Aggregate agricultural supply response in developing countries: A survey of selected issues

Economic Development and Cultural Change

Volumn 45, Issue 2, 1997, Pages 393-410

  Schiff, Maurice ^a   Montenegro, Claudio E ^b  

^a WORLD BANK GROUP   (United States)

^b INTER AMERICAN DEVELOPMENT BANK   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

AGRICULTURAL PRICES; AGRICULTURAL SUPPLY; AGRICULTURAL SUPPLY RESPONSE; DEVELOPING WORLD; MARKET DEVELOPMENT; METHODOLOGICAL EVALUATION; PRICING POLICY; SUPPLY RESPONSE;

EID: 0030682449     PISSN: 00130079     EISSN: None     Source Type: Journal    
DOI: 10.1086/452279     Document Type: Review

References (54)

1. M. chiff and A. Valdés, The Political Economy of Agricultural Pricing Policy, vol. 4, A Synthesis of the Economics in Developing Countries (Baltimore: Johns Hopkins University Press, 1992).
2. Theodore W. Schultz, Transforming Traditional Agriculture (New Haven, Conn.: Yale University Press, 1964).
3. J. K. Galbraith and J. D. Black, "The Maintenance of Agricultural Production during Depression: The Explanations Reviewed," Journal of Political Economy 46, no. 3 (June 1938): 305-23.
4. D. G. Johnson, "The Nature of the Supply Function for Agricultural Products," American Economic Review 40 (1950): 538-64.
5. Schiff and Valdés, A Synthesis of the Economics in Developing Countries.
6. W. L. Peterson, "International Farm Prices and the Social Cost of Cheap Food Policies," American Journal of Agricultural Economics 61 (1979): 12-21.
7. A. Chhibber, "The Aggregate Supply Response: A Survey," in Structural Adjustment and Agriculture: Theory and Practice in Africa and Latin America, ed. Simon Commander (London: ODI, 1989).
8. M. Bond, "Agricultural Responses to Sub-Saharan African Countries," IMF Staff Papers 30, no. 4 (1983): 703-26.
9. C. L. Delgado and J. W. Mellor, "A Structural View of Policy Issues in African Agricultural Development," American Journal of Agricultural Economics 66 (1984): 665-70; A. De Janvry, "Integration of Agriculture in the National and World Economy: Implications for Agricultural Policies in Developing Countries," in Agriculture in a Turbulent World Economy: Proceedings of the Nineteenth International Conference of Agricultural Economists, ed. Allen Maunder and Ulf Renborg (Brookfield, Vt.: Gower, 1986).
10. C. L. Delgado and J. W. Mellor, "A Structural View of Policy Issues in African Agricultural Development," American Journal of Agricultural Economics 66 (1984): 665-70; A. De Janvry, "Integration of Agriculture in the National and World Economy: Implications for Agricultural Policies in Developing Countries," in Agriculture in a Turbulent World Economy: Proceedings of the Nineteenth International Conference of Agricultural Economists, ed. Allen Maunder and Ulf Renborg (Brookfield, Vt.: Gower, 1986).
11. J. M. Boussard, "Is Agricultural Production Responsive to Prices?" European Review of Agricultural Economics 12, nos. 1/2 (1985): 31-47, quote on 41.
12. W. Jaeger, "The Impact of Policy on African Agriculture: An Empirical Investigation" (Africa Department, World Bank, Washington, D.C., 1990).
13. Indirect taxation of agriculture is defined as the reduction in agriculture's domestic terms of trade due to expansive macroeconomic policies and industrial protection policies. See Schiff and Valdés, A Synthesis of the Economics in Developing Countries (n. 1 above), and "The Plundering of Agriculture in Developing Countries" (Trade Policy Division, Policy Research Department, World Bank, Washington, D.C., 1992).
14. Indirect taxation of agriculture is defined as the reduction in agriculture's domestic terms of trade due to expansive macroeconomic policies and industrial protection policies. See Schiff and Valdés, A Synthesis of the Economics in Developing Countries (n. 1 above), and "The Plundering of Agriculture in Developing Countries" (Trade Policy Division, Policy Research Department, World Bank, Washington, D.C., 1992).
15. K. Cleaver, "Agricultural Policy Reform and Structural Adjustment in Sub-Saharan Africa: Results to Date" (Africa Department I, World Bank, Washington, D.C., 1988).
16. H. Binswanger, "The Policy Response of Agriculture," in "Proceedings of the World Bank Annual Conference on Development Economics," supplement to the World Bank Economic Review and World Bank Research Observer, ed. Stanley Fischer and Dennis de Tray (1989).
17. A. Krueger, M. Schiff, and A. Valdés, "Agricultural Incentives in Developing Countries: Measuring the Effect of Sectoral and Economywide Policies," World Bank Economic Review 2, no. 3 (1988): 255-71; Schiff and Valdés, A Synthesis of the Economics in Developing Countries, and "The Plundering of Agriculture."
18. A. Krueger, M. Schiff, and A. Valdés, "Agricultural Incentives in Developing Countries: Measuring the Effect of Sectoral and Economywide Policies," World Bank Economic Review 2, no. 3 (1988): 255-71; Schiff and Valdés, A Synthesis of the Economics in Developing Countries, and "The Plundering of Agriculture."
19. A. Krueger, M. Schiff, and A. Valdés, "Agricultural Incentives in Developing Countries: Measuring the Effect of Sectoral and Economywide Policies," World Bank Economic Review 2, no. 3 (1988): 255-71; Schiff and Valdés, A Synthesis of the Economics in Developing Countries, and "The Plundering of Agriculture."
20. B. Balassa, "Policy Responses to Exogenous Shocks in Developing Countries," American Economic Review 76 (1986): 75-83.
21. Jaeger.
22. J.-P. Platteau, "Sub-Saharan Africa as a Special Case: The Crucial Role of Structural Factors" (Department of Economics, University of Namur, Belgium, 1993, mimeographed).
23. Even in the absence of credit rationing, if the financial system is small and undiversified, such as rural banks whose portfolios are concentrated in loans with highly correlated returns, the risk premium charged small farmers will be high and investments will only be profitable if financed out of own profits.
24. M. Schiff, "A Structural View of Policy Issues in African Agricultural Development: Comment," American Journal of Agricultural Economics, vol. 69 (1987).
25. T. A. Oyejide, "Accelerating Agricultural Growth in Sub-Saharan Africa: Discussion," American Journal of Agricultural Economics 66 (1984): 684-85; A. Braverman, "The Policy Response of Agriculture: Comment," in Fischer and de Fray, eds.
26. T. A. Oyejide, "Accelerating Agricultural Growth in Sub-Saharan Africa: Discussion," American Journal of Agricultural Economics 66 (1984): 684-85; A. Braverman, "The Policy Response of Agriculture: Comment," in Fischer and de Fray, eds.
27. S. Commander, "Prices, Markets and Rigidities," in Commander, ed. (n. 7 above), p. 236.
28. Y. Hayami and V. Ruttan, Agricultural Development: An International Perspective (Baltimore: Johns Hopkins University Press, 1985).
29. Schiff and Valdés, A Synthesis of the Economics in Developing Countries (n. 1 above).
30. Chhibber (n. 7 above), p. 55.
31. Schiff and Valdés, ËSynthesis of the Economics in Developing Countries.
32. Schiff and Valdés, "The Plundering of Agriculture" (n. 12 above).
33. A. O. Krueger, The Political Economy of Agricultural Pricing Policy, vol. 5, A Synthesis of the Political Economy in Developing Countries (Baltimore: Johns Hopkins University Press, 1992).
34. Schiff and Valdés, A Synthesis of the Economics in Developing Countries.
35. D. Cavallo and Y. Mundlak, "Agriculture and Economic Growth in an Open Economy: The Case of Argentina," Research Report 36 (International Food Policy Research Institute, Washington, D.C., 1982); J. E. Coeymans and Y. Mundlak, "Agricultural Sector Growth: Chile, 1962-82," in The Bias against Agriculture: Trade and Macroeconomic Policies in Developing Countries, ed. R. Bautista and A. Valdés (San Francisco: Institute for Contemporary Studies, 1992); and Y. Mundlak, D. Cavallo, and R. Domenech, "Agriculture and Growth: The Experience of Argentina, 1913-1984," in Bautista and Valdés, eds.
36. D. Cavallo and Y. Mundlak, "Agriculture and Economic Growth in an Open Economy: The Case of Argentina," Research Report 36 (International Food Policy Research Institute, Washington, D.C., 1982); J. E. Coeymans and Y. Mundlak, "Agricultural Sector Growth: Chile, 1962-82," in The Bias against Agriculture: Trade and Macroeconomic Policies in Developing Countries, ed. R. Bautista and A. Valdés (San Francisco: Institute for Contemporary Studies, 1992); and Y. Mundlak, D. Cavallo, and R. Domenech, "Agriculture and Growth: The Experience of Argentina, 1913-1984," in Bautista and Valdés, eds.
37. D. Cavallo and Y. Mundlak, "Agriculture and Economic Growth in an Open Economy: The Case of Argentina," Research Report 36 (International Food Policy Research Institute, Washington, D.C., 1982); J. E. Coeymans and Y. Mundlak, "Agricultural Sector Growth: Chile, 1962-82," in The Bias against Agriculture: Trade and Macroeconomic Policies in Developing Countries, ed. R. Bautista and A. Valdés (San Francisco: Institute for Contemporary Studies, 1992); and Y. Mundlak, D. Cavallo, and R. Domenech, "Agriculture and Growth: The Experience of Argentina, 1913-1984," in Bautista and Valdés, eds.
38. D. Cavallo, "Agriculture and Economic Growth: The Experience of Argentina, 1913-84" (paper presented at the 20th Conference of the International Association of Agricultural Economists, Buenos Aires, 1988); H. Hurtado, A. Values, and E. Muchnik, "Trade Exchange Rate, and Agricultural Pricing Policies in Chile," World Bank Comparative Studies Series on the Political Economy of Agricultural Pricing Policy (World Bank, Washington, D.C., 1990).
39. D. Cavallo, "Agriculture and Economic Growth: The Experience of Argentina, 1913-84" (paper presented at the 20th Conference of the International Association of Agricultural Economists, Buenos Aires, 1988); H. Hurtado, A. Values, and E. Muchnik, "Trade Exchange Rate, and Agricultural Pricing Policies in Chile," World Bank Comparative Studies Series on the Political Economy of Agricultural Pricing Policy (World Bank, Washington, D.C., 1990).
40. Schiff and Valdés, A Synthesis of the Economics in Developing Countries.
41. If, however, the estimation period was one of high availability of unused land (as, say, in Thailand) and if the availability of such land was significantly reduced over time, then the parameter value will provide an upward-biased estimate of the supply response to a future price increase.
42. However, Schiff and Valdés (A Synthesis of the Economics in Developing Countries [n. 1 above]) found that removal of direct interventions results in higher agricultural price variability in most countries examined.
43. R. E. Just, "An Investigation of the Importance of Risk in Farmer's Decisions," American Journal of Agricultural Economics 56 (1974): 14-25; M. Schiff, "The Competitive Firm under Uncertainty: An Application to Canadian Wheat Production," Canadian Journal of Agricultural Economics 34 (1986): 235-42.
44. R. E. Just, "An Investigation of the Importance of Risk in Farmer's Decisions," American Journal of Agricultural Economics 56 (1974): 14-25; M. Schiff, "The Competitive Firm under Uncertainty: An Application to Canadian Wheat Production," Canadian Journal of Agricultural Economics 34 (1986): 235-42.
45. S. L. Bapna, Aggregate Supply Response of Crops in a Developing Region (Delhi: Sultand Chand & Sons, 1980).
46. R. Lucas, "Econometric Policy Evaluation: A Critique," in The Phillips Curve and Labor Markets, ed. Karl Brunner and Allan H. Meltzer, Carnegie-Rochester Conference Series on Public Policy, vol. 1 (Amsterdam: North Holland, 1976), pp. 19-46.
47. This example was suggested to us by J. Quiroz.
48. This important point came to our attention through conversations with A. Valdés.
49. A. Valdés, "Agricultural Reforms in Chile and New Zealand: A Review" (paper presented at the Agricultural Economics Society Annual Conference, Oxford, March 31-April 3, 1993). Part of the paper was published as "Mix and Sequencing of Economywide and Agricultural Reforms: Chile and New Zealand," Agricultural Economics, vol. 8 (1993).
50. A. Valdés, "Agricultural Reforms in Chile and New Zealand: A Review" (paper presented at the Agricultural Economics Society Annual Conference, Oxford, March 31-April 3, 1993). Part of the paper was published as "Mix and Sequencing of Economywide and Agricultural Reforms: Chile and New Zealand," Agricultural Economics, vol. 8 (1993).
51. A. Valdés, "The Policy Response of Agriculture: Comment," in Fischer and de Fray, eds. (n. 14 above).
52. Valdés conversations.
53. Schiff and Valdés, A Synthesis of the Economics in Developing Countries.
54. J. Quiroz and R. Chumacero, "Trade Reform and the Real Exchange Rate: A Stochastic Equilibrium Perspective" (Policy Research Department, Trade Division, World Bank, Washington, D.C., 1993).