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This monograph examines the impact of direct and indirect government intervention in Colombia's coffee, cotton, rice, and wheat markets between 1960 and 1983 and compares it with the situation that would have prevailed in the absence of intervention. The effects of intervention on prices, production, consumption, net foreign exchange earnings, the real income of producers and consumers, and transfers of income between agriculture and the rest of the economy are evaluated. As a result of state interventions (direct and indirect) in the market for the four commodities, production of these commodities fell below its potential level : a difference of 20 % for coffee and rice, 40 % for cotton, and 15 for wheat. These interventions were maintained even though they hurt agricultural producers. The report points out that one reason for intervention is to help consumers, but the results show that real annual incomes of the poorest consumers of rice and wheat derived products never increased by more than 3 percent. Direct intervention, however, isolated the domestic from the international market and thus prevented the transmission of variations in international prices to domestic prices.
Extract: Since the 1930s Colombia's economic policy has been directed to reaching three goals; to maintain self-sufficiency in food, to substitute domestically produced manufactured goods for imports, and in the 1970s to correct an ailing balance of payments by promoting exports. This paper describes Colombia's chosen path of import substitution which reflects that of so many Third World countries. It traces the effect on agriculture of tariffs, severe import restrictions or prohibitions, an overvalued national currency (peso), and export subsidies. The time span of the report is divided into two periods, 1953-67, when import substitution was the primary aim of foreign trade policy, and 1967-78, when exports were encouraged to aid the trade balance.
Nonformal general equilibrium, consistency approaches and frameworks. General, systems simulation approach. Linear programming models. Multi-level planning models. Operational usefluness of analysis and models to users.
The role of agriculture in the Colombian economy and main economic development, 1967-83; Model and empirical evidence; Supply response in Colombian agriculture; Income distribution and real wages in agriculture.
Liberalization, Crisis and Change in Colombian Agriculture provides an in-depth look at the impact of economic reforms on Latin American agriculture. It focuses on the experience of Colombia, a country with a large and complex agricultural sector. The bold attempt at reform initiated in 1990 posed strong challenges to Colombian agriculture, at a ti
In the early 1980s, Colombia's economic performance slowed. During 1983-84, when this study was completed, Colombia's external accounts were facing significant difficulties. Faced with growing balance of payments problems, the government initiated an adjustment program that emphasizes export development and fiscal and monetary restraint. Some of the problems of the external sector during the first half of the 1980s could be attributed to a slowdown in the expansion of noncoffee production and exports combined with a downswing in coffee prospects. Equally important, however, were the unfavorable trends in the capital markets, which were responding to the economic and debt woes of Latin America. While international factors are crucial to an understanding of the evolving situation, this study is focused on domestic measures managed by policymakers. The book also establishes some of the requirements of medium-term performance and, emphasizing the need for sectoral revitalization, it reviews growth options in agriculture. The book is in four parts. First, it discusses trade-related macroeconomic policies, with special attention given to their connection with agriculture. This discussion includes: an overview of issues and the effects of macroeconomic policy on the agricultural sector; a review of export policy focused on management of export incentives; and import policy alternatives. Second, the study includes an assessment of price policies in agriculture, including price support and import restrictions; price stabilization issues; and policies regarding coffee production and pricing, and issues related to agricultural diversification. Third, the study examines nonpricing issues that influence the production environment in agriculture, including public and private sector investment in agriculture, and direct policies aimed at increasing agricultural productivity. Finally, the study draws out the main conclusions of the work.