Third World Development and Trade: Discussion

Abstract

The authors of the three papers have been asked to address one of the most controversial issues in the profession. They are to be commended for presenting very informative and stimulating papers. Their sincerity and conviction to the issue are beyond question. De Janvry and Sadoulet have shown that the growing demand for U.S. farm exports depends upon the successful income and export performance in the developing countries. There is no question that rapid income growth will generate foreign exchange earnings and allow developing countries to satisfy rising food demand through imports. Also there is no question that technological changes will increase agricultural production and that rapid growth strategies in selected industrial and agricultural products will result in a rapid growth in agricultural imports. However, the key question is to identify the conditions for successful economic growth when the large majority of the farm population in the developing countries does not control the market mechanism or the productive resources. Most of the less developed countries have the natural and human resources needed for their own salvation, but the obstacles are primarily much more complex and deeply rooted in the problems of underdevelopment, maldistribution of economic resources and income poverty, social injustice, and ultimately of politics (Sen). Relations between the rich and the poor countries of the world and the unequal distribution of power and access to wealth are the limiting factors to development, not technology, population, and certainly not a lack of business acumen (Hessels). Economic development is a process that can be usefully categorized as increased societal wealth, equity, and stability (Mellor). The idea that development means economic growth has been broadened to accommodate the perception that development also means meeting basic human needs. Growth with equity seems generally accepted as a development formula. With food-first policies, agricultural development would be measured in the welfare of the people in the developing countries. Thus, long-range solution to food shortages and economic development in the developing countries requires profound social, political, and economic changes. Kellogg, Kodl, and Garcia's paper addressed the influence of agricultural production in developing countries on agricultural imports in general. A generalized least squares (GLS) procedure has been used to permit for the correction of potential autocorrelation and heteroscedasticity. In their analysis they have shown that the estimated coefficients of per capita agricultural production were not significant to influence imports of agricultural goods and services of all developing countries. In addition, they have also shown a positive and significant relationship between per capita value of agricultural imports and per capita agricultural production for twenty-nine developing countries and a negative and significant relationship for thirty-six agriculture-declining countries. They concluded that agricultural imports into these countries increased either due to a rapid growth in domestic agricultural production or to compensate for possible growing imbalances between domestic production and demand. However, the statistical relationship between per capita agricultural production and per capita income indicated that there was the problem of multicollinearity. As a result, no significant evidence was obtained that would indicate increasing per capita agricultural production either causing a decline or an increase in imports of agricultural goods and services of developing countries. In general, the statistical results are suggestive, and no definite findings were obtained to justify the situation. Tesfa G. Ghebremedhin is an associate professor of agricultural economics at Southern University.