Subsidized imports, currency devaluation and agricultural decline: impact on food supply and demand balance in Zaire

Abstract

An adjusted small world trade liberalization model, with 1984 as the base year, was used to predict changes in Zaire's net agricultural trade due to export subsidies from developed countries, currency devaluation and stagnation in small-farm technology. Given the availability of low-cost food grain imports under the US Export Enhancement Program, Zairian wheat imports increase 8.2% in the intermediate run, assuming foreign exchange is available for food imports. Furthermore, if improvements in agricultural technology are not forthcoming, output of food and export crops will decline, resulting in a loss of revenue from the farm sector and a deterioration in the country's balance of trade. However, since 1983 currency devaluation appears to have had the largest impact on net trade in food and export crops.