these plantings terminates in
March. Owing to higher incidence of disease on poorly drained soils,
horticulti.i-:I r:,'..-d..ction during the rainy season is limited to well drained
soils. If no irr.g.ation is available, planting does not take place until
June because of the ircgularity of the rain in .May which may be insufficient
to start a new ..:>.,. The rainy season harvest begins in July and is ter-
minated in ..: :t';-ri':r or October.

DAVID J. ZIMET is an economist with the Agency for International Developr.
ment in El Salvador. CHRIS O. ANDREW is an associate professor of the Food
and ReocELlr E.clnrml.i-i.rncs Department at the University of Florida. PETER E.
HILDEBRA]D is an economist with the Rockefeller Foundation in Guatemala.

Vegetable Tjill~crts ajd Diversificat ion

During the MIarch-Deceilberr period El Salvador imports large quantities
of vegetabl.:s primarily from Guatemala. In the 1962-1969 period, El Sal-
vador had a fruit and vegetable trade deficit rang-ing from 4.3 million
dollars in 1962 to 7.0 million dollars in 1968 [14, p. 75]. Monthly im-
port. variation is substantial for five :Iajor vegetable imports including
onions, potatoes, cabbage, tcviatoes, ai d carrots (Table 1).
Imports, retail prices, import volume and national production (Table
1 and 2) vary substanr.ially from month to month. The monthly variability
in import values and volumes do not necessarily follow the same pattern
due to price variability. These differences can be explained by differen-
ces in quantity, quality, production costs, marketing margins, growing
conditions, and/or differences.in transport costs between Guatemala and
El Salvador.
For many vegetables Salvadorean produce is of better quality and sells
at a higher price than Guatemalan produce. In July, El Salvador imports
lower quality toatr-coes for coming anrd processing and exports better quality
salad tomatoes. When El Salvador's production is low the quality of
,Guater mal1an produce is better than that of Salvador.
Usually no vegetable quality grading is required or accomplished in
either Guatemala or El Salvador. Tht.us, Guatemalan producers, wholesalers,
and exporters and Salvadorean trucker.' are not pressured to deliver good
quality to El S'lvad. .ean markets. One reason for this condition is the
attitude that it isuJ i.nece-iry to handle vegetable carefully because in a
relatively briie' time period they are shipped directly to El Salvador.
There are no comparable production cost figures for Guatemala and El
Salvador. Trade patterns suggest that Salvadorean production costs per
unit ndght be lower than Guatemalan costs per unit during parts of the
year. Although G.uat-emala has year-round production of most vegetables,
at times Guatelmala imports vegetables from El Salvador. Only cantaloupe,
watermTelon and tomato, however, show consistently high and regular ex-
ports from El Salvador to Guaterala. Using available information on
rmarketing losses and rudjjientary cost of production figures (Table 3),
it appears that El Salavador, through higher retail and wholesale prices,
pays Guatemala a preymumi for vegetables that Salvadorean producers could,
but do not, produce year-round.


Table l.--Ave'ae: monthly and annual vegetable imports, 1969-1972

Onion Potato Cabbage Tomato Carrot

AnniuLl Import:
CWT 35,388.5 162,091.5 156,136.5 43,593.0 42,696.5
Value (0) 120,044.50 418,803.0 186,613.70 68,800.40 79,083.80

Mont lily Average:
CWT 2,944.04 13,507.63 13,001.37 3,632.75 3,566.29
Value (0) 10,003.71 34,900.25 15,551.04 5,733.37 6,536.40

Hi,-e': t i.eM11lthly
'W 4,048.0 19,148.0 16,592.25 10,102.75 4,587.5
-b'nth October September September December May
Value (0) 20,713.10 48, 101.00 28,086.30 16,707.00 10,025.10
Month October January January December July

Lowest Monthly
CWT 1,733.75 5,131.75 6,882.25 294.25 2,838.5
Month April March April July August
Value (0) 4,571.50 12,993.50 9,962.10 459.50 4,660.10
Month March March April July December

Sources: Anual de Estadisticas and Noticias de Mercadeo Agricola.

Taule 2.---Tr 1itional months of hiJghest and lowest vegetable retail prices and
li~h-est national production

C i,-la:t-h of highest Month of lowest Months of highest
retail price retail price national production

Onion September April September-Feburary
Potato Fe. uar': Septenmber March-September
Cabtl-ag ']:'il ;ept.ermber Februar-y
Tomato February O ctober March
Carrot June Nlovember August

Source: Iloticaj'as de Mfercadeo Agricola.

Table 3.--Comparison of production costs of selected vegetables between
Guatemala and Zapotitan (Colones)

Produce t Guatemala Zapotitaib

Cucumber 0.53/box 0.54/box
Potatoes 4.43/cwt 3.89/cwt
Tomatoes 2.14/cwt 2.36/cwt
Cabbage 0,72/dozen 0.37/dozen
Onion 4.36/cwt 3.67/cwt
Carrot 0.10/dozen 0.34/dozen

Sources: al968 production budgets of Banco Agricola of Guatemala.

bThe production budgets used in this study.

Due to the problems of seasonal fluctuations in employment and vegetable
prices, and the balance of payments deficits caused by vegetable imports, the
Ministry of Agriculture has embarked on an agricultural diversification and
import substitution program. For example, in May 1972, the price of potatoes
had increased one hundred percent over the previous month. El Salvador ex-
perienced that month a U.S. $56,000 balance of trade deficit in vegetables
as a result of deficient national production. Because vegetables are high
yielding and are labor and land intensive [11, p. 5], the government has
made increased vegetable production an important goal of the diversification
program. Thus, the Ministry of Agriculture recently has been spending large
sums of money on vegetable production research and extension.

The Zapotitan Irrigation and Drainage District

An important part of the diversification policy is the Zapotitan Irri-
gation and Drainage District(henceforth referred to as the District) created
by Legislative Decree No. 214 on January 20, 1972 [8, p. 3]. The District,
favorably situated relative to the population centers of El Salvador is

1Its northwestern border is the Pan American High'hay which connects the
District to San Salvador, the capital and largest city, 30 kilometers to the
East. Santa Tecla, the fourth largest city, is 23 kilometers to the East of th<
District on the Pan American Highway. Forty-five minutes from the District
to the West is Santa Ana, the third largest city. The southern border is the
highway to Sonsonate, the fifth largest city and about twenty-five minutes from


ccniprised of 4,490 hectares with approximately 4,000 hectares being
irrigated. Road construction within the District was completed in 1970.
The drainage system was functioning in 1971 and work continues on the
irrigation system.
Fr-om 1947 until February, 1971, eleven studies concerning the Za-
potitan area were completed. The first ten were designed to determine
the aLricultLnual potential of the region. Year-round horticultural pro-
duction was highly recommended for at least some of.the land, particularly
the better drained, sandy and sandy loam soils. The clay loam and organic
soil types were recommended for horticultural production only when drainage
during the wet season and irrigation duri-ng the dry season are possible.
The most recent study discusses economic and social problems in forming a
district instead of the potentials and technical aspects of irrigation
and drainage.
Before the Zapotitan area was drained prior to 1972, vegetables were
produced during the dry season, and corn and rice were the major crops
during the wet season (Table 4). Vegetable production had always been im-
portant in the Zapotitan valley; it was hoped that irrigation and drainage
would significantly increase vegetable production. Post drainage sugar
cane acreage increased from 242.0 hectares in 1968 to 693.3 hectares in
1972, vegetables acreage including fresh corn increased from 224.0 hec-
tares in 1968 to 456.0 hectares in 1972 and improved pasture increased
from none in 1968 to 450.0 hectares in 1972. There was a sharp decline in
the area used for natural pastures from 1407.0 hectares in 1968 to 506.5
hectares in 1972.
Alt-hough the District does not produce as many vegetables as had been
anticipated, it is the single most imip.orta-nt vegetable producing region in
El Salvador. In 197C thi; c.pc itan District erncormpassed a:pproximarhtel:y 24%,
84.i, 31', 43, and 30% of t aatoes, potatoes, cabbage, cucumber and sweet
pepper, respectively, planted in the entire country [11, pp. 12, 25, 29, 30,
Thus, the administration of the Irrigation and Drainage Division be-
lieves that the hic-J investment in-voclved in creating the District requires'
that the land and water re.socLes be used more intensively. They suggest
the production of crops sucth as vegetables, that could be harvested at
least three times a year by using irrigation to maintain year-round pro-

Table 4.--A comparison of 1966-1969 average Zapotitan plantings to the
1972-1973 crop year in selected crops

1966-1969 Average 1972-1973 Crop Year
Rainy season Dry season Rainy season Dry season
Vegetables 169 224 515 456
Corn 88 3,018 1,172 100
Sugar cane 242 242 693 687
Rice 802 --- 500 ---

Source: De'-pat.ritent of Studies, Division of Irrigation and Drainage.

It is also generally believed that vegetable production in the District
is more profitable than other crops and livestock alternatives. Furthermore,
Mvli-istry officials believe that if a series of restrictive conditions were
removed then more vegetables would be produced year-round to decrease or
eliminate imports. Potential restrictive conditions can be placed into three
main categories: credit, comuerical or marketing problems, and extension or
technical problems.

Credit. Sources

The Zaipocitci-i C:.operative (CODEZA) and the Agricultural Promotion Bank
(Banco de Fccmni-nitc Ag~-opecuario), a governmental agency, are the District's
major sources of credit. Comminerical bank and credit association loans, gen-
erally long term (a year or more) and at 12 percent interest annually, are
also available to the land owners of the District.
CODEZA lends money to land owners in the District that have been mem-
bers of the c.. erat.ive for at least three months. The CODEZA interest
rate is 12 percent -annually and production loans are due immediately after
the prcducCt w.luld normally go to market. Thus, because storage is not en-
couraged, credit policy enhances seasonal price variability.
The Aegicultural Promotion Bank makes eight percent interest loans to
any land user in the District. The majority of its clients are renters and
small land owners.

Credit available from the Agricultural Promotion Bank and CODEZA is
not fully utilized. The Agricultural Bank for example had 0385,000 (one
Colon = U.S. $0.40) in loanable funds available to the District in 1972,
and it loaned only 0280,000. One reason for this situation is that cam-
pesinos are not accustomed to institutional credit and often request loans
at the "last minute". Thus, many loans are not granted due to insufficient
time for authorization and processing. To overcome this problem the Agri-
cultural Bank is attempting to jointly plan a credit program with each bor-
rower so loans can be available upon the request.

Marketing and Technolc'g,,

Zapotitan crops are marketed inthree major ways. The first is through
six rural assembly points located within the District to which a producer
delivers his produce. At these assembly points produce, only occasionally
graded and sized, is sold to buyers who come to the centers. A second method
involves individual sales represented by: 1) producer delivery to the market;
2) buyers going directly to producers; and 3) producer contracts with buyers
including specified quantities and prices. The last practice is least common.
A third major sales method is through cooperative marketing. CODEZA sells
produce for its members, generally acting as a sales representative and agent.
A buyer, for example, will approach CODEZA representatives requesting a cer-
tain quantity of a particular product. The cooperative gathers the product
from its members, arranges for the transfer to the buyers, and then pays the
members who contributed produce, keeping a fee for itself. CODEZA also
operates a low volume open air retail market during the main dry season
harvest period.
Market fluctuations substantially influence the demand for small farm
credit. Producers who have had their products rejected during the height of
the traditional dry season ip:rcduction period, are reluctant to request credit
for vegetable product ion during any part of the year. During this peak pro-
duction period buyers often purchase only the highest quality produce. A
product that is rejected during this period might readily be accepted during
another time of the year. Thus marketing problems hamper the extension
agent's ability to promote year-round vegetable production

The combination of good internal transport facilities and easy access
to highways which connect the District to the rest of the country greatly
facilitate marketing. The major roads, although unpaved, are all weather
roads and connect to the country's rrajor highways. Hence, for the District,
roads are not presently a restriction to further development. Without pro-
per technical assistance, producers are likely to face crop failures due to
disease, pests, and poor drainage problems which are common during the wet
season. Because of these problems producers plant crops they know are
least subject to disease and marketing problems.


Is increased vegetable production in El Salvador the most promising
means for improving the present-low rural income and employment situation,
while improving El Salvador's agricultural balance of trade? Little is
known about the relative profitability and competitive situation of vege-
tables within the District, the District's ability to compete with Guate-
mala in vegetable production, and the conditions necessary to make year-
round vegetable production successful.


The primary objectives of the study were 1) to determine the feasi-
bility of expanding vegetable production and 2) to ascertain the effec-
tiveness of doing so as a means of reducing rural unemployment and in-
creasing rural income. The Zapotitan District was selected as the study
region since it was the area with the greatest potential for expanded
vegetable production. Specific objectives of the research were to specify
and analyze:
1) Present agricultural production patterns in the District.
2) Seasonal production budgets for crop and livestock enter-
prise alternatives in the District.
3) The amount of credit available to the District and the
credit requirements of the specified crop and livestock
4) Present employment and income conditions in the District.

5) The feasibility of year-round vegetable production.
6) Present vegetable import levels.

The Models

Two linear programming models, termed competitive (direct competition
with Guatemala) and non-competitive (no direct competition with Guatemala)
are used in the research. The objective function of both models is the
maximization of net returns to management and resident labor in the Zapo-
titan District. The objective function was formed by summing the monthly
farm sales value (quantity times price by months) less production and/or
import costs. The local (not migratory) labor costs of production were
then added to these estimates. Demand, labor, credit and land constraints
were specified (Table 5).

Table 5.--A tableau of the models

Competitive Model Non-Competitive

Production Import Production
Conist rainr/0Objective Function + + +
La-Sd + 0 +
Labor + 0 +
Credit + 0 +
Dealna-id + + +

A "+" indicates a positive value or resource use and a "0" indicates the
resource not used.

The activities in the competitive model which generate management and
labor inc.:nie are i:prct...iction and import (Appendix A). This model also contains
two separate situations based upon the inclusion and exclusion of sugar cane
production. In the non-competitive model only production activities generate
income (Table 6).
Salvadorean demand for vegetables can be met by either production and/
or import in the competitive model. In the two situations of the competitive

Table 6.-Prices and returns for selected enterprises in the Zapotitan District.



Net return to
and labor

Ayote (a Sqi.ias.-)
Guisquil (a squash)
Sweet Pepper
Pipian (a squash)
String Beans
Processing Tomatoes
Salad Tomatoes
Baby Corn
Fresh Corn
Sugar Cane


per cvi-



- -------Colones------------
800 275 525
1680 383 1297
1800 531 1439
1729 460 1269
1080 257 823
4200 2757 1443
4000 514 3486
4200 470 3730
2002 852 1150
3600 308 3292
5808 2162 3646
5808 2768 2322
3800 810 2990
3000 1389 1612
720 178 542
3200 885 2315
1120 294 826
1920 684 1237
2100 420 1680
2250 420 1830
1501 393 1109
840 203 637
470 187 283
660 234 426
600 321 279
850 426 424
2177 1403 774
1921 851 1070

1January = 1, February = 2, etc.







model producers of the District are considered to be purveyors who are
responsible for supplying El Salvador with specific amounts of all ve-
getables. As such, to meet this demand the district can produce and/or
import vegetables supplying the required amount of a vegetable product
at the greatest income relative to the production or import of other ve-
getable and nor-vegetable products. For example, if it were more pro-
fitable to produce cucumbers in July than it is to import them, but their
production used resources required for cauliflower production which were
relatively more profitable within the District than cucumber production,
then the competitive model permits importation of cucumbers and production
of cauliflower.
Thus, a model which includes imports only implicitly is also studied,
In the non-competitive model it is assumed that the supply of any commodity
not produced in sufficient quantity in the District is imported but earnings
from imports do not accrue to the District. This model determines the op-
timum product mix for the District, given the constraints and prices used.
The solution of the non-competitive model is more relevant from the farmers'
point of view because it allows for optimal enterprise combinations within
the District.
In both models, it is assumed that production in the remainder of the
country is static so that changes in supply from the District directly af-
fect foreit7-i exch-ange. The effect of an increase in vegetable production
in the District, however, might be at the expense of grain production, for
example, causing an increase in foreign exchange expenditures for grain
and perhaps worsening the overall balance of trade situation. Thus, the
total effect on the balance of trade of the various alternatives is analyzed.
The following are the basic assumptions upon which the analyses are
1) Constant prices: the prices of inputs and outputs do not change
with cha-nges in quantities supplied or demanded with respect to
the region.
2) Fixed derm-nd: a deficit in quantities lprduced compared to
current demand must be filled by import and represents a
loss in foreign exchange earnings, while an increase in pro-
duction over present levels substitutes for imports.


3) Import v.aria tionis are effected only by p:rou.ictiocn- in the
District wliile prc:uction in the- rest c:f El Salador re-
mains constant.
4) Ei:,:rt.:; arie not affected by pr':ductin in the District ex-
cept for su,,ar cane, a speci'.l -.e. This requires that the
uppIer lni.ts on production be set equal to domesticc demands
which :,ssuieis no export.
5) The sul:Ipl of cherncals, fertilizer and seed is unlimited.
6) FProduction rotations occur within one /ei r.
7) The level of technology used in the iapoduction budgets will
be in ,eneial use in 1975, and thus 1975 is the target year.
8) An app-'opriate objective fuLrctioIn to ila'.iize income to the
peo'-'ile of the area is return to mrTlana.ement (as a residual)
plus local (not rndiPratori') labor ai..rin;. This corrbination
neithli'r favors inaiagementl to the deti-"uimeluct of the laborer,
nor labor (er~mploznyment) to t.ie dectrimenit of tihe land owner.
This assuNmptionr does favor the mc':,? labor intensive crops
relative to capital intensive crcps, a situation realistic
for the retio-in.

i.lodel Re- f i-'rnemi, ts

Ea-ch en-tepr--ise, e;.cl'i.Aiin$ fruit;, sui-.:aI c:rane, and daii'y has several
production bud:-.c.rt, f ch corhr:csr-ondii,-n: to a ditfer-,;ril, planting date. The
vegetables, e;x.clludiI-g~ c.abbae, lettuce, and o.iio'ns, have six bui,.Jts each,
reprepsentfing a plant-tirlng every other rimnt-ti to account for continuous plant-
in-Ps and ti:rl'e full crops per y'ear. Oni:n, are rresened only five
tii~ies, with the April plainting excluded because of ti : phoropleriod sensi-
tivit:,- of the varieties used in El 3alvd.:_dr. Bears are represented by
five p:lajtirng dte.., corn by four, rice by si-:, an:i tobacco by three.
ITe budgets Ear': based ufpI-i, iiiformia;in eI,'plied by the e::tension azrents
of thle DistiL and the lDepar'tiient of Re..arc'h of the rDivision of Irri-
gation and l-r-. inOf Ministry of Aric.ultC'..i'- ,. Most of these budgets are
for Oct.ober or ilovemnber onl.y, yet production :periments demonstrate that
input levels ofter- are not consistent with yields. TILus, the basic bud-
gets were revised tulen necessary to c'irrespil-.:nd to seasonal plantings.
Monthly pr.:di.ict price and input variations were specified to make the
proper revisions.


All inputs, such as land, labor, credit, fertilizer, pesticides and
seed, represent direct costs based on the most recent price available.
Realistic levels at which fertilizer, seed, and pesticides are used are
set at amounts which a farmer would be most likely to apply in 1975 and
not the optimum amounts determined by production experiments. Since
land, labor, and credit are available in limited quantities, they also
form constraints. The costs and constraints used in the models for
these resources are discussed below.

Lan.d Costs and Constraints

The amount of land available is specified on a monthly basis with
drained and poorly drained soils considered separately. Well drained
land in the District has an upper limit of 1035.66 manzanas (one manzana =
.7 hectares) for each month, and the upper limit for poorly drained land
is 4678.84 manzanas for each month. Rainy season vegetable production is
limited to the well drained land, but dry season vegetable production is
possible on either soil type. Production of livestock and all other crops
is permiitted on either land type.
The rental cost of land regardless of type is 0300.00 per manzana, per
year, a fee fixed for the District by the Ministry of Agriculture. Land
rental fees and use requirements for a product are adjusted by the product's
l.:n-th of growing season. Because the seedbed and transplant practice is
ccrrmmc'i, this method is represented in most of the production budgets. Thus,
the land requirement for a crop that used a seedbed and transplant operation
is reduced, but corresponding labor cost increases are present.

Credit Costs and Cc':instraint.s

Credit, like land, is separated into two groups. One group represents
the credit available via CODEZA and commercial loans, at a 12 percent in-
terest rate. The other represents the credit available through the Agri-
cultural Frocnotion Bank at 8 percent.
Credit requirements in the models for an enterprise are set equal to
60 percent of the operating costs plus interest charges. The credit year
is divided into quarter with each production activity using credit during

the ai_.p,>.r'i-ate quarters.2 All credit is initially allocated to the first
q,.uart.'.j.'r -i' ,.1,',i.".C] cr-i-it, can be transferred to -he second or suc.cessiv'
quarters at no cost. Loan repayment is another sourc-.' of credit for the
se.c:rI,]j third, and fourth quarters. A crop with a ahort. :rowing season,
e.g., :-ad..-:he, can ignerate credit for the quarter irniediarely followingi
the quw.lirc.' in which it is required. For most products, however, credit
rFgeer:-;r ,: ion d:- e.t- o..:t occur until the second quarter after initial use.
A credit :dli. ijii:in, act iviity in the fourth quarter transfers unused credit'
to the fo.llo.in. yer.
To a.-.oid :r.".-:ai;ir'n all production activities, the 8 percent funds
can be 5aufi.La,'te,' by the 12 percent funds at an additional cost of 4 per-
cent. This tl.rrf.;fer of funds can occur only during the first quarter,
but the cr:'-ii can be used in any quarter because of the inter-quarter,
no--oI- transfer activities. Thie interest payment required for an 8 per-
ce-nt i~-an is cli.-dLcted form the Er-oss return as a cost. Interest payments
are c ni .:,LC:'! to be part of the credit requireire~nts; the credit available.
to the District throu.:)Llg the Agricultural Eard is increased by 8 percent,
from r?58.0,000 to 0626,400, thus introeduc 3-g the 8 percent interest con-
straint and .-cidi-; double coLunting. Similarly, thi-e credit available at
the 12 i.er.- : t interest rate is increased form -5,'27,500 to 05,;6i,700.
Of t.l- 05,'-'.7,500, the a Jcoui-,t available throuthi C'ODE.A is j4217,500. 'The
r=mnaiirn-gi ,.,000,00 is an estimate of the credit that is available to
the Dic:rict hir-.i-t commercial loan. If necessary, the 12 percent cre-
dit c'r-,t-ra-,ir can be ifrcreased in the models to deteniine approximately
how much .-redi't is ,:an.:-,:led by the District to rraxiiize the annual net
retur'-i to il-, :_i ,1 la-ageient.

ai:,or Co,-s _nd C'n straints

Unl;e land and credit, labor is assumed to be t-omnogenec'us and 12
monthly lTi:,,'r' c,:..itrafirts are calculated in number of 'man-days per :ronth
(Table ). To f',b -'ri ti-h constraints, the predicted number of econoruically

2ll,'e .-rranrIgne-,its correspond to the actual :-ituation described by
the Arici.i. uiral a:, CODE.A and the extension agents in the District.


Table 7.--Man-days available by month for employment within the Zapotitan

Month Work Days Man-days ava:lablea

January 23 46,529
Febru 22 44,506
March 25 50,575
April 20 40,460
May 25 50,575
June 24 48,552
July 25 .50,575
August 23 46, 52
Sefpte rrber. 23 46,52
October 25 50,575
INovemberi 24 48,552
De.e-nlber 20 40,460

'023 laborers multiplied by the work
of man-days available per month.

days per month equals the rninber

active people in the District for 1975, reduced by 10 percent to account
for illness and lac: of mobility due to in l.--. fect worker i:,rKc.l,-'e, is
Multiplied by the number of work days per month.
All labor other than labor required for the sugar cane harvest is
as.umled to be from the District. Labor is migratory dur'inl the sugar
cane, coffee and cotton harvest season and floiJ.s into the District to
cut sugar cane. Labor use in the models, bi-;.;:i on i:", nL --'i. iI.:'v-mLeler
1972, wa as follows:
Labor From Within the District

All enterprises exlcuding sugar cane
Sugar cane

SLabor From Outside- the Di.-'_rit
Sugar cane

Total relquireld.

34,000 :iLbn-iayj
14,000 man-days

48,000 man-days

16,000 man-days

64,000 man-days

The l3bcr coeffi-cients used in the model for the sugar cane harvest are
fority-seven percent (14,000/30,000 inanr-days) of the man-day requirements
for harvest. Thls condition pIr--vents the utilization of migrant labor for
tasks other than the si.Lar cane harvest and is reflected in the objective
function. All labor -requiremelnts represent costs to management, but only
47 percent of th'i- labor income for the sugar cane harvest is included in
the objective fu..un ctin.
Coefficients of the objective function are calculated by adding labor
ccsts (also viewed as returns to labor) to the net returns to management.
Although the addition of labor costs to the objective function is not in
strict accor1dance Iwith rrmanagerial profit motives expressed in economic
theory, labor co,,sts are included because of the desire of the government
to increase employiimenit. Also appro:-;i Sjtely one-half of all land owners
in the District suipp1ly their own' labor in which case labor and management
returns are one arnd the sami-e. Labor costs are calculated at the rate of
0'I. 857 per man-cby, exceeding the minimum Salvadorean agricultural wage
of 02.75 by the .amouinit allowed for over-timne.

Deman-d Constra int

The vege1:ble dem-nd' constraints are equal to present production from
the District plus total nl:p.-irs. To juaranitee that Salvadorean demand is
satisfied by production and/or ,ih..rt, the constraints are qualities,
fr:rcing a comparison between the two alternative supply sources.
Baby corn production, an exception, is limited only by an upper
bound. Baby corn'is ai:pprc::iiately two inches long with tender kernels
anJd a cob vjwicl-h is entirely eaten. Eecauise baby corn is a specialty
product, with a. limited fresh iaorlet demand, its demand constraints are
based upon the ca.-:l::it.y of the largest baby corn processi-ng plant in El
Salvador. The corn is gro~~n from a special seed, H-101, which is pri-
marily for t.hi purpose. The imoint-ly. capacity of tl-e processor is 2,000
twenty pound boxes. he constraint places an upper limit on production
which is slightly g-eater trhan the capacity of the processor to account
for limited fresh market salrs and output from a processing plant. Baby
corn is not imported.



AlthouLji non-vegetable products can be imported, this is not ex-
plicitly included in the models. The non-vegetable products are to-
bacco, citrus, peanuts, rice, beans, corn, plantains, dry-lot and pas-
ture milk production, and sugar cane. Grain production is not con-
strained. Citrus, plantains, and tobacco production can be less than
but can not exceed their present production levels. Milk production
is not limited because of'the government's concern to increase milk
production and protein consumption. Since Zapotitan is well situated
relative to the major Salvadorean markets, milk can be shipped to mar-
ket without risk of spoilage. The consumption of peanuts forms the
upper limit for peanut production. Present production levels form the
upper limit on sug ari cane production. Because cane did not enter the
s, lution of the competitive model on the basis of the crop's net re-
turn, it is forced into the second solution at the present level of
production. The production estimates used in the model are seasonal
production averages for all crops from November 1970 through October 1972,
Production data for this period were collected by extension agents and
the Development and Research Division of Irrigation and Drainage.


In order to compare the District with Guatemalan vegetable sources,
import activities were included :xplicitly in the two situations studied
under the competitive mii -xel. :liqjot data were taken from two government
publications [3, 4]. In the competitive model, the District receives the
farii price for a product sold no matter which source (import or district
production) is used to supply the market. This situation holds because
oC the assumption that the District would supply the entire market but
fro'm the least costly source. Inclusion of imports directly in this
r.dei provided an internal r.o r:etiLive or market share solution. The
net return for import-:,i is equal to farm price less the cost of import.
The cost of import differs from the cost of production and is equal to
the monthly per unit value of import2 plus 10 percent for transportation

The value is calc'l.dit.ed by dividing the total average monthly value
of imports (as reported in the 1971 and 1972 monthly editions of Noticias
de k'Trcadeo Agri6ca and the 1969,/70 and 1970/71 editions of the Anruario
le Estadifticas Ag-roIpecuarias) by the total reported volume, yielding the
per unit value.


costs. When detemiid ing the net r"etitrdiis for the District, however, the
net reta.uris from imports are removed.
Quality of pr;ldu ..e imports, as well as value, was determined rela-
tive to produce quality from the District. If pi..duce from tihe District
had proven inferior to CGuatremala produce, a price reduction in the Dis-
trict would have been necessary to nma:e produce from the District compe-
titive. Information on quality was obtained from Salvadorean whole-
salers and retailers and personal observation in El Salvador and Guatemrala.
It was determined that produce from the District is as high in quality as
the Guatemala produce.

Farm Prices

Salvadorean farm prices have not been recorded or reported to any
great extent. Fan i.prices are reported in the six production budgets
collected for each for the production period to which they pertain. Two
"' methods were used to determine fann prices for the remainder of the year.
The first method employed the wholesale prices of either San Salvador or
Guatemala City as bases for comjparisons- with prices specified in produc-
tion budgets. The farm price given in a production budget was used to
form a ratio with the wholesale price for the har-est months in the San
Salvador central market, as reported by the Ministry of Agricult_.ure.
When the Salvadorean wholesale price was u Jrailable, the Guatemala City
wholesale price was used since Salvadorean prices are highly dependent on
Guatemalan prices for nmny Iproducts. The ratio was then multiplied by the
wholesale price of the harvest month in question, giving a farni price es-
timate. This method assumed a constant marketing narin.
A symbolic representation ot the price generatiorL method is:

j X aiq Piq
P aij
where FPIJ! the fani price of product i in period 3;

WF aij the wholesale price of product i in period
j in cou'intrJ a;
WPi = the wholesale price of product i in period
.aiq q in country a;
FF = the farn price of product i in period q;
a = Guatemala or El Salvador,

and j q1.


Interviews with wholesalers were also used to determine farm prices.
Wholesalers in the central nrijI_. in San Salvador were asked how much
they usually paid for a given product in a given month. Since the whole-
salers _peciali.e in a small group of products or in a single product,
the info.-irmation obtained in this manner was judged to be reasonably accu-
rate. The fanr price was multiplied by yield to determine the production

Iet Retu1i

Gross return less product acquisition costs equals net return to
management. The costs of product acquisition are equal to the total cost
of prloductioni or the cost of import. For each pr,.luction activity labor
costs are added to this net return figure to determine net returns per
maneana to labor and management in each growing season. Because imports
require no resident labor, the net returns for imports are the coefficient
used in the objective function for the import activities. In reality, the
returns for imports do not accrue to the people of the District. To calcu-
late the actual return to the District the sum of the net returns for im-
port is subtracted from the maximized net return figure after the solution
is obtained.

Fin' al Comments

When imports were e::plicifl.y included in the competitive model, all
vegetable demand cosii.tra-its, e .cl'..din,' baby corn, f.,i'rm equality constraints,
and all the non-vegetable demand c.,onstra-ints, including sugar cane, form
upper bound inequalities. A variation of the competitive model forced sugar
cane production to be equal to its present level. The non-competitive model
did not e.:plicitly include ve--table .ijip.rts. The vegetable demand con-
straints of ttio.e :d'i:uict.s iich are Inot I:'rodu'e; d in the competitive model
were changed to inequalities with an iuper limit equal to the levels at
which the previous co'intrair li were fi:-:,-d. Left. Lunchanged on the second
model were the vegetable demand constraints for those products which were
produced at their upper limits in the competitive model. Sugar production


was forced into the solution of the non-competitive model, and the other
non-'ivege table demand constraints formed inequalities. It was assumed in
the non-c::ori peitive model that all vegetables not produced in the solution
would be imported, but incciii accruing from vegetable imports was not in-
cluded in the objective function of tle rm.:del.
To deteTrine whether vegetable production is profitable relative to
other enterprise alternatives, net returns from the budgets were speci-
fied. The net returns to labor and management per manzana for all speci-
fied crop and livestock alternatives were used in the objective function
of the non-competitive model to determine the relative position of vege-
table production in the District. The competitive model then evaluates
the relative position of District and Guatemalan vegetables by including
imports in the objective function.
:liployment and income impacts are e;,xamired by comparing the estimate
of present income and eTmployI,-ervnt in the District and total vegetable im-
port values to the income, employment and import levels in each of the runs.
Although imports are excluded from the non-competitive solution, it is as-
sumed that residual needs for coirricdities not produced in the District are
imported. Thus, an Jimport value of the non-compietitive model can be calcu-
aated for coarnl:paison with results of the competitive model.
The profitability ,of vegetable production, credit use and availability,
and the role of sugar cane pr1odu'ctioni relative to vegetable production were
directly available from the models.


The results of the models show how changes in assumpltions and policy
objectives affect product iliii, land use, employment, income, credit, im-
ports and the balance of trade. A comparison of the non-compettitive model
wii:th the actual situation is presented first. The noi-comrietitive model is
then compared to the comp-etitive model in which vegetables from Guatemala
compete with those from the District. Finally, the effect of no sugar
cane production is studied in the competitive model. When appropriate,
the competitive model is also corqared with the actual situation.

Production and Land Use

L.sni.j is used more fully and uniformly in the non-competitive imdel
than it is currently utilized. This result is indicated by a land use
ii.e:-: of 87 percent in the model as compared to 62 percent at present.
Ti.e major cause for this difference is an increase in pastures for dairy
pr..:.ductiorn to 6.8 times the current area. There is also an increase in
vegetable production during the latter part of the dry season and during
the entire rainy season. Grain production decreases in the non-competi-
tive i.del. This causes greater uniformity in land use due to an increase
in v-getable production, the most profitable enterprise alternative. The
decrease in grain production permits more land to be used for the less
labor intensive dairy enterprise which requires land throughout the year.
V:,-raci: corn, rice, and dairy production decrease with conirpeti-
tion from Guatemala. The decrease in vegetable production, occasioned
b:' an in-a;:-,ii;y to cli,:ete with Guatemala, releases labor for the produc-
tion of beans, the most profitable and labor intensive of the three
grairns considered. Thus, the large increase in bean production, which is
se: s.or-l3, causes a decrease in corn and rice production because these en-
t:rpi'i.ses do not compete favorably for labor. Pasture production also
d.-cr"e:ses because this enterprise competes less favorably for land (Figures
2, 3, 5, and 6). Less land is used in the competitive model (an 80 percent
l'nld use index compared to 87 percent) and there is greater variation in
mincrthly land use than in the non-competitive model (Figure 1).
When ,I.I-': cane is not produced, land use becomes less unifonl, de-
c iin-,L- shl-r:-ily from January il~.tih-& June (Figure 1). Land use intensity
in the ,rj: i. '.: i-.,dec.lines to 76 pe-rcent .*.irl-:.rit a,.igar cane from 80
percent with :.u.i'-" cane. This decline is cauIecd by a decrease in pastures,
alfhoLut_ seasonal bean and corn production increase (Figures 3, 4, 6, and 7).
Bean p'.-ll u.: i ion increases because labor is no lo-er required for the sugar
cane hslre.st, [*Ii_-til ihlg bean plantings at times that would otherwiise uti-
lice labor ILu'i tie ugar- cane harvest prio,. The increasess in bean
prodLccti io,, c.":.'-,iJ ,-i ,y the labor release when augar canei is r ot, produced,
displace.. I.,nJ .rii p:,ist.ue production. Vegetable production remains the same.

'TI-he- land use ;index represents ranzan-a-niornt.hs used divided by manzana-
months available..





5100 \4

5 compeu I ce r\
4800 \ / -\
\ I
Com etit t e
4200 .with s can


3600 Compt !t ve I
3300without sugar cne
3300 -



180o -




5 6 7 8 9 10 11 12 1 2 3 4 5
---------- o flHS ------ --
Figure 1.--Total land use in the Zapotitarn District: actual,
non-crmpetitive model, and competitive model with and without
sugar cane.











PEAI-JTS .... $

6 7 8 9 10 1 112 1 2 3 4 5
----------FNDTl S-i--------
Figure 2.--Non-competitive model: allocation of well drained
lan-d in the Zapotitan District to sugar cane, vegetable, bean
and peanut production.

Mzs. Available
-..../ '.. GRAND TOTAL






2.- -.4



..- |- i 0 H

MZS. -
1-. I r- v 7\
890 \

-,, /

5/ \
] uIfriG/ CANE

Iri eLmewm

bean, vegetable, I tobacco d peanut proctio
II \ ___

Iot ,-.: ,ECETABLE SiJBT,. TAL/ '

Firltr'e 3.--Colnpetitive model with sugar care: allocation of
well chrained land in the Zapotitan District to sugar cane,
bean, vegetable, tobacco ar-d peanut production.



780 \

66 .


1 7!i.L I

ell dra* I r past

?2o table, tobacco and peanut prod
i \
n'1 .J O

l,.e~e a le: tobacc cd peaAut prouct oio\
'l 1' / p

-."egetab tobac co and ean t product io-n.








II A u ~ fc '* *


Al --'-,

57 8 9 1 11 12 1 2 3

4 5

Figure 5.--Non-ccmpetitive model: allocation of poorly drained
land in the Zapotitan District to pasture, bean, rice, corn,
sugar cane and peanut production.






477.1 -


175'% BEANS

-i' ,

01 1 CA1E .

Pigre hl.--Cop etitive model with sugar cane: allocation of
--ool--- drained land in the Zapotitan District to pasture,
vegetable, sugar cane, tobaccoand peanut production.50
| 200o-1
S1750 .BEANS

"- *, .. /

I /
250.1 \ S. i
I ,. ~, ,, /__ _____ _
|l" 0l"l~' -- -- -- -- -- -I'-- ^..ru -'-.- -^-^-
^,Ii, re b.--Comrpetitive model with sugar cane: allocation of
-*oc'-ly drained land in the Zapotitan District to pasture,
bean-, vegetable, sugar cane, tobacco and peanut production.

i _-,--.- A


5- CO,. --


M -. i ,'H S

'II,' I I

0'-0 11 12 1N 2

-. i

T iure 7.--Competitlve model without sugar cane: allocation
) poorly drained land in the Zapotitan District to pasture,
Dean, vegetable, corn and peanut production.


Thus 'n .it-._.i the presence nor absence of sugar cane production affects
land used for vegetable production and the ability of the District to
coini.ei-.- with Guatemala vegetables.
Land use intensity is greater in the competitive model with or
without. sugar cane than at present primarily because of the large in-
crease in pi.. i-,-'rs. Vegetable plantings, although less than total cur-
rent I..v.i,. on an annual basis, are moreunifonnlyspread throughout the
year in the models.

Demand for Credit

Alti .)ugh the total amount of credit required for each alternative
within the :lcJd.l varied (Table 8), in no case was all of the available
credit utilized. Based on net credit used, the models required from 14
to 39 p:.--,t more credit than the 01,007,500 supplied by CODEZA and the
Aric.ultlural :yro.motio i Bank in 1973 but falls far short of utilizing all
the c,.:,;i' im. i.al credit available. Since the relative quantities of credit
var:,' direT-ly with area, the pattern of credit use is the same in all of
the models. The highest use of credit is during the first quarter fol-
lowed tb. the fourth quarter.

Table 8.--..u L.:u,. of credit use (Thousand Colones)

Non- onrpetitive model
N -on-~
competfitive With sugar Without sugar
model cane cane

1 1,063 995 962
2 320 175 175
3 .1 54 225
4 773 561 578
Total used 2,674 2,265 1,940
Less gen-- ate.i;e 1,281 1,095 803
Ilet us 1 1,393 1,170 1,137
,_ ,,,_, ,_- ,f, ,. ,,,, .. .. .. .



Both models utilize more labor than is currently emrployed, but the
employment level remains relatively : low (Table 9). Much of the increased
employment is generated by the large icreat.e (apprcoxi.niately 2,000 manzanas)
in pasture for dairy production, even though it is a relatively low labor
intensity enterprise.
Annual employment in the non-coiiji'eti; ive model is app.ro:.ximately 22
percent greater than current emplcinent depicted by an increase from 59 per-
cent to 72 percent in the labor use intensity index. This increase is
caused by greater vegetable and da-iry production which offset a decline in
employment in grain production. AplproxiiLmtely 11 percent of the labor in
the District is employed by grain producLion in the non-competitive model,
yet at present over one-half of'the labor in the District is so employed.
The percentage of labor employed in vegetable production increases from
approximately 15 percent to 40 percent (Table 10).
Seasonal employment from January through IiT.rch and from June through
August is much greater in the non--competitive model than at present. The
differences are caused by increased vegetable production in the late dry
season (January-March) and in the rainy season as well as the large increase
in dairy production.
Lower vegetable production in the competitive mcrdel compared with the
non-competitive nrdel creates less labor demand from February through July
and in December as shown by the lai:,or use index. in Table 9, The decrease
in labor required for vegetable production releases labor for increased
bean production whl-ich has relatively high labor requirements, although
less than for Vegetables. This shift in the enterprise mix due to labor
availability requires more land, causing a decrease in pastures for dairy
production in the competitive model.
In spite of greater vegetable p.roducction in the non-coripetitive model
than in the competitive model, the differences in monthly labor require-
ments are minor during the last five months of the year. This is true be-
cause the impact of sugar cane Iproduction on labor requirements is greater
than that of all other enterprises.

The index of labor use intensity is specified as man-days used divi-
ded by man-days available.

Table 9.--Labor available and labor utili zed under actual c:_-liti:-ins and in the models

Co rn itiV l-l

avh-.--:l In
the mniodels

, i I. -


- ,,571
'- .t --


o, .60

Actual as
percent of
i.--z:i ,.:2

T,: n-,:csC,':r it -e: model

ibr..-days used Percent



ith L,- ." cane

Man-days used Percent



;ir t,'-r,:r. sugar cane

T_,-:i~Tis used Percent



TCITAL 329,92)4 5r24,L117 59 '105,008 72 3)45, 607 61 382,021 68

S: an-:. :
:o: ma- .,. : +


. -il



------------- I-------- II-----

61 382,021 68

TOrAL 329,924 56,417

59 405,008 72


Table 10.--Annual labor use by product group under actual conditions and
those in the nLod, el

Situation Vegetables Dairy Grains Baby and Sugar Othera
fresh corn cane
------------------------------Percent ----------------------
Actual 15.5 3.5 52.3 16.6 10.1 2.1
I on-compe-
titive model 40.5 24.3 11.3 15.3 5.4 3.4
Competitive .
model with 17.7 24.3 6.1 18.7 6.3 27.0
sug~r cane
model without 16.0 21.1 34.8 16.3 0.0 11.9
sugar cane

aTobacco, peanuts and fruits.

If sugar cane were not pII.duc' local employment would be higher
(Table 9), as indicated by a 68 percent l.a:bor index corrpared to 61 per-
cent. The difference is due to increased bean and corn production. With-
out sug:r cane, about 35 pFee-int of the labor employed in the District is
for grain :prod.uctiionl, I'hil.- w'iih s.*ujar c' production only 6 percent is
used for grains. There is a decr&eae in lte relative importance of pea-
nuts and tobacco in reference to er.lic:,rminnt. (Table 10), when sugar cane
is included.
The differences in mrriionth-ly labor requiLiiements when sugar cane is not
produced are great only for the last three months of the year because of
the high amount of labor that is r.:equi'Led for the cane harvest. Without
sugar cane there is a large October b lea-i planting, with heaving labor re-
quirements in ITc'veiber. Due t.- ti-.e high .lovernber labor requirements for
sugar cane, bean pla-ditingz.s in I'Ictc-ber ar, e riearly curtailed when sugar cane
is produced. Bec.cause labor can be ,.used more profitably in bean production
than in dair:.,, and the additional ibea production requires land that is
used for pastures wh-rn sui..wr cane is producedd dairy production decreases
when sugar cane is not pr.xoduced. In other.words, because of an indirect
effect of labor availability. for other crops (primarily beans) sugar cane
area and dairy area increase and decrease together.



The totalnet return to the District increases relative to the actual
situation by almost 01,400,000 or 38 percent in the non-competitive model
(Table 11). Labor income is approximately 68 percent or 0600,000 greater
than current labor income because of the increase in vegetable production.
Due to more intensive land use, the net return to management in the non-
competitive model is approximately 28 percent greater than the current net
return to management.
In the non-competitive model, a higher proportion of the net income to
the Distict is from labor earnings than in the actual situation. The non-
competitive model displays this characterisitc because of an increase in
the relative importance of vegetable production, which is labor intensive,
and a decrease in the relative importance of sugar cane production, which
produces high returns to management relative to labor. The increase in
the share of net income from labor earnings occurs in spite of the decrease
in the relative importance of grain production which is more labor inten-
sive than dairy production.
Relative to the non-competitive model, the total net return to the
District decreases by approximately 01,500,000 in the competitive model
when sugar cane is produced. Labor income decreases by approximately
4W00,000 and net return to management decreases in vegetables, corn, rice,
and dairy production. These income decreases are mitigated by increased
bean production and by tobacco production. Although labor income in the
competitive model is approximately 0200,000 (23 percent) greater than
current labor income, the current net return to labor and management is
only approximately 0150,000 or 4 percent greater than the competitive solu-
tion due to a drop in net return to management.
Total income to the District for the competitive model is greater by
approximately 0700,000 without sugar cane compared to with sugar cane.
Incomer of local labor would increase by 03380,000, and total labor income
that of migrant (not included in the model) and local labor, would increase
by approximately 0115,000. The net return to management is 0437,700
greater when sugar cane is not produced than when it is produced because of
increased corn and bean production. The net return to labor and manage-
ment when sugar cane is not produced is greater than current net return to
labor and management.

Table 11.--Income to labor and nranagement with comparisons under actual
:conditions and in the ]models (thousand colones)

I~et return
Labor Income et r Total
to management

Actual 943 2,647 3,590
% of totCal 26.3 73.7
Non-coipr:e t i ,tive
model 1,582 3,379 4,961
% of actual 167.9 127.6 138.2
,, of total 31.9 68.1
Ccni-,i:- t i: e model
with ,su:ar cane 1,154 2,291 3,445
% of actual 122.5 86.5 96.0
% of t. al 33.5 66.5
CoG.r.n tit i,'-i model i
without, sugar' cae 1,434 2,729 4,162.
% of tual : 152.1 103.1 116.0
Sof It;,tal 34.4 .65.6

T:,r;tl intcme earned by labor in both soluti-ons of the competitive model
is less thia in the non-competitive model because of the decrease in relative
JiTiporta i1c of labor intensive vegetable product ion. Although the relative
iripor'tance of gra-uin production increases, it is not sufficient to offset the
decreasie- in income and emrploy;rlet from vegetable production.

Iniprorts and the Balance of Trade

Bothi imports and e:.ports are relevant to the role played by the District
in the b a-unce of trade. The importation of three product groupings vege-
tables, L.~a.I., and dairy products is important in the models. Sugar cane
is the c'ril, e::port crop co nidered.
*',Cria-.,a to present import levels, vegetable imports decline sharply, by
n. Arly I9,'JiO C00 in the nron-cormpetitive nordel (Table 12). The number of vege-
table products imported is also less as Celery, cauliflower, and salad and
cooking tor.ato irqports are eliminated (Appendix C). Carrot, cabbage, guis-
quil, lettuce, oniion, potato, string bean, and sweet pepper imports are
greatly reduced, while only yuca shows a large increase in import value.


Table 12.--Potential changes in the agricultural trade surplus indicated
by the models

Competitive Nodel
Non-competitive Copetitive
Model With Without
sugar cane sugar cane
------- ----- Colones------------
Vegetables +903,628 -131 -191
Corn -123,399 -142,209 -107,127
Rice -9,876 -34,209 -34,313
Beans -18,663 +17,911 +44,247
Dairy +12,357,200 +12,357,200 +12,357,200
SugLar Cane 0 0 -2,672,000
Total Chame +13,108,990 +12,198,398 +9,587,816
------------ ----- ------- ----- --- ---- ---------- -
Percent of current
agricultcual trade surplus 3.5 3.2 2.5

The increase in dairy production in the model is large enough to elimi-
nate the imp.:ortatio:r of dairy products, presently valued at 012,357,200. The
value of corn prlI.'1:c icio~ is approximately 0100,000 less than current produc-
ti:on,, so corn imports increase appreciably. Rice imports increase by over
034,000 and bean imports also increase. Overall, the balance of trade im-
proves by over 013,000,000 in the non-competitive model due almost entirely
to the eliriiir 3i1on of dairy product imports.
The need for dairy imports is also eliminated when in the competitive
model with sugar cane prodi.ctr.ion. Vegetable importss increase sharply aid
are ge.ter than current imports with the composition of vegetable imports
*.i3,:-ling .compar..ed to the non-competitive model (Appendix C). Imports in-
crea.s-e iiarl-e:ll;/ for carr'ot-, celery, CUcucmbers, guisu.ll, lettuce, onions,
sweet :pppers, i:.ot.atoes, string ,beanIi, and cooking and salad tomatoes.
Corn, anid rice imports increase, beaj- iJports decrease-, ard no change is
ini-dicaced for sugar cane exports and the imports of dairy, products. The
agricultural trade surplus is reduced by approximately 01,000,000 due
primarily to an increase in the value of vegetable import of over 0903,000.

Vegetable production is not affected by sugar cane production in the
competitive model and vegetable imports differ very li-tle when sugar cane
is not produced. Although dairy production dec ,i.-.. ric :~,.gar cane is
not pr-oduced, sufficient milk would still be lpri .l .l' in the District to
eliminate the need for the importation of dairy p.':.. 1 .j;-.. Corn product ion
increases when sugar cane is not produced, perimiIi tI-: a reduction in corn
imports. Impo,.:,rts of corn in the competitive in:-.- without s.uar cane are
greater than current imports. Bean product ion .L:i-,--l ::lj cane is not pro-
duced increases over current levels resulting in a .o'ir-i. i..l for ex:qort.
In neither solution of the competitive model is rice ;..- iced, necessitating
an increase in rice imports.
Sugar cane production in the models is directly r-.lAi-'-d to the balance
of trade through sugar e:x-ports and indirectl.:r t.irl", 'i i land use by alterna-
tive crops. When sugar cane is not produced at present levels, foreign ex-
ch-age earnings are reduced by 02,672,000 due t, r .-I'.ur- "uPar exports.
Altihoughj corn and rice imports also increase, the .iJlpf:i : on the balance of.
trade due to the elimination of sugar' is compere 1 ni,.-'i l-, the elimination of
dairy imports. Sugarz cane :production in tLij c.'mpf..fi tive model however,
does stimulate over 02,600,000 in trade balance surl;..'.:-. '-This is due to
an ir-sign-ificsnt negative impact on trade balar-ic:: t.iL"i' .-ih land use be-
cause dairy' production is not ,Thanged and the_: i.Wr-a:i :. j,-ic.r't of changing corn
and bean production is negligible.

Policy Alternat ives

If vegetable imports were limited, lan-d uLe, eifln.,.:/meinr, labor income,
net return to management and the contribution to the tr.-', surplus would be
higher than when vegetable imports are un-liitled. :-',i:-hi as in the actual situa-
tion and with the com-peittive model (Table 13). i,-lici ::,' ith increase in
land use is due to the increase in dairy, product i-., a -.itu.iLrion not directly
related to iurditing vegetable imports. Ofl the incr.-.r.?;e in r.ne trade surplus,
94 percent is achieved by replacing dairy i~riprt. W i:h liit.lted vegetable
imports, prices paid by consumers for vegetabl:-.s ,:i.l.-i increase to cover
part of the increased retur-s to the District cre,_-ice,; r im port, restrictions
during those periods when the District proiJuc.es at c: i-.s :in excess of those
in Guatenmla. These income increases would improve. the well bei-ng of


Table 13.--.':"'ll ".u _. of the results from the models: Land use, labor use,
income and trade conditions

Comrrpet-it ive
Item Unit Actua.l Nnn-Con1 mpt it i e Model
With sugar Without. sugar

Land use Index 62 87 80 76
Labor use Index 60 72 61 76
------------ ----1,000 Colones ---- ---------
Lb..:.; income Index 943 1,582 1,154 1,434
Net return
to mange- Index 2,648 3,377 2,291 2,729

Labor and
mn -iiieiL- Index 3,590 4,961 3,445 4,162
Chi:; in
ba.l-i-,e of Index -- +13,109 +12,198 +9,588
t 1ad-,t' ,'-"

consumers in the District and could provide an effective demand st imulusl for
otl-i. c foods, thereby contributing to the development process. Relative to
the entire economy, however, a policy to limit vegetable imports would have
a very minor ir.l...;' and would be in conflict with the free trade gc:.al. of
the Central American Common -hl -:et. For both of these reasons it is unlikely
r imports will be r-etricted. Hence, the ability to compete with
- U-t.i;-r ii ,i i-.- '" ;; a n ,,'. ,'i ,u i: r.C '- "*' I .i
i' .: ...) can :-:l, -i Gu, Lateirtala in the p1'ro:-1i.e ion of several
,e:r,-- :,-,- regardless of whether or not sugar cane is produced (Table 14).
Iiu. 1. .:,i of these vegetables would increase eirloyment, labor income -and
net returns to management in the District. If slight yield increases were
i,._- I ";]--- i--" ,1.' '*' '.' of several vegetables shoin in Tab]e 14 without in-
cr.i,:..:; i :..1. : lo- n :.:; :-., Lhe District would compete wit h Guatemila in
i.:..i.,:-i :. Li---- ..-.-, -.-. if a c rl ticive advanta e cr,- be attained in
,-.:3,n-'i ..-": ;:s I .:iTabs:, increases in land use, employment, labor income
and i.c. returns to management could be realized without increasing costs to
consumers. The research required to make this change would, utilize nany

Table 14.--M'onthly competition between the Zapotitan District and Guatemala
for selected vegetables,a

aA darkened cell indicates a comparative advantage Ly the -apotitan
District; a number approximates the needed percentage yield inicr,?a:e to
become competitive with Guatemala.


of the lirdliedi resources available to researchers in El Salvador and could
thus delay possible advances with other development objectives of the
In a free trade situation with or without sugar cane production, the
District could contribute to the agricultural trade stiurlu' by increasing
dairy pr-oduction. This increase would also serve to intensify land use in
the District. Sugar cane production intensifies land use and adds to the
balance of trade surplus, but it causes a decline in employment and income.


Vegetable Production

L-jdLited domestic demand prevents vegetable production from having a
major impact on employment, income and the balance of trade through import
substitutionc. The increased production of certain vegetables, particularly
during no-ntrad;itional production periods (Appendix D), would, however, in-'
crease income in the Zapotitan District. This holds even though the District
can compiiete with Guatemalan supply sources in only a few vegetables during
specific months.
Demrnid should be determined for those vegetables whose production
would increase income and employment with particular attention given to
vegetables conrium1.e most frequently including cabbage, onions, -potatoes,
and tomnat.,.... Er:.c'-rime!i-its to improve the yields of several vegetables
where the District is in a poor competitive position relative to Guatemalan
sources .h:.ulld b1 .-,J undrLtal]eni. H-arlet coordination and the ability of the
District: to ccriij:ei. with Gkuatemala are intertwined to some degree because
of the ir-:i.-:etinr channels that now exist between Guattemala and El Salvador.
marketet in problems and the periodic persence of gluts are added barriers
to vegetable production in the District.
reas irg the production of vegetables for exportation could serve
to increase the enmprl:,-ent and income effects of vegetable production.
In the niear future Qua litj F;oods of Central _America, Lic. will open a
vegetable freezing facility on the outskirts of the District. The impact
of this facility should be included in a future study of the potential for

vegetable exports. At present levels of teclinol:ogy,, labor limitations in
key t.;:irhE- 'el-rict the p:ot -i:tial for export of fresh vegetables to the
Ur-it;.d St.at s.
A r-centl.y coml'ilet.d stud,' of the- su.-ipport services in the District,
conducted by the Dpa'rteintr of Res.earch, Di-vision of Irrigation and Drain-
age, shoiu that thi. extend i..on a-igents visit approximately 60 percent of the
vegetal.le p1,rodi Jcer's at least once a wed: during traditional production
periolds If the.?:,e prcdu::eirs were to pri,-duce vegetables during the non-
tradi.ional production periods, production in the District could increase
greatly. The e.:1-ension a_.gents, th.- efore, must be able to deliver a com-
plete package of techl-ology for each season. To accomplish this task the
e.:tensi.rn service rnut work closely, with the credit agencies arid researchers,
and hive a.dequr.lue personnel and tran.1por taticn to give the necessary coverage.
A rnleth.:,,3 of ai.L;enr'ti-l ,in- e:..:Ti sion cc'ntiaclts for delivering part of the technical
knowledge :ac5e -would be wj-ll craniz.ed field days during various seasons
and sta,-es of the g'cth cycle. Th-e.se field days would: 1) demonstrate to.
prdu.c-rs irn.ro.ved mreti hods for :.ru. lilg specific vegetables, especially
in rnofl-tr t'5.itioiial periods; 2) erimn.~isize costs, thus explaining credit re-
qi.-rrimni.a; and 3) illus.trat, the :im:por'tarice of vegetable production as a
m,-.ans :f aii.men rtin-i eliiplo;,ii':nt and income.
There is sufficient ::edlit available to the District, according to the
nm.dels, for incr-oa lingg v-egetiable prhc''."tion through credit generation via
loan -:...j;,ent. For- credit to be effeItive, requests for loans must be
iade with ample time for :.,ro,:essiug. Extension agents need to inform pro-
du.-ers more fully about. credit availaility and ,procedures for requesting
Tl-i. most irn:orltan-r vegetable : n t.ket ing problems to be considered are
the Iret----, seasonal ..carrci ies and -cle firmly established marketing chan-
nrils with Guatemala dujrinruy -.nii-tradit -onal Salvadorean production periods.
If tlhe- pire-ent proriuci:i n pattern t-ere changed, :alvadorean buyers would
iprotably seek the closer s:ou:.cre and y from the producers in the District
as the.- do presently dr..-ILin,. tihe traditional production periods. Such a
chanJ-gE., however, u-'uld require a aperm'-uient and stable production pattern
in sufficient quantities to ieet. the :produced needs of the Salvadorean
buy,'ers. Tnac is, a new poduction patterns must emerge with market depen-
dability for th.e District that can compete with Guatemala sources, market-
ing facilities would reqjLuire improvements to provide for year-round produc-

tion. ____

Dairy Production

An increase of over 2,000 manzanas in pastures for dairy pr'oducttiron
would have a much greater effect on employment, income, and import sub-
stitution than an increase in vegetable production in the absence of ex-
port considerations. The increase should take place primarily on poorly
drained land, replacing much of the seasonal corn and rice production.
Dairy production increases would require an expansion of the dairy
herd within the District and the origin of these cattle would be impor-
tant i-o agricultural trade balances. If the cattle were from other parts
of El Salvador, trade balances would remain unchanged but there would be
no increase in the national dairy herd size. Cattle importation would
have a large adverse, but one-time effect on the balance of trade. Po-
tential long term benefits through import substitution effects of the
projected increased milk production should be compared with the cost of
cattle import.
An increase in dairy production could also take place because of
dairy herd improvement. It is recommended that credit and extension
agencies promote herd improvement programs.
. I'.)Ofic: 1s of the Ministry of Agriculture are planning to promote
livestock and grain enterprises in the recently created Atiocoyo Irriga-
tion au-id Dai;:.i-' District. A study should be made which includes the
ap:ot.it:L-i and the Atiocoyo District as competing and complimentary sources
of daiir' products.

Sugar Cane Production

ri,.u'r" cane _fJ'..rsci. .' afec'r. eiirpl'o',Terint a- incm inc the District..
When aL.iprcl'x:inrtel.7 0: r'ua!nzanas of sugar cane are produced(e,.ua] to present
production levels), resident employment declines 10 percent and total em-
ployment, i n-ludii i- migratory labor, decreases by 4 percent from the hypo-
thesiz.-d sil-;u.:.i.iL, when none is produced. Net return to management de-
creases by 16 -..-cenrt anrd eariini-s to the District, including net returns
to mani-agemenI- .--i re:.ident labor income, decrease by 17 percent (0717,000),
Reason for the t ,rndei c to increase sugar cane production in the District

have not been determined so further research is r'ecormmended to better
understandd this trend. Recent chan-ge~ in world sugalj pFrices came after
this research.
Labor requirements of the sugar cane harvest necessitate a reduc-
tion in the production of beans and corn. The decrease makes more land
available for the entire year, permittingg an increase in pastures used
for dairy production. Recently, Ministry of A.piculture officials'have
stated that they want bean production in the District and in El Salvador
as a whole to increase [6, p. 3]. An increase in production can take
place if sugar cane is produced, but the increase would be less than if
sugar cane were not produced. The increase when sugar cane is produced
would cause a reduction in vegetable produc-.rioni because bean production
would then compete for labor at the beginning of the dry season. Al-
though sugar cane production in.the District accounts for over 02,600,000
Sin foreign exchange earnings, the production from the District is rela-
tively u.in:.iportant to total foreign exchange earnings. Thus, given the
income and employment objectives of the government it appears that sugar
cane production in the District can be reduced or eliminated without
creating trade problems.

Grain Pr r..i.iuct ionr

Grain production uses l~bcrr t.h'ih is made available by changing
conditions in the mr.dlels and acts as a buffer to extremely low employ-
ment. -When dairy production increases, grain production declines in
the models because these enteiprise.- compete for land. If grains are
to become more iii;pc.rtant, their profitability must increase. That is,
yields and. 'cr prices must increase, yet present domestic prices are
high- relative to world prices. T-iu.., research and extension programs
are needed to increase yields if the desire to au7ment grain production
is to be fulfilled without adversel. affecting Salvadorean consumers.
It should also be noted that the use of labor for increased vegetable
production causes a decline in grair- production and that grains do not
compete favorably with vegetables for labor.


Vegetable production can increase in the Zapotitan District, and
thereby employ more people, increase incomes, and substitute for im-
ports. Increases in vegetable production, in the absence of extensive
exports, cannot solve the rural unemployment and income problem. At
present, vegetable imports are relatively unimportant to the balance
of trade. Thus, vegetable production research and the research rela-
ted to vegetable consumption levels may be of lower priority than re-
._-arcl- on dairy herd improvement and expansion. Relative to employ-
ment and income, however, the importance of vegetables could increase
if exports (especially to the United States) were to increase suggesting
that research oriented toward export demand potentials is necessary.

Limitations of the Study

The assumption of constant prices combined with fixed vegetable
deii and. is a limitation of the study. A future study should hold either
demand levels or prices constant and vary the other. Prices, technology,
and consumption change over time. Because of these changes this stud:.
should be updated periodically. .J,:- prices of fertilizer and other pe-
troleum b.t.:-'J inputs are significantly greater than they were when ;:ie
analyses were conducted so appropriate changes should be made to reflect
these price increases.
Ti'-.- quantities forming the vegetable demand constraints are subject
to question because of the reliability of the import figures. Tire Sal-
v'.: .ie:-m estimates of (Cuv--ltili3s and values of the Guatemalan imports are
not eq .l to the Guain.el.n.i .p.i. : :. I r- i -: Because more CalJ.i':.:'i:. a,
data were available and the G,.ai:.-iLl:-'n figures are not i:lh:.ut to be. any
rm.rre accurate than the Salvadorean estimates, Salvadorean data were used
eni-.rely. Work is presently being conducted to improve the quality of
the Salvadorean information. The changes in information base] upon this
work should be included in a future t.,dy.
A,. a final comri,.nt on ,:us k. :-; ., economic ,[r: imbrlii ty, as fined
in.the r i1l" s is not "t :.in--,:l in -:i- Di-, :'..:t for :';.:: p ible re,:,ons,



The models fail to ca'pt'.ur all of th- ii-si. .tut.i-.,na] ii.-liti--:-; in pro-
duction and aiia:et-iii,. ThLLus, the models do n.-t depict r-eality ;-iJ .one
ri'L -ihlt argue that this c,:ndition limits the- : L.se,.-fulness. However, the
second reas-crn is that, i:facc, the District cui-.l move close] to opti-
rrality if progiarrim. were d:si.-ed to improve c)oor ]ljin..;ioic, in pri'ducc.ion
aid rar4-keting. Both reas.r'is tl'itLr are one in i:he si--.




A symbolic representation of the model is:

Maximize: P. Y. + S. Z. + I. X.
iq 1q iq iq lq iq

Subject to: A (Y. + Z. ) Bq

Ci (Y. + Z. ) < D
iq iq iqc q

E. (Y. + Z. ) < F
iq iq iq q

G. (Y. + Z. ) < H
iq iq iqc r

Y. + X. = L. (competitive model)

or Y. < L. (non-competitive model)

Z. < N.
iq iq
1= 1, 2, ..., 12

r = 1, 2, 3, 4


P. = the net return to labor and management per manzana for
iq producing vegetable i in period q;

Yiq = the quantity of vegetable i produced in period q;

S. = the net return to labor and management per manzana
q for producing non-ve!jeLabie or baby corn i in period q;

Zi = the quantity of non-vegetable i or baby corn produced in period q;

I. = the net return per hundred weight for importing vegetable i
iq in period q;

Xi = the quantity of vegetable imported in period q;

Ai = the labor required to produce product i in period q;

B = the labor available in period q;


C. = the well drained land required to produce product i in

D q the well drained land available in period q;
E. = the poorly drained land required to produce product i
iq in period q;

F. the poorly drained land available in period q;
G. = the credit required to produce product i in period q;

H = the credit available at eight percent in quarter r;

L. = the quantity of vegetable i demanded in period q;

Niq the quantity of non-vegetable i or baby corn demanded
in period q.



Table 15.

Net return from import

Product Month Import Value .10 C Total Im- Farm Price
Planted per cwt. port cost per clit.

BEETS October 2.98 .30 3.28 3.00
December 3.05 .31 3.36 2.85
February 3.16 .32 3.48 2.85
April 2.84 .28 3.12 2.93
June 2.00 .28 3.08 2.70
August 2.66 .27 2.93 2.70

CABBAGE October 3.13 .31 3.44 2.66
November 2.26 .23 2.49 2.92
December 2.65 .27 2.92 2.75
January 2.69 .27 2.96 2.12
February 2.47 .25 2.72 2.16
March 2.49 .25 2.74 2.50
April 2.37 .24 2.61 2.42
May 2.17 .22 2.39 2.33
June 2.17 .22 2.39 2.42
July 2.16 .22 2.38 2.58
August 2.09 .21 2.30 2.50
September 3.11 .31 3.42 2.50

CANTALOUPE November 2.40 .24 2.64 3,I
May 3.12 .31 3.43 4.50
July 5.18 .52 5.70 9.00
September 4.36 .44 4.80 4.50

CARROT November 2.89 .29 3.18 15 00
J :. .nu ry 3.0.- .31 3.37 16. .
I ia.~ch 4. :; .43 4.74 17.00
Iiy 2.'.' .30 3.27 1:-;75
July 2.68 .27 2.95 17
September 2.75 .28 3.03 16.75

CAULIFLOWER October 2.67 .27 2.94 22.22
December 2.66 .27 2.93 2,l10
February 2.84 .28 3.12 2:. 33
April ', "2 .34 3. ,'3 2!. 10
.34 L
Ap,l ,r .27 2.'. .22
Aul 'iist ?.;'"' 3 ':1,09 23. 3






--~------------- ------------~-'--------~----


Table 15. Net return from import (Continued)

Net Return Honths
.for fniport Coni .uied

-0.23 12-1
-0.51 2-3
-0.64 4-5
-0.19 6-7
-0.38 ;-9
-0.; 10-11

-0.78 1-2
-0.43 2-3
-0.17 3-4
-0.54 i-5
-0.56 -'
-0.34 6-7
-0.1 7-);

0.03 9-10
0.20 10-i1
0.20 11-12
-0.92 12-1

0. 36 .-J
I .nfl 8- ',
3.. J 10-11
0.30 12-1

11.;2 2-3
12., i -

15.48 '-
16.30 1-
13.;: 12-1

2:.17 2-3
25.2 1 4-5
22.37 6-7
19. 2. 8-9
1: .21 10-11

2 '.1"i 1
1I q. -.'
13.54I -9
1J.91 10- !1
14. 5 1 :-1
16.02 ,2-3

Con t inued


Table 15. Net return from import (Continued)

Product Month Import Value .10 C Total Im- Farm Price
Planted per cwt. port cost per cwt.

WATERMELON November 2.29 .23 2.52 2.10
January 2.36 .24 2.60 2.10
March 1.89 .19 2.08 3.15
September 5.81 .58 6.39 2.8

GUISQUIL August 2.86 .29 3.15 6.60
December 3.14 .31 3.45 6.60
April 3.56 .36 3.92 6.60
September 3.14 .31 3.45 6.60
January 3.56 .36 3.92 6.60

LETTUCE September 2.70 .27 2.97 10.00
October 3.94 .39 4.33 10.83
November 3.22 .32 3.54 13.33
December 3.27 .33 3.60 12.50
January 2.77 .28 3.05 11.67
February 2.42 .24 2.66 10. 8
March 2.46 .25 2.71 10.00
April 2.94 .25 3.23 7.50
May 2.51 .25 2.76 8.33
June 2.51 .25 2.76 9.17
July 2.81 .28 3.09 9.17
August 4.61 .46 5.07 10.0l

ONION August 4.46 .45 4.91 8.00
October 4.32 .43 4.75 10.00
December 5.07 .51 5.59 11.20
February 9.36 .94 10.30 11.65
June 4.40 .44 4.84 8.65

POTATO november 4.04 .40 4.44 10.00
January 4.12 .41 4.53 11..0
March 3.56 .36 3.92 8.55
May 3.86 .39 4.25 6.n,
July 4.25 .43 4.68 8.05
September 3.75 .38 4.16 6.70

RADISH October 3.74 .37 4.11 4.00
December 3.00 .30 3.30 5.10
April 22.50 .25 2.75 3.00
June 1.00 1 .10 8.00
August 3.73 .37 4.10 8.00







Table 15. Net return from import (Continued)

Net Return
for Import






7.03 1
6.50 2
9.79 3
8.90 4
8.62 5
8.17 6
7.L9 7
4.27 8
5.57 9
60,1 10
6.08 11
'1.94 12



1 -



-0. 11-12
1.70 1-2
0.25 5-6
6.90 7-8
3.90 9-10

10.32 12-1


L i_~.- L .X_*(IL~-II^-L*LLI--LI--Y-C---l


Table 15.

Net return from import (Continued)

Product Month Import Value .10 C Total Im- Farm Price
Planted per cwt. port cost per cwt.

December 5.12 .51 5.63 17.59
February 3.95 .40 4.35 11.25
April 3.80 .38 4.18 12.15
June 6.00 .60 6.60 12.64
August 3.31 .33 3.64 15.41

STRING BEAN October 3.29 .33 3.62 30.00
December 4.57 .46 5.03 30.00
February 3.09 .31 3.40 35.00
April 2.69 .27 2.96 35.00
June 3.95 .40 4.35 20.35
Auqust 3.05 .31 3.36 35.00

COOKING October 2.74 .27 3.01 6.00
TOMATOES December 3.10 .31 3.41 16.00
February 2.59 .26 2.85 16.00
April 3.55 .36 3.91 9.00
June 3.10 .31 3.41 12.00
August 2.43 .24 2.67 12,00

SALAD October 4.29 .43 4.82 7.50
TOMATOES December 4.85 .49 4.34 20.00
Febrh, .,ry 4.05 .41 4.46 20.00
April 4.37 .44 4.81 10.00
June 4.20 .42 4.62 14.00
August 3.29 .33 3.62 14.00

CUCUMBER October 2.52 .25 2.77 4.55
kj.ermiber 2.21 .22 2.43 1.91
February 2.80 .25 3.05 2.91
April 2.84 .28 3.12 4.68
June 2.77 .28 3.05 3.68
A just 2.9':! .29 3.20 3.41






5.54 5.90

Table 15. Net return from import (Continued)

Net return Months
for Import Consumied

11.96 2-3
6. i0 4-5
7.97 6-7
6.04 8-9
11.77 10-11

26.3; 12-1
24.97 2-3
31.60 4-5
32.04 6-7
16.00 8-9
31.64 10-11

2.99 1-2
12.59 3-4
13.15 5-6
5.09 7-9
8.59 9-10
9.3- 11-12

3.16 1-2
15.66 3-4
-15.54 5-6
5.19 7-9
9.JS 9-10
10.3. 11-12

1.78 12-1
0.62 2-3
0.14 4-5
S1.56 6-7
0.63 -'
0.21 10-11

2.44 3-4
2. 89 5-6
3.10 7-8
-2.69 9-10

0.36 1-2

Table 16.

Vegetable import values (in colones)

Product Month 1969-1972 Non-Compet- Competitive
Imported Average itive Model Model

BEETS 12-1 7,467.14 0.0 0.0
2-3 6,884.61 0.0 0.0
4-5 6,045.87 0.0 0.0
6-7 9,105.04 0.0 0.0
8-9 7,457.80 0.0 0.0
10-11 5,442.36 5,453.00 5,453.00
Total 42,402.82 5,453.00 5,453.00

CELERY 12-1 644.17 0.0 644.17
2-3 173.76 0.0 173.76
4-5 190.24 0.0 190.24
6-7 619.83 0.0 0.0
8-9 402.98 0.0 402.98
10-11 494.76 0.0 494.76
Total 2,525.74 0.0 1,905.91

CARROTS 2-3 10,158.90 0.0 20,258.90
4-5 22,797.00 22,797.00 22,797.00
6-7 33,747.30 0.0 33,747.00
8-9 18,859.50 18,859.50 18,859.50
10-11 18,626.00 21,505.00 18,626.00
12-1 21,505.00 21,505.00 21,505.00
Total 135,793.00 81,787.50 135,793.70

CUCUMBER 12-1 4,016.25 0.0 33,465.60
2-3 3,437.10 16,331.90 16,331.90
4-5 2,521.40 0.0 0.0
6-7 3,908.55 0.0 0.0
8-9 3,065.70 11,273.90 11,273.90
10-11 1,338.60 1,338.60 1,338.60
Total 18,287.70 28,944.40 62,410.00

CABBAGE 1-2 43,044.54 0.0 0.0
2-3 23. 23.49 0.0 0.0
3-4 20, 3.49 0.0 0.0
4-5 20,332.7? 0.0 0.0
5-6 25,758.40 0.0 0.0
6-7 32,252.67 0.0 0.0
7-8 32,931.47 34,696.80 34,696.80
8-9 33,742.42 35,631.40 35,631.40
9-10 35,457.80 35,457.80 35,457.80
10-11 33,480.00 33,480.00 33,480.00
11-12 3?,813.00 32,813.00 32,813.00
12-1 50,19b5.40 50,195.40 50,195.40
Total 384,291.03 222,274.40 222,274.40



Table 16. Vegetable import values (-: colones) (Continued)

Non-Compe t-
itive Model


CANTALOUPE 12-1 "0.47 791.34 791.34
2-3 12.00 397.68 397.68
8-9 191.20 191.26 191.26
10-11 71.23 251.23 251.23
Total 514.1 ':. 1,631.51 1,631.51




10., C71.2 f
9, 00,. 95
12.645. ,.69
10, .31
6, .07.29
60, 1.0 i.71



.3 ')0 .5 ,-

2,96 .40
3, 9 799.40
3. '. 1iQ
4,351 20
2 .23 :. .90
3,4 33.70
4 ,056.80





4,3351 .20

12-1 29, 03.5" 0.0 34,323.90
2 : 25,112,:0 25,511.20 25,511.20
4-5 17,26:.0O 0.0 25,876.80
G-7 22,71'; C 0.0 22,713.60
8-9 65,i6 .,0 0.0 0.0
161.i 36.70 25,511.20 108,425.00



Mnr, rth

1919- 1972
A''e, Lgee




2-5-8- 11

20,47! .17
11,76 .15

11 ,9 16
67,935, 7i9




_ __I__ _-- ~------I~ ~- --

--- -

- "*


Table 16.

Vegetable import values (in colones) (Continued)

Product Month 1969-1972 Non-Compet- Competitive
Imported Average itive Model Model

SWEET 12-1 995.56 0.0 24,977.25
PEPPER 2-3 2,042.88 0.0 16,486.40
4-5 3,182.71 0.0 3,768.30O
6-7 391.40 0.0 1,744.20
8-9 91.50 0.0 1,338.00
10-11 251.56 251.56 251,56
Total 6,955.62 251.56 48,565.71

POTATO 1-2 104,630.40 104,630.40 104,630,40
3-4 42,327.08 0.0 211,009.20
5-6 109,791.82 0.0 111,178.;:0
7-8 111,178.80 0.0 111,178.80
9-10 133,942.00 133,942.00 133,942.00
11-12 133,577.50 133,577.50 133,577.50
Total 635,447.60 372,149.90 694,337.90

STRING BEANS 12-1 3,417.49 5,487.72 5,437.72
2-3 615.70 2,033.65 2,033.55
4-5 10,793.37 0.0 10,73".37
6-7 5,554.18 0.0 5,356.13
8-9 880.85 880.85 880.85
10-11 231.04 1,586.65 1,586.65
Total 21,492.63 9,988.87 26,738.37

SALAD 1-2 17,74: .24 0.0 96,053.10
TOMATOES 3-4 6,009.34 0.0 94,526.50
5-6 10,185.75 0.0 0.0
7-8 2,367.40 0.0 0.0
9-10 3,537.11 0.0 0.0
11-12 17,883.75 0.0 0.0
Total 57,778.60 0.0 190,599.60

COOKING 1-2 2; ., 0.0 47,648.60
TOMATOES 7,-...;3 0.0 35,960.00
5-6 1i ,0";. ,o 0.0 5, '<' 50
7-8 5,786.50 0.0 5,78,6.50
9-10 5,222.20 0.0 5,983.00
11-12 26,414.00 0.0 26,414.10
Total 80,788.35 0.0 121,792.20

RADISH 1-2 :.5 1,203.90 1,203.90
-. 10.63 0.0 0.0
7-t ,0 0.0 0.0
9-10 54.58 0.0 0.0
11-12 61.71 0.0 0.0
Total -132.17 1,203.90 1,203.90

______I_ -- -_lnnt i n ed 4-

Table 16.

Vegetable import values (in colones) (Continued)

Product Month 1969-1972 Non-Compet- Competitive
Imported Averayo itive Model Model

YUCA 1-2 871.92 871.92 871.92
3-4 659.39 5,983.44 5,933.44
5-6 283.96 0.0 288.96
7-8 32.78 2,439.60 2,439.60
9-10 259.55 0.0 0.0
Total 2,112.60 9,294.96 9,583.92

GRAND TOTAL 1,729,235.16 .835,607,46 1,739,426.24
AVERAGE 903,627.70 191.08



The product mix shown in the following table is the solution

of the non-competitive model. The indicated areas for the

vegetables are dependent upon the demand constraints. The solution

as a whole is dependent upon the costs of production, farm prices, and

labor requirements of the production budgets.



Table 17. Optimal

production in the Zapotitan District, non-competitive

Product Soil Type Months Planted Area (Mzs.)

AYOTE (a W.D. 9 2.063
pumpkin-like W.D. 11 4.200

BEETS P.O. 2 4.548
P.D. 4 7.643
W.D. 6 6.334
W.D. 10 5.977
W.D. 12 5.381

BROCCOLI P.D. 2 1.000
W.D. 4 1.000
W.D. 6 1.000
W.D. 8 1.000
W.D. 10 1.000
P.D. 12 1.000

CABBAGE P.D. 1 11.631
P.D. 2 16.047
W.D. 3 19.924
W.D. 10 26.185
W.D. 11 25.924
P.D. 12 12.170

CARROT W.D. 3 27.965

W.D. 4 14.778
W.D. 6 26.112
W.D. 8 20.778
W.D. 10 17.723
W.D. 12 22.389

CELERY W.D. 2 0.693
W.D. 4 0.474
W.D. 6 0.634
W.D. 8 0.466
W.D. 10 0.229
P.D. 12 0.693

CUCUMBER P.D. 2 6.190
W.D. 4 11.959
W.D. 10 30.182



Table 17. Optimal production in the Zapotitan District, non-competitive
model (Continued)

Product Soil Type Months Planted Area (Mzs.)

EGGPLANT P.D. 2 1.389
P.D. 4 0.417
W.D. 10 0.955
P.D. 12 0.477

GUISQUIL P.D. 1 3.819
(a squash)

LETTUCE P.D. 1 2.850
W.D. 2 3.341
W.D. 3 3.681
W.D. 10 1.894
W.D. 11 1.958
P.D. 12 1.874

ONION W.D. 2 18.553
W.D. 6 17.816
W.D. 10 15.764
P.D. 12 11.790

W.D. 4 2.294
W.D. 6 1.115
W.D. 10 29.385
W.D. 12 16.100

PIPIAN W.D. 4 2.084
(a squash) W.D. 10 17.445

POTATO W.D. 2 83.282
W.D. 4 97.594
P.D. 12 163.219

RADISH W.D. 2 0.038
P.D. 4 0.123
W.D. 8 0.423
W.D. 10 11.900

STRING BEANS P.D. 2 54.579
W.D, 4 34.016

W.D. 4 4.180
W.D. 6 4.949
W.D. 8 27.872
W.D. 10 49.686
W.D. 12 33.143


Optimal production in
model (Contiued)

the Zapotitan District, non-competitive

Months Planted

Area (Mzs.)


2 8,400
4 12.028
6 3.568
8 14.703
10 0.627
10 74.008
12 64.967







BABY CORN W.I. I 53.572
P.O. 3 53.572
P.D. 5 53.572
W.D. 9 53,572


W.D. 1
P.D. 3
H.D. 5
P.D. 7
W.D. 7
14- .D. 9
W.D. 11

W.D. 1
P.D. 1

P. 0.













Table 17.


Soil Type









----- ----- -- ---- ------ ---- ---


- -- --

~ _I~-~-----~
__ -- -- -- -----

. ...... ---




One hectare
One -Lancana
One Kilometer
One Colon


2.47 acres
0.7 hectares = 1.73 acres
0.6 miles
0.4 dollars
The National Center for Agricultural
The Zapotitan Cooperative
Small farmer

_ __ I____~_



1. Chain.g, Alpha C. uid-Jitl i'i't.ds .:f iathtical Ecorotru.cs.
I.w Yor-:: ii'rau-liill LooI;: ':mt..arny, 19Y7.
2. Con:,'ers, M.S. Alici.ilri..I anIIJ Tr:a. of El SalvadEor. U.S. Depart-
ment of Agric'ltita'e, ER-For-ign 3123. Washington, D.C.: U.S.
Iconorrl.ic ?e-.ear'chi C. r,'ice, November 1971.
3. Direccion General de Ecoi,.,iaa A-~ ricola y Planificacion. Anu~ario de
iEt ,,: ist.ic;s Ag,.pe.i,'j- ai, San Salvador, Ministerio de Agri-
cuiltu'a .y "a.ria, 19;9,'70 arid 1970/71.

Irtijcias d1 l'ie-Irctde,'r Ag-.icc'ia. S'an Salvador: Ministerio de
\Airicull-u. ,' iarn._i.-l'ia, iLi 1972.

lio.ic.ias. il dea Aricla. .an Salvador: I-'linisterio de
Ahriculttui" y ig-iiiad via, 1971, 1972.
6. Direcc i.n e i-er, '1 Oibr-. d- iego y Drenaje. Invest ifaeion Gobire
Ser,'icios ,:le A:,:'o a la Pr.duLccion, Distrito de Riego y Avena-
idenrto Ib. .r'oti'-. Sn .Salvador: Miiiisterio de Agricul-
tur-a y GaC ,j'via, \gust. 1972.
7. Depart-ai:nrnto de Iif,:rirj_,Ari pec aria. Inifonaciones Agrope-
cuarias, Vol. I. lo. 3. ant- Tecla: Iltnisteri'ic de Agricul-
Ti. -a y G.mi-td:-iiia, Il.3vr,[Lerv 1973.
8. GoLerr-o de El Salv.rad-orv, Diario Cficial, Vol. 230, No. 25. Sa- Sal-
v, ad,:.ro Fb re.:, 5, 1971.
9. Guerr -, Ivrcules 3., R.A. "cniIL --.eIz, ,t. al.. Decreto h. 21 Crea-
i:iIn -Je'l '-L.trit.o d'- FLi-g;.' Avern._ d'-r to li 1 sapotita.ju.
..Aniitsa TV rtla: GLinist.ri, de f\^icu.ltxu '' Ganaderia, February
1 i.71.
10. TIerril WC, TI.. Fl. -ciir, and M.S. Hjarirahan. F.-ducci n y l ir-
c.:i-,o d- I-ir't i za.: e ti- ,:vlt: s. Guat' erlala City: U.S. Agency
f:r. e 'n-ati.1.nal -.e..:e.irient,'Gu.LI-i tela. la J.u-e 1971.
11. -lcnternegro, Hic'-oi', J.H. S'ra'.ia, J.E. Crespin. Provecto de Pro-
ducii',n de H1rtolia, San S'lva.lor, Pro;,icto de Diversification
AicoLa .-i El .'a.lvad.lor, :[ICI-FAi SF ELS 5, December, 1971.
12. Population F,-ezearc E'ua'el., Inc. 1973 Fopi-ualtion Data Sheet.
Wl -,ingt -'ri, D.C.: 'Population Researcht Bureau, Inc., 1974.
13. U.S. C'.pertnment. .-f A.-ri,,irt.ue., .:.-Fo.reij', 328. Agricultural T'rade
of the WesVer Heri.-pr. Washington, D.C.: U.S. Department
.o.f APgricultrc, FebLrua:r' 1972.

University of Florida Home Page
© 2004 - 2010 University of Florida George A. Smathers Libraries.
All rights reserved.

Acceptable Use, Copyright, and Disclaimer Statement
Last updated October 10, 2010 - - mvs