Public Investment In Agriculture Research Articles

Cost-benefit Analysis of Agricultural Public Investment Supported by the Japanese Technical Cooperation

An on-farm facility consolidation (OFC) project, involving construction of irrigation ditches, drainage ditches and farm roads, was conducted as a public investment in a typical rice producing area on the Chao Phraya Delta by the Thai Government with the support of Japanese technical cooperation. Due to increased public awareness of government activities, demonstrating the effectiveness of public investment is considered extremely important in securing transparency and accountability in both countries. The purpose of this study was to apply a cost-benefit analysis to the OFC project. Empirical results showed that the total benefit was higher than total costs, even under a high social discount rate of 12% for two alternative plans, employing a conventional trapezoidal-shaped concrete lining ditch (trapezoidal ditch) and a U-shaped reinforced-concrete flume ditch (U-shaped ditch). The land-productivity effect accounted for most of the project benefits and shows that, in Thailand, an improvement of farmers' income is more critical than labor-cost savings. The renewal effect also needs to be considered, as this effect was the next highest to the land productivity effect. The trapezoidal ditch, with low initial costs in spite of high running costs and short durability in years, was superior to the U-shaped ditch with the opposite characteristics at a high social discount rate. However, a decrease in the social discount rate to less than 4% would make the U-shaped ditch superior to the trapezoidal one.JEL classification : H41, H43, H54, O22, O53, Q15

Stop‐and‐Go Agricultural Policies

AbstractThe optimal design of farm policy and public investment in agriculture in the presence of asymmetric information between the government and farmers is studied. It is shown that a mix of capped deficiency payments and voluntary paid land diversion can implement the optimal policy outcome. Optimal program design requires large farmers to farm all their land, and small farmers may or may not divert acreage. Decoupled policies are never optimal.

Output response to prices and public investment in agriculture: Indonesian food crops

This paper analyzes dynamic food crop supply response in Indonesia. The effects of technology, prices, and investments on output growth for rice, corn, soybean, and cassava are examined. The analysis generates crop-wise area, yield, and input demand parameters suitable for the evaluation of price and investment policies, and shows the large impact of public investment in agricultural research, extension, and irrigation on long-run output growth in Indonesia. Elimination of the fertilizer subsidy and reinvestment of the resulting fiscal savings in research, extension and irrigation would produce large benefits.

The political economy of underinvestment in agriculture

Owners of sector-specific factors form political lobbies in order to influence government policy. In a closed economy, public investment in agriculture shifts the internal terms of trade against agriculture (due to Engel's law) and thereby increases the surplus of unorganized classes which cannot be appropriated by the lobbies. As a result, the latter push the government to increase subsidies (or reduce taxes) to their members at the expense of public investment which falls below its socially optimal level. Trade liberalization, by making the terms of trade invariant to public investment, tends to reduce the extent of under-allocation of public investment in agriculture.

Agricultural growth, rural poverty and environmental degradation in India

Based on the author's research over the past 20 years, this volume contains his observations on the Indian economy. The issues discussed include: the spread of agricultural growth, in the 1980s, to the less developed regions, and the consequent decline in real poverty there; the paucity of resources, in the same period, caused by mounting subsidies; the fall in real public investment in agriculture, caused by this paucity; increasing environmental degradation due to the slow rate of land - augmenting technological change; and the inequitable distribution of gains in agriculture.

Food security and rural development in North Africa

This study focuses on the challenges facing governments of North Africa (Algeria Egypt Libya Morocco Sudan and Tunisia) in realizing the common development objective of food self-sufficiency from domestic production. There is a disequilibrium between the demand for food and domestic supply. Sustained high rates of agricultural growth and increases in the real income per person working in agriculture have not occurred. These conditions are likely to continue. The evidence suggests that reduced inequality of land distribution would increase the benefits of agricultural growth to poor farmers and would cause poverty to decline. The degree of inequality in the size distribution of land explains only 4% of the variation in agricultural gross domestic product growth rates in a sample of 20 developing countries. In Egypt land reform has contributed to a redistribution of property and the proportion living in poverty declined from 56.1% in 1951 to 17.8% in 1982. The decline is due to controls on the rent payments among 66% of landowners earnings from nonland assets (livestock) and nonfarm activities and remittances from labor migration. Quality of life is more likely to be improved with a more egalitarian structure. North African governments have not adequately solved the problems of food insecurity and rural development. The rising fundamentalist Islamic principles will probably influence policy through the application of moral human conduct. How ethical principles of social welfare will reform agricultural credit land mortgage property rights to land and protection of entitlements of the rural poor is yet to be seen. Over the past 40 years changes in land distribution have benefitted the fellaheen. Agricultural extension programs in North Africa aim to improve the role of women as housewives and mothers but not as farmers. Governments are committed to a public investment in agriculture. Limited information suggests that private investment in agriculture is constrained by cumbersome bureaucratic procedure. State power rests in control of irrigation and state farms which affect longterm gains. Foreign investment concentrates on high profit small risk endeavors and export crops.

Policy Change in an Authoritarian Regime: Mexico Under Echeverría

The six-year presidency orsexenioof Luís Echeverría Alvarez was initiated in December of 1970. Six years later, significant changes had taken place in the public policies espoused by the Mexican regime. Most importantly, perhaps, the federal government shifted its public investment priorities away from an overriding preoccupation with industrial development toward greater concern for agricultural development. From 1971 to 1976, Echeverria's administration allocated more money to the agricultural sector than any sexenio since that of Miguel Alemán (1946 to 1952). The change occurred gradually, federal public investment in agriculture growing from 14.5% of the total in 1971 to 20% budgeted for 1975 and 1976. Increased attention to agriculture was achieved primarily through proportional reductions in investments for industrial and infrastructure development. Along with a revision in sectoral allocations went a change in policy concerning both the anticipated outcome and the target population for agricultural investment.