Title: Institutional disincentives to agricultural production in developing countries
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Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00054848/00001
 Material Information
Title: Institutional disincentives to agricultural production in developing countries
Physical Description: 16 p. : ; 26 cm.
Language: English
Creator: Saleh, Abdullah A
Publisher: s.n.
Place of Publication: s.l
Publication Date: 1977
 Subjects
Subject: Agricultural policy   ( ltcsh )
Farm management   ( ltcsh )
Genre: non-fiction   ( marcgt )
 Notes
Statement of Responsibility: by Abdullah A. Saleh and O. Halbert Goolsby.
General Note: Supplement to Foreign Agriculture, Aug. 1977.
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Bibliographic ID: UF00054848
Volume ID: VID00001
Source Institution: University of Florida
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Resource Identifier: oclc - 24852101

Full Text





Foreign


Agriculture


SUPPLEMENT
AUGUST 1977



Foreign
Agricultural
Service
U. S. DEPARTMENT
OF AGRICULTURE


INSTITUTIONAL DISINCENTIVES TO AGRICULTURAL
PRODUCTION IN DEVELOPING COUNTRIES


By Abdullah A. Saleh and 0. Halbert Goolsby

Foreign Commodity Analysis
Foreign Agricultural Service


Institutional disincentives to farmers-in such forms as
price and export controls, and restrictions on credit and the
domestic movement of agricultural products-have the
potential for widespread and serious harm, unless these
countries have ample foreign exchange to import food-an
unlikely situation. Given the present poor external
financial position of many developing nations, agri-
cultural disincentives are all the more serious. For a few
petroleum-rich countries there is no problem, of course.
In September 1976, the U.S. Department of Agriculture
surveyed 44 countries that had been found in an earlier
study' to have governmental policies that could directly or
indirectly discourage production. In 1975, these 44 nations
contained 1.6 billion people-two-fifths of the world's
population, or four-fifths of the population in the develop-
ing nations. In most of these countries, the bulk of the
population is concerned with agriculture, and a large
proportion of their national income is derived from the sale
of agricultural products.
In the 1976 study, approximately 600 disincentives were
identified, although it is difficult to count with precision
because of the generic nature of some classifications of
commodities reported. Price controls were the most often-
used disincentive (106 occurences at the producer level and
112 at the retail level). Export controls were the next most-
often used (physical limitations, 89 occurences; and export
taxes, 70). Least used were restrictions on internal move-
ments (23 occurences).

'Results of this study appeared in a supplement to Foreign
Agriculture, March 1975. The survey covered 50 nations, of which
46 were found to have disincentives to domestic farm production.
The current study covers all of these countries, except Spain and
Greece. The disincentives reported in the Survey appear in the
Appendix, where they are classified by country and commodity.


Disincentives were most often used in Peru (54 times),
India (46), and Guatemala (32). They are more widely used
in South America and Asia than in Africa, in part reflecting
the fact that many African economies are still largely on a
subsistence basis.
From the viewpoint of commodities, disincentives were
applied most often to rice, wheat and flour products, and
sugar-obviously because these are staple products in
many developing countries. They are, however, applied to a
wide variety of foods-from cassava to beef-and even to
some nonfood agricultural products (tobacco, jute, and
wool). In total, there were over 30 commodities against
which disincentives were applied.
With the exception of Spain and Greece in the first
survey, no attempt was made in either survey to ascertain
disincentives in developed nations. Paradoxically, many of
them have policies that often lead to overproduction of
certain agricultural products. They also have policies that
tend to restrict agriculture production.
As recently as 1973, U.S. Government set-aside pay-
ments for feed grain acreage totaled $1.17 billion, and 9.4
million acres of land were withheld from production.2 Over
the past two decades-during which in most years
carryover stocks were large, depressing prices and farm
income-U.S. agriculture has been the subject of various
production adjustment programs to support farm income.
Consequently, such programs have generally had as their
objective supply reduction rather than supply expansion.
Current programs that act as restrictions on production
in the United States are marketing quotas and acreage
allotments for extra long staple cotton, peanuts, and most
types of tobacco. Also, recent environmental legislation


2Commodity Fact Sheet, April 1974, ASCS, USDA.







calls attention to social trade-offs between what is con-
ceived of as being a socially desirable environment, and
higher production.
There can, of course, be any number of types of
disincentives that are general in nature and thus not
specifically disincentives for the agricultural sector. These
types of disincentives were not included in either survey.
The types of disincentives found in the developing nations
that more directly influence agricultural production in-
clude:
1. Controlling the producer price of agricultural
products.
2. Controlling the retail price of agricultural products.
3. Noncompetitive buying (procurement policy).
4. Export controls.
5. Export taxes.
6. Importing for sale at subsidized prices.
7. Foreign exchange rate controls.
8. Restrictions on farm size, land tenure, and credit.
9. Restrictions on domestic movement of agricultural
products.
To more fully appreciate the potential and detrimental
effects of these practices, a short discussion of their general
nature is given below.

Impact of Disincentives3

Price controls. Producers normally try to maximize
their profits within (a) the constraints of their technology,
(b) the natural resources available to them, and (c) the final
demand for the product. The consumer, in turn, tries to
maximize satisfaction by demanding at the lowest price
possible those products (including goods and services) that
directly or indirectly satisfy some need or want. In a
market-oriented economy where the forces of supply and
demand are more or less free to interact on a competitive
basis, both sellers and buyers can on a realistic and sound
basis maximize their standards of living.
If a nation lacks foreign exchange to import food com-
mercially and finds that it cannot import on a concessional
basis, it must meet any increased requirement for food by
stimulating domestic production. One way to accomplish
this objective is to free production from artificial con-
straints, such as prices kept at low levels.
Why then are price controls instituted? In some cases,
governments desire to control the price of food for political
reasons; for many developing countries food prices
comprise the largest component in the consumer price
index-the primary indicator of the degree of inflation-
and, when these prices rise rapidly, are often considered a
mark of failure on the part of the government.
In many cases, however, the objective of price controls is
a more equitable distribution of food, especially where

3This survey does not deal explicitly with interdependencies
among commodities. It is recognized that a disincentive for one
commodity may prove to be an incentive for another commodity,
or the same commodity in another country.


there are inadequate domestic supplies and wide dispersion
in the level of income. Unfortunately, when brought about
by price controls, an improvement in food distribution in
the short run may dampen production in subsequent
periods. Also, prices set too low discourage farmers from
using productive but costly inputs, such as improved seeds,
fertilizers, irrigation, and pesticides-all needed to increase
production.
Fortunately, the updated survey of September 1976,
indicates some shift in government policies from controls
on producer prices to support price systems that establish
minimum guaranteed prices.
An increase in these minimum prices, for instance,
almost certainly stimulated production of rice in Thailand.
Previously, the Government was paying farmers a price far
below the world price level. With the decline in rice prices
since mid-1974, perhaps the minimum guaranteed price
should now be lowered. But in any case, the changes in the
level of production indicate-if they do not prove-the
responsiveness of production to changes in prices.
Procurement policies. Certain procurement policies
and forms of noncompetitive buying can be constraints that
lead to lower than potential production. Such policies-
where a government or a government-sponsored agency is
the sole buyer of a product-may have adverse effects on
both producers and consumers. Very often these practices
are used to secure supplies for consumers at relatively low
prices or to secure revenue for the government. However,
producers, especially marginal producers, may be deprived
of a price that covers total cost, and the consumer
eventually may find himself paying more for a smaller
output.
Noncompetitive buying is practiced in many developing
countries such as India, Pakistan, Sri Lanka, and many
Latin American and African countries. Commodities
commonly subject to these practices are wheat, rice, and
vegetable oils.
In some countries where noncompetitive buying causes a
loss to farmers, government subsidies are given to farmers
to more or less offset the loss. One effect is a heavy burden
on the government's budget since the government must
subsidize both consumers and food producers. Practices in
Iran and Venzuela typify this arrangement. These two
countries are oil-rich OPEC (Organization of Petroleum
Exporting Countries) nations and few developing countries
can afford to copy their example. Such policies, although
they seem plausible, can lead to a lower production level
than under a competitive system and perhaps distort the
cropping patterns of these countries. This can result from
the lag between paying production costs and receiving the
subsidy, or from the inequity of subsidies among various
types of enterprises.
Export controls and taxes. To domestic producers,
export controls limit, sometimes absolutely prohibit, for-
eign sales-thus shrinking geographically and economical-
ly the total marketing area available to them. The supply of
agricultural commodities offered for sale within the coun-
try exercising export controls, of course, will be increased






Sat least in the short-run. The short-run increase in supply
most likely will reduce prices and expand domestic sales.
However, the reduced price may be one that produces
revenue that is less than cost for marginal producers, thus
reducing the incentive to increase, or perhaps even to main-
tain, production levels.
An export tax will not limit legally the geographic mar-
ket available to producers, but economically the effect may
be somewhat the same. This is the case when the export tax
means a higher price to various importing nations-espe-
cially if these nations can find alternative sources of supply,
or other commodities that will serve as substitutes. If on the
other hand, the world market is very competitive and mar-
ket forces determine prices, the exporting nation must sell
at prevailing prices. Since the export tax cannot be added to
the price in this case, the tax becomes a tax on producers
and the disincentive naturally follows.
In the case of both export controls and taxes, foreign
exchange earnings are most likely foregone that may be
badly needed to import essential items. Such items may be
impossible to obtain domestically or obtained only with the
application of a great deal of time, energy, and resources-
all of which could be used in other ways to increase
standards of living.
Import subsidization. In an effort to control inflation
and to provide consumers with an adequate supply of basic
food commodities, some governments resort to import
subsidization. That is, governments import at one price but
sell domestically at a lower price, or perhaps even distri-
bute freely. Unless incomes are so low that the food would
not have been purchased in any case, this policy obviously
will lower prices and discourage producers within the
country from expanding production.
For example, improved seed varieties, around which the
"green revolution" was built, require intensive use of
fertilizers, irrigation, and pesticides. Unless domestic prices
are high enough-or other incentives are available to justify
the investment in such costly inputs-producers have no
incentive to expand their production.
Exchange rate controls. In general, controls on foreign
exchange proceeds of agricultural exports take the form of
requirements to surrender the proceeds within a specified
time or to surrender the proceeds at a specified minimum
price of the item exported. Limiting the time an exporter
may hold his proceeds in dollars or other convertible
currencies may force him to exchange his proceeds at an
undervalued level. By waiting, he might benefit through a
devaluation of his native currency, which would allow the
exporter to receive more local currencies per dollar
surrendered.
Specifying a minimum export price at which foreign
exchange proceeds are submitted, may at times remove the
flexibility an exporter needs to consummate a sale. Either
the exporter foregoes a sale-if the world market price is
beneath the specified price-or the exporter may be
required to make up the difference between the price he can
obtain in the world market and the specified price level at
which he must submit foreign exchange proceeds.


Restrictions on land tenure and credit. Imposition of
these restrictions on farmers constitutes a serious barrier to
the expansion of agricultural production in many develop-
ing countries. Despite the increased number of farmers
owning land because of land reform, many developing
countries have subsequently experienced lower output.
While land is an important factor of production, other
factors must be combined with land to maintain or increase
the level of production. During the early stages of adjust-
ment after land reform, new owners are usually farm
workers with limited experience in farm management and
most likely with little or no liquid funds to cover the
variable costs of production. Poor management and the
lack of funds result in inefficient use of resources and a
decline in output unless these deficiencies are corrected.
Restrictions on land tenure that limit farm size could
discourage farmers from investing highly productive
inputs, and cause a loss of scale economies. In the
Dominican Republic, for example, the land tenure law,
which limits rice land ownership to 80 acres, has been one
reason that country has needed to import rice over the past
several years. The effect of this policy has been further
amplified by controls on farm prices.
In another example, after Tunisia eliminated its policy of
requiring State-controlled farm organizations in the late
1960's, the country per capital agricultural production rose
by 58 percent from the average level in 1961-65 to 1976. For
all developing countries there was only an 8 percent gain.4
Rural credit policies that limit the amount of credit given
to small farmers have limited the expansion of the agri-
cultural production in many developing countries. For
example, the Government of Indonesia, in order to com-
pensate rice producers for low rice prices, offers them
subsidized credit. However, since the banking system views
small farmers as high-risk borrowers, only the larger
farmers benefit from the subsidized financing that
facilitates the adoption of new production techniques.
Therefore, it is only the larger farmers who have the
negative impact of low rice prices partially neutralized
through Government-subsidized credit programs. This
results in inefficient resource allocation by depriving a large
number of small farmers of liquidity to improve their level
of production. In many other countries, applications for
loans require a land title, which is not generally easy to
provide.
Restrictions on domestic movement of agricultural
products. Whatever the political justification may be, the
prohibition on shipment of farm products from surplus
districts to deficit districts within a country obviously
discourages farmers in the surplus areas from producing
more. Almost certainly the existence of such restrictions in
India amplified the impact of food shortages following the
1974 drought and floods in India, where some States, such
as West Bengal, were hit harder than others.


4Data from USDA, Economic Research Service, Food
Production Indices, 1977.







Another example is Indonesia, where inter-island ship-
ments of rice are prohibited except under Government
auspices.



Conclusions

,While it is beyond the scope of this report to present a
quantitative evaluation of the net effect of various policies
in different countries, a general indication about each
country's need to expand its agricultural output is indicated
by Table 1. For two-thirds of the countries included in this
study, containing 1.6 billion people, the long-term rate of
growth (1952-72) in domestic demand for food exceeded
that for food production. Furthermore, the most optimistic
food projections indicate that Asian developing nations
will continue to be heavy foodgrain importers through
1985. These projections also indicate that India, Pakistan,
Bangladesh, and Sri Lanka will continue in most years to be
heavy grain importers within this region for the next
decade.


The ability of various countries to import food at present
is indicated in a general way by the data in Table 2. Many of
these countries have current account deficits and a low level
of reserves relative to the level of their imports. Those with
good financial positions are mainly petroleum-producing
countries, or supported by petroleum rich countries.
These data also indicate the ability of various countries
to import such additional farm inputs as fertilizers,
pesticides, and farm machinery. Recent estimates by the
FAO (Food and Agriculture Organization) Emergency
Fertilizer Supply Scheme indicate that the four Asian
nations mentioned above accounted for nearly 80 percent
of the world fertilizer shortfall in 1974.5
The nine disincentives discussed here are of course only
some of the factors affecting total world food production.
But it seems reasonable that food production could be
substantially increased if these restrictive policies were
replaced with incentives for farmers.


5Tennessee Valley Authority, An Appraisal of the Fertilizer
Market and Trends in Asia, 1975.















TABLE 1. ANNUAL GROWTH RATE OF POPULATION, FOOD SUPPLY, AND DOMESTIC
DEMAND FOR FOOD, SELECTED DEVELOPING COUNTRIES, 1952-721

(Percent)

Food Domestic Food Domestic
Country Popu- produc- demand Country Popu- produc- demand
lation tion for food lation tion for food

Costa Rica ......... 3.8 5.4 4.8 Bangladesh ........ 3.5 1.6 ---
Dominican Rep ..... 3.3 2.2 3.6 Burma ............ 2.2 2.4 3.3
El Salvador ....... 3.0 3.6 4.1 India ............. 2.1 2.4 3.0
Guatemala ......... 3.0 4.1 4.2 Indonesia ......... 2.5 2.0 2.6
Honduras ......... 3.3 4.0 4.2 Malaysia (West) ..... 3.0 5.2 4.3
Mexico ........... 3.4 5.3 4.3 Pakistan .......... 3.0 3.0 4.2
Nicaragua ......... 3.0 4.9 3.9 Philippines ........ 3.2 3.2 4.2
Panama ........... 3.2 4.3 4.8 Sri Lanka ......... 2.5 3.6 3.1
Trinidad & Tobago 2.5 1.9 4.8 Thailand .......... 3.1 5.3 4.6

Argentina ......... 1.7 1.8 2.0 Egypt ............. 2.6 3.4 3.8
Bolivia ............ 2.3 5.0 2.7 Iran.............. 2.8 3.3 6.4
Brazil ............. 3.0 4.4 4.0 Jordan ............ 3.2 1.8 6.6
Chile ............. 2.5 2.2 3.3 Syria ............. 3.0 1.8 4.6
Colombia........... 3.3 3.1 3.9 Turkey ........... 2.7 3.0 3.8

Ecuador ........... 3.3 5.4 4.0
Paraguay ........... 3.1 2.6 3.4
Peru.............. 2.9 2.9 3.9
Uruguay .......... 1.3 0.8 1.2
Venezuela ......... 3.5 6.1 4.0

Angola ............ 1.8 2.7 3.0
Ghana ............ 2.9 3.9 3.2
Ivory Coast ........ 2.2 4.9 2.6
Kenya ............ 3.0 2.6 4.6
Liberia............ 1.5 1.1 1.8

Morocco .......... 3.0 2.8 3.3
Nigeria ............ 2.4 2.0 3.1
Senegal ............ 2.2 3.3 1.2
Sierra Leone ....... 2.0 2.4 3.9
Zaire ............. 2.0 0.2 2.3

a Data not available for Belize.


Source: Monthly Bul. of Ag. Econ. & Stat. 9 Vol. 23, Sept. 1974, FAO, Rome.















Table 2. MEASURES OF EXTERNAL FINANCIAL POSITION OF
SELECTED DEVELOPING COUNTRIES'

Balance on Import Balance on Import
Country current coverage3 Country current coverage
account2 account2

Mil doL No. of months Mil. dol. No. of months

Costa Rica .......... 205 1.6 Bangladesh .......... 159* (4)
Dominican Rep ....... 60* 1.7 Burma ............. 80* 11.4
El Salvador ........... 22 3.7 India ............... 1,302** 7.6
Guatemala .......... 4 4.9* Indonesia ........... -1,037* 3.1
Honduras ........... 112 2.9* Malaysia (West) ....... 186* 7.8
Mexico ............. -4,057* 2.8* Pakistan ............ -1,037* 3.0
Nicaragua ........... 184* 3.4 Philippines .......... 923* 5.0
Panama ............. 132* .6** Sri Lanka ........... 109* 1.9
Trinidad & Tobago .... 144 6.1 Thailand ............ 607* 6.4

Argentina ........... 610 6.4 Egypt .............. -1,397* 1.2
Bolivia ............. 159* 3.4* Iran ................ 5,375* 7.7
Brazil .............. -7,080* 5.8 Jordan ............. 67* 8.0*
Chile ............... 42 .7* Syria ............... 93* 5.3*
Colombia ........... 80* 4.2* Turkey ......... .. -1,841* 2.6
Ecuador ............ 1 6.2
Paraguay ............ 72* 6.5*
Peru ............... -1,569* 2.2*
Uruguay ............ 203* 4.8*
Venezuela ........... 2,206* 15.4

Angola ............. 301*** (4)
Ghana.............. 34* 2.3*
Ivory Coast .......... 307* .7
Kenya.............. 189* 3.4
Liberia ............. 74* .5*
Morocco ............ -1,552* 1.8**
Nigeria ............. 259* 11.5*
Senegal ............. 66** .6*
Sierra Leone ......... 63* 1.8*
Zaire ............... 610* .7*


11976 unless otherwise noted. = 1975, **= 1974,
*** = 1973. Data not available for Belize.
2Includes international transactions with regard to
goods, services (insurance, transportation, etc.) and


unilateral transfers (gifts, worker remittances, etc.).
3The number of months of imports covered by
most recent level of international monetary reserves.
4Not available.


NOTE: In the tables that follow X indicates the existence of a disincentive.











APPENDIX

POTENTIAL DISINCENTIVES TO AGRICULTURAL PRODUCTION BY COUNTRY AND COMMODITY, 1976

Price controls Export controls Restrictions on:
Non- Import Foreign
Country and commodity At At competi- Physical sub- exchange Credit Internal
producer retail tive limita- Export sidies controls and land move-
level level buying tions taxes tenure ments

Central America
Costa Rica
Rice ........................... X X ( ) --- X --- ---
Beans .......................... X X ( ) --- X -
Beef ................... ....... --- X (') (1) X --- --- --
Sugar ............... .......... (1) X ( ) --- X--- -

Dairy .......................... X X --- --- --- --- ---
Bananas ....................... --- --- --- --- X --- --- --- ---
Coffee ......................... ( ) (1) (.) --- X --- -- -
S Corn ........................... X X (') --- X--- -

Dominican Republic
Rice ................. ......... X X --- X --- --- --- X X
Beef ........................... X X --- X X --- --- X -
Sugar .......................... --- X --- --- X --- --- X -

Corn ........................... X X --- X --- --- --- -
Dairy .......................... X X --- --- --- --- --- X -
Cocoa .......................... --- --- --- --- X --- --- --- ---

El Salvador
Meat ........................... --- --- --- X --- --- --- ---
Milk ........................... X X --- --- --- --- --- -
Grains .......................... X X --- X --- --- --- --- ---

Sugar............................ X X X X --- --- --- -
Coffee ........................... --- --- --- X X --- --
Other foodstuffs ................... X X X --- --- --- --- -


-Continued









APPENDIX

POTENTIAL DISINCENTIVES TO AGRICULTURAL PRODUCTION BY COUNTRY AND COMMODITY, 1976-Continued

Price controls Export controls Restrictions on:
Non- Import Foreign
Country and commodity At At competi- Physical sub- exchange Credit Internal
producer retail tive limita- Export sidies controls and land move-
level level buying tions taxes tenure ments

Central America-(cont.)
Guatemala
Meat ........................... X X --- X X --- --- X
Sugar .......................... X X --- X X --- --- --- ---
Cotton ......................... X --- --- X X --- -
M ilk ........................... X X -
Coffee ......................... --- --- --- X X --- --- --- -
Bananas ............... ......... X -- --- ---

Corn ........................... X X --- X --- ---
Rice ........................... X X --- X-- -
oa Beans .......................... X X --- X --- --- --- --- ---
Cattle .................. ...... --- --- --- X X -
Tobacco ........................ --- --- --- X X --- --- X X

Honduras
Sugar .......................... X X X --- X --- --- X
Bananas ........................ --- --- --- --- X --- --- X -
Milk ........................... X X --- --- --- --- --- X
Cattle .......................... --- --- --- --- -- --- X -

Mexico
Tobacco .................. .... --- --- X --- --- --- --- X -
Sugar .......................... X X --- X --- --- --- X -
Livestock ....................... --- --- --- X X --- --- X X
Grains/oilseeds ................... --- --- --- X --- --- --- X ---
Other foodstuffs .................. --- X --- X X --- --- X X
Nicaragua
Milk ........................... X X --- --- --- --- --- ---
Cotton, Coffee, Tobacco ........... --- --- --- --- X --- --- X



-Continued









APPENDIX

POTENTIAL DISINCENTIVES TO AGRICULTURAL PRODUCTION BY COUNTRY AND COMMODITY, 1976-Continued

Price controls Export controls Restrictions on:
Non- Import Foreign
Country and commodity At At competi- Physical sub- exchange Credit Internal
producer retail tive limita- Export sidies controls and land move-
level level buying tons taxes tenure ments

Central America-(Cont.)
Bananas, Rice, Sugar .............. X X --- --- X --- ---
Hides, Cattle, Beef ................ -- -- --- X -- --- --- -
Cottonseed ...................... --- --- --- X --- --- --- ---

Panama
Beef ........................... X X --- X --- --- ---
Other consumer item .............. X X X --- --- X --- --

Trinidad and Tobago
Broilers. ......................... X X -- --- --- ---
S Rice ........................... X X X --- --- X --- -
Copra ........................... X --- --- --- ---

Belize
Sugar .......................... X X --- --- X --- --- X -
Beef ........................... X X --- --- --- --- --- X X
Most foodstuffs .................. X X --- --- --- --- --- X -

South America
Argentina
Beef .......................... ---- --- X --- X ---
Grains .......................... --. --- --- X --- X
Oilseeds .................... --- --- --- X X --- X

Vegetable oils .................... -- -- --- X --- X
Oilseed products ................. --- --- --- X X --- X -- -
Other commodities ............... --- --- --- --- X --- X --- -

Bolivia
Cotton ....................... --- --- --- --- X -- --- -
Many food products ............... X X X -- -- X

-Continued








APPENDIX

POTENTIAL DISINCENTIVES TO AGRICULTURAL PRODUCTION BY COUNTRY AND COMMODITY, 1976-Continued

Price controls Export controls Restrictions on:
Non- Import Foreign
Country and commodity At At competi- Physical sub- exchange Credit Internal
producer retail tive limita- Export sidies controls and land move-
level level buying tions taxes tenure ments

Brazil
Beef ........................... X --- --- --- --- --- --- ---
Milk ........................... X X --- --- --- --- --- --- ---
Soybean oil ..................... --- --- --- X --- --- --- ---
Frozen orange juice concentrate ...... -- --- --- (1) --- --- --- -

Sugar .......................... X X X X (1)
Cocoa .......................... --- --- --- --- X --- --- ---
Coffee ......................... --- --- --- --- X --- --- ---


5 Chile
Wheat & wheat prod............... X X X X --- --- X X -
Sugarbeets ...................... X X X X --- --- X X -
Vegetable oil .................... X X --- --- --- --- X X--

Beef ........................... --- --- --- --- --- --- X X ---
Milk & milk prod ................. --- --- --- --- --- --- X X -
Rice ........................... --- --- --- --- --- --- X X ---

Columbia
Sugar .......................... X X X X --- --- X --- X
Corn & feedgrains................. ------ --- X --- --- X --- -
Soybeans ....................... --- --- X X --- --- X --
Coffee ......................... X --- X X X --- X --- X
Wheat .......................... --- X X --- --- --- X --- X

Cotton ......................... -- --- --- X --- --- X ---
Palm oil ........................ --- X X X --- --- X --- ---
Cocoa .......................... --- X --- X --- --- X ---
Tobacco ........................ --- X --- X --- --- X ---
Beef ............................ --- X --- X --- --- X ---


-Continued










APPENDIX

POTENTIAL DISINCENTIVES TO AGRICULTURAL PRODUCTION BY COUNTRY AND COMMODITY, 1976-Continued

Price controls Export controls Restrictions on:
Non- Import Foreign
Country and commodity At At competi- Physical sub- exchange Credit Internal
producer retail tive limita- Export sidies controls and land move-
level level buying tions taxes tenure ments

Ecuador
Coffee, cocoa .................... --- --- --- --- X --- --- ---
Sugar .......................... --- -- --- X X --- --- ---
Bananas ........................ --- --- --- --- X --- --
Most basic foods .................. --- X --- --- --- --- --- X ---
Wheat .......................... X --- --- --- --- --- --- --- ---

Paraguay
Beef ........................... X X --- X --- --- --- -
Soybeans ....................... X --- --- --- X --- ---
Wheat .......................... X --- --- --- --- --- ---
Sugarcane ....................... X --- --- --- ------ --- --

Peru
Livestock ....................... --- --- --- X X --- --- X ---
Meat ........................... X X X --- --- ---
Milk ........................... X X X --- --- --- ---
Other dairy prod ................. X X --- --- --- X --- ---
Wheat .......................... X X X X --- --.. -

Rice ........................... X X X X --- --- ---
Sugar .......................... X X X X --- --- --- --- ---
Potatoes ........................ X X X --- --- -
Beans .......................... X X X --- --- --- --- --- -
Coffee ......................... X X X --- --- --- --- -
Vegetable oils .................... X X --- --- --- X --- ---
Feedgrains ...................... X X X --- --- X --- --- ---
Oilseeds ......................... X X X --- --- X -- ---
Fish meal & oil ................... --- --- X X --- --- ---


-Continued









APPENDIX

POTENTIAL DISINCENTIVES TO AGRICULTURAL PRODUCTION BY COUNTRY AND COMMODITY, 1976-Continued

Price controls Export controls Restrictions on:
Non- Import Foreign
Country and commodity At At competi- Physical sub- exchange Credit Internal
producer retail tive limita- Export sidies controls and land move-
level level buying tions taxes tenure ments

Cotton ........................ --- --- ---- X X-
W ool ........................... --- --- --- X X
Tobacco ........................ X X X X -- -

South America-(Cont.)
Uruguay
Beef ............................. X X --- --- --- --- X
Wheat.......................... --- X --- X --- --- X
Other grains ..................... -- --- X --- --- X --- --
Oilseeds ........................ --- --- --- X --- --- X --- --

Oilseeds products ................. --- --- --- X --- --- X -
W ool ........................... --- --- --- --- --- --- X
Other commodities ................ --- --- --- --- --- --- X ---

Venezuela
Sugar .......................... --- X --- (1) --- X
Tobacco ........................ --- X --- --- --- --- --- --- ---
Rice ........................... --- X --- (1) --- X

Feed grains ...................... --- X --- --- --- X --- --
Meat, milk & eggs ................. --- X --- --- --- X -
Oilseeds ........................ --- X --- --- --- X --- --- -

Africa
Angola
Coffee ......................... --- --- --- --- X

Ghana
Cocoa .......................... X --- X --- --- --- --- X
Seed cotton ..................... X --- X --- --- --- --- X


-Continued










APPENDIX

POTENTIAL DISINCENTIVES TO AGRICULTURAL PRODUCTION BY COUNTRY AND COMMODITY, 1976-Continued

Price controls Export controls Restrictions on:
Non- Import Foreign
Country and commodity At At competi- Physical sub- exchange Credit Internal
producer retail tive limita- Export sidies controls and land move-
level level buying tions taxes tenure ments


Ivory Coast
Coffee ......................... X --- X --- --- --- ---
Cocoa .......................... X --- X --- --- --- --- --
Rice ........................... .X --- X ---- --- ---

Kenya
Wheat .......................... X --- --- --- --- --- --- X -
Corn ........................... X --- --- --- --- --- --- X ---
Sugar .......................... X --- --- --- --- --- --- ---
S Rice ........................... X ---- -- --- --- ---

Liberia
Many commodities ................ X X X --- --- --- --- --- X

Morocco
Oranges ........................ --- --- --- --- X --- --- X ---
Wheat products .................. X X --- --- --- X --- --- -- -
Other staple foods ................ X X --- --- --- --- --- X -

Nigeria
Cocoa ...................... .... --- X --- --- --- --- X
Seed cotton ..................... X --- X --- --- --- --- X -

Senegal
Peanuts.......................... X --- X --- --- --- --- --- ---
Rice ................ ........ X --- X --- --- --- --- ---


Sierra Leone
Some commodities ................ X --- X --- --- --- --- X -


-Continued








APPENDIX

POTENTIAL DISINCENTIVES TO AGRICULTURAL PRODUCTION BY COUNTRY AND COMMODITY, 1976-Continued

Price controls Export controls Restrictions on:
Non- Import Foreign
Country and commodity At At competi- Physical sub- exchange Credit Internal
producer retail tive limita- Export sidies controls and land move-
level level buying tions taxes tenure ments

Zaire
Palm oil ........................ X X -- X --- --
Coffee ........................ --- X --- --- X --- -
Tobacco ........................ --- X X --- X --- --- ---

Rice .......................... X X --- --- --- --- .
Sugar ......................... X X --- --- --- --- -
Tea ........................... X --- --- --- X --- --- --- ---
Cocoa ......................... --- --- --- --- X --- --- ---

Far East
P Bangladesh
Wheat ................ ......... --- --- --- X --- X --- -
Rice .......................... --- --- --- X --- X --- --- ---
Eaible oils ..................... --- --- --- X --- X --- --


Burma
Rice....................... X --- X X --- --- --- ---
India
Coffee ................... X X --- X X --- X --- X
Jute .......:..... ............ --- --- --- X X --- X --
Cereals ........................ --- --- --- X --- --- X X ---
Rice .......................... X X x X --- --- X X X
wheat ................. ....... X A X X --- --- X X X

Cotton ........................ X --- X X --- --- X X X
Peanut oil, rape, mustard oil........ X X --- X X --- X X -
Peanuts, peanut-cake & meal ....... --- -- --- A X X X -
Many otner oils & oil products ...... -- -- x --- --- X X ---
Pepper ........................ --- --- --- --- X --- --- --- --


-Continued









APPENDIX

POTENTIAL DISINCENTIVES TO AGRICULTURAL PRODUCTION BY COUNTRY AND COMMODITY, 1976-Continued

Price controls Export controls Restrictions on:
Non- Import Foreign
Country and commodity At At competi- Physical sub- exchange Credit Internal
producer retail tive limita- Export sidies controls and land move-
level level buying tions taxes tenure ments


Indonesia
Rice ..........................
Sugar, cassava, copra, soybeans
and peanuts ...................

Malaysia (West)
Palm oil .......................
Rice ..........................


Paistan
Wheat, flour ........
Vegetable oil .......
Seed cotton ........
Kice ..............
Raw cotton ........


Philippines
Desiccated coconut ..............
Copra .........................
Coconut oil ....................
Tobacco .......................

Canned pineapple .................
Bananas .......................
Poultry-eggs ....................

Pork-beef .......................
Sugar ..........................
Rice ..........................
Corn ...........................

Sri Lanka
Kice ..........................


X ---


X ---


X


-Continued


. . .
. .. .

...........








APPENDIX

POTENTIAL DISINCENTIVES TO AGRICULTURAL PRODUCTION BY COUNTRY AND COMMODITY, 1976-Continued

Price controls Export controls Restrictions on:
Non- Import Foreign
Country and commodity At At competi- Physical sub- exchange Credit Internal
producer retail tive limita- Export sidies controls and land move-
level level buying tions taxes tenure ments


Far East-(Cont.)
Thailand
Rice .......................... --- X X X --- --- --
Sugar .................. ........ --- X -- X x -

Near East
Egypt
Cotton ................. ....... X --- X --- --- --- --- X X
Rice .......................... X --- X --- --- --- --- X X

Iran
Wheat ......................... --- X --- --- --- X --- (1)
Rice .......................... X --- --- --- X --- ---
Oilseeds & veg oil ...... .......... --- X --- --- --- X --- --- ---
Livestock, meat, milk............. --- X --- --- --- X --- X ---

Jordan
Wheat flour .................... --- X --- --- --- X ---

Syria
Seedcotton .................... .X --- X X --- --- --- X
Wheat and barley ................ X --- X X --- --- --- X X
Tobacco ....................... --- --- X --- --- --- --- ---
Sugar beets ..................... --- --- X --- --- --- ---


Turkey
Wheat.......................... --- X --- X --- X --- ---
Livestock ...................... --- X X --- --- --- --
Cotton ........................ --- --- --- --- --- --- --- -
Tobacco ........................ - --- --- --- --- --- --

SNot a disincentive at the present time because of the supply-demand situation.




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