Malnutrition And Food Aid Programs: A Case Study From Guatemala Page: 52
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Food Aid as a Disincentive to Agricultural Production
Another important criticism to be considered in evaluating the
effects of PL-480 on the development process is the criticism that
it acts as a disincentive or deterrant to agricultural production in
recipient nations. In a report to Congress in 1975, J. K. Fasik of
the General Accounting Office stated that food aid acts as a disincen-
tive "by allowing the (recipient) governments to 1) postpone essential
agricultural reforms, 2) fail to give agricultural investment suffi-
cient priority, and 3) maintain a pricing system which gave farmers
an inadequate incentive to increase production" (Fasik/GAO 1975: 27).
However, the problem with this criticism is that it assumes that a
laissez-faire agricultural policy based on supply and demand will,
through its desire to maximize profits and/or profit rates, provide
the basic foodstuffs for general consumption. Ceiling prices on food,
much to Fasik's (and others) dislike, are humanitarian in that they
allow poor people to eat less expensively than otherwise.
There is ethnographical evidence that removing ceiling prices
does not necessarily encourage the agricultural production of food-
stuffs for domestic consumption (Rodeheaver and Rodeheaver 1980). For
example, in Guatemala, particularly in areas where agricultural con-
ditions are especially conducive, coffee for export is grown instead
of domestic grains, primarily because the world price of coffee is
more profitable than the domestic price of grain. While higher prices
result in more production, they may result in the production of non-
food products which are sold outside the country, thus not increasing
the domestic food supply.
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Rodeheaver, Daniel Gilbert, 1954-; Bates, Frederick L. & Murphy, Arthur D. Malnutrition And Food Aid Programs: A Case Study From Guatemala, report, May 1982; (digital.library.unt.edu/ark:/67531/metadc84342/m1/65/: accessed April 28, 2017), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT College of Public Affairs and Community Service.