In an article recently published in this Journal, Deena R. Khatkhate analyses some of the real effects of foreign surplus disposal on underdeveloped economies.' The author refers to a paper by T. W. Schultz, presented before the 1960 meeting of the American Farm Economic Association, in which he suggested that surplus disposal may have adverse effects on agricultural production in the receiving countries thereby impairing their long-run economic development.2 Khatkhate, taking Schultz's general warning as a starting point, presented a theoretical analysis showing why there is no reason to believe that this danger exists. After giving a detailed account of the price response mechanism of agricultural producers in India he concluded that since agricultural production (acreage) in underdeveloped agrarian economies is not responsive to price changes the question is to determine the extent to which surplus disposal has prevented food prices from rising, thereby checking wage inflation in the nonagricultural sector of the economy. My purpose is to suggest that Mr. Khatkhate has placed too much reliance on the well-known theory of the backward sloping supply curve in underdeveloped countries as a basis for ruling out potential adverse effects of surplus disposal on agriculture. I shall argue furthermore that the surplus disposal program as it has been administered in Pakistan has had substantial negative income effects for agriculture, very likely retarding the agricultural development effort in that country.