Government intervention in Latin American agriculture, 1982-87

174 Pages·1991·11.2 MB·English

by  Roberts, Donna H

Historic, Archive Document
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Latin American Agriculture, }
1982-87
Division
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Paul Trapido
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Government Intervention in Latin American Agriculture, 1982-87. By Donna
Roberts and Paul Trapido (ed.). Agriculture and Trade Analysis Division, Economic
Research Service, U.S. Department of Agriculture. Staff Report No. AGES 9152.
ABSTRACT
This study examines the pattern of government intervention in the agricultural markets
of the six largest economies in Latin America during 1982-87. Producer and
consumer subsidy equivalents (PSE/CSE’s) are used to summarize the effects of a
wide range of commodity, sector, and economy-wide policies that can be compared
across commodities, across countries, and across time. Six chapters provide
background material on the economy and policies of each country along with
documented subsidy equivalent estimates. During 1982-87, Latin American
policymakers abandoned the statist approach to development, but adhered to import-
substitution strategies, which required some government intervention. In addition to
commodity specific and/or sectoral policies, economy-wide measures---particularly
exchange rate policies---had a decided effect on transfers to and from the agricultural
sector in all six countries.
Keywords: Latin America, agricultural policy, government intervention, subsidy
equivalents, Argentina, Brazil, Chile, Colombia, Mexico, Venezuela
ACKNOWLEDGMENTS
The editors are indebted to the 14 economists from the Economic Research Service
(ERS), three universities, and the Inter-American Development Bank (IDB) who wrote
the introduction and the six country chapters in this report. These economists revised
and updated subsidy equivalent calculations that previously appeared in Estimates of
Producer and Consumer Subsidy Equivalents, SB-803, April 1990, for this report.
Their names appear at the beginning of each section. We thank Maurice Landes,
Gene Mathia, Tom Vollrath, Daniel Pick, and Ed Allen for their comments on early
drafts of this document. Alan Webb’s careful review was particularly valuable. The
editors are especially grateful for the critique of the Colombia chapter, generously
provided by Dr. Hugo Valdes Sanchez. Linda Scott, Ricardo Krajewski, and Liana
Neff coordinated the data for graphical presentation. Excellent clerical assistance was
provided by Brent Wyborney in the last stages of the preparation of this document.
Nora McCann and E. Wynette Phillips deserve special recognition for their patient
attention to detail in the preparation of the numerous tables thata ppear in this feport.
7 OF AGR! t
Ni AL."A GRICULTL JRA l t
FEB 6 1992
1301 New York Ave., NW. eee renee
Washington, DC 20005-4788 September 1991
CONTENTS
AGRICULTURAL POLICY REFORM:
ISSUES AND IMPLICATIONS FOR LATIN AMERICA .................... 1
introduction ~2 0.5 OO. FQN Od aks mice! TR OEM Se ee oe 1
How Governments Intervene in Agriculture ..........2. ee. ee.e .ee.e .ee s 2
How Is Government Intervention Measured? ...............-.e-e2e 0e2ee 4
Summary of Government Intervention in Latin American Agriculture ........... 7
Effects of Agricultural Policy Reforms on Latin American Countries ............ 13
Conclusion ¥ J2°8 NYY ORI ae re SR eee a: eee STS) Sees 14
References (2-2 i) ) SO 2) SRY & GE ee ee ee a SS ee. oe 16
ARGENTINA °). 28 SY eee eke ete eee”, ee Sen ee ee ee ee 19
INtrOCUCTION Brrr eo Se Fr een eee Aegean eS? ce, oe ere ee ee 19
Economic and Agricultural Developments, 1982-87 ...................-..- ve]
Policies in the 1980’s ...22 Pere ene ee ee 20
Macroeconomic and Trade Policy Developments ......................- 20
Agricultural-Policy Developments! "'P2..%295 PIS SS ee, eee 21
Export Taxes . 2 2hS200% S096. SISO i Jae 2 ae eee 21
Exchange Rate Policy) 2.05.0. 6.0 See 9 ces 8 eee ee ee 22
Input PolicieS:..... so... 406560. 2-5: DID oe ee eee 22
Estimation of Policy Intervention in Agriculture ..................2. e0e 2ee e 22
Policy Coverage ...2 1... 2 USP see 23
PSE Results by Commodity. ......... a. shoe. cs a ce 23
PSE'Results*by’Policy Vr 8.2? FO Seen ae st, SE Set ae, 24
COonicluiSion 22. Ay el IS oe antec atau etree eest naee ee ake ee aa 25
References!) 27) 2 Sent! . UMM Se TR Seer ee. tee eee eee 27
Methodology: Appendix: 25.02). GeSaO! XS MS eee 28
Export-Taxes? 227.2 Pet DS) Se, eet tee et eaoes t enh tee a 28
Exchange Rate’Adjustment’? . {Pos Me? 0 BOY Ie Se eS eee 28
BRAZIL er See PR TERI Mare od tee ee, ee 35
Introduction Wy. ts So ss Se tee ee, Stee ee ee 35
Economic and Agricultural Developments, 1982-87 ....................0.. 35
Policies’ the* 1980's PSPS ns . SRO eer re ee ee. ee, ae, eee ee 36
Macroeconomic and Trade Policy Developments ....................... 36
Agricuitural’Policy Developments. he 22 r ee Oa Pe, ee 37
Production-Policies: 5 iF Pa oer ee er een ee ee 37
TraderPRolicioSamoriait). 6c)... 2 be wise Siatnle ae @ ge) cee ee ae 38
TAXOS. ty, ecu he al de seeds eal ef oe eye e Wc eee 38
Research): cca. }.Sb teers 3 evens ee eel otacae ova allan lee 38
Consumption: Policies: ... 00. se ce eee. ee at cee 38
Estimation of Policy Intervention in Agriculture .......................008.% 39
Commodity Coverage on eee ie ee se ee oe ek een, ee 39
PSE Policy Coverage 2.2... 004 bie ee a ale ee eee 40
SS aN TES CEN Ue Te Ree ees ee at ee 40
mG OUITS OVE OIICY gua nge AecatAlen We CUT ee Ban SS eee ne Oh ater ba week 40
RteC RO VAC OMMOCI oat Pita wnaieth MEME ADs Ave cise coc de sc ss wepdeg de 42
OTELD I L ETAY o 22E RRR aa I ee ea ara oee na aN 44
RGN COS Mar real Fonte ESv rs neh andeante, 66 (4 « s+ aitbepamrch weitere 46
BROOM VAD OMX: satn ia plete! oe ee ce SY Goa cc sos u.2hosem + onbentlo® ares 47
SPEER PEA Seo te, ee LP. ate OE aad alin 47
Be BN OCC CMM Bee See eee eng Un osce cera s-a'+ ,c uthbert De AeeeineS dialir: 47
PoX CHRRICIOMIAEC s Mea Rb 8 oes fi cad chS ate! cule avn. go, WS he RW) Aaa Maes 47
Rees OA) aee se a MM ge Lc) aA ie ae Mc ne Sees qk vedds Six <5 enna 0)g h 48
Tes OS eee Ae PB Ie oe asta ogi SP Sg moh Sad Aaa 4 ode aggabtoerts Palettes 48
Reet Oe rh kas oo. Eo. hears 6c bes 3b sath ce adit aes Caos 8 56
NS ela ae a cu eee ae eee er 56
Economic and Agricultural Developments, 1982-87 ...................008. 56
eM Ossie 1980'S oe 2.55 54s RR cptrcatenparteneel) lene Peocdursts focus: -rdeeerns 57
Macroeconomiciand Trade: Policy 1.3.1... ci cues ec ee SOR Re re oot 57
moucultural Policy DevelopMentS weccacun mien atl waedin@- ohent -bre- “ler aacsnes 58
BC ORS OOIS Gertie tie oor ol Mas ao ls erent aoa wal? farts A cali: 58
BORGC h ONCICG MA mica wich io fics ase) aces enh es Ass a ape pein ae 59
GovermineutalsxDenCitulGS : a.) dic vn oo ce es cciecels aon ogentaSh pendimeioront): 59
mOrOmuleXCnangePOlCICS 2.36. isla ee og. calc Zienece «0 son) tla: sagt) ebeoeaT - 60
Estimation of Policy Intervention in Agriculture .........0.0..0. c. ce.e .ee e 60
ennmocitvaG OVETAUO = cea ee ae ace. os 4, memset) aang 60
POMC VEC OVOLAIO Uruk as fai oasis cs ahr Nees deem a Soy bass ee ae aot See 61
BoeasiovaGOmmoOdGity and Policy so) 2.2 Gane os oo Seneekt oth )eet Te 61
OUT OTa ane ee nee a ee A en er ee. oy. 65
aU OS MN is ihGs ce derle. Wa eek ss Pibaes RRS Vays Oak ae QnA aod. 68
BeN EI CY PALO ICUs mcetek Set di eke Meh ar siecw hhS OR ant oh els) mapa Ot yee 2 70
PUPUMIELICINPELICG Bevis te rat 2 ees ne Moet de cas ef e ects Uoreerioeta MRe tal) erring ee 70
PUK SUIO SON i abe ees seas sols fad Ue wus vos ele en) een ae 70
Vistiie . = lS a rrr ee ern eee ree ee: ee 70
SLI coos RGAE es eee a ee ee oe 70
Bene bE XChange POIICIGS: 43 feces ota ses ye eee bec ee 71
Overnment EXDENCHUle . lacie agen eh <k Okle ce ask eee sepntniere 71
OS ee er ee ee re ee ee eee 81
“cooleryt e lt). pen er es ee ee Se as eee ee i 81
Economic and Agricultural Developments, 1982-87 .......... 0.0.0.5 ee eee, 81
oy ele eyip tes9 e s) i oo ee oe aetivett.. 82
Macroeconomic and Trade Policy Developments ....................08. 82
Pencuriraleolcy DevelopmentS <vc ssi s eeee e e ee QOS GOT: 83
PICO NPONCIES - oo oe es oe ae oe pte? Soht-OReANOO- 83
Hetil elle Ce ere rs cn eee Or 84
CGE ete le ee eee oreo 85
Me aR ONIGIGS area eee orate Hute eA lJ om 2G Main «ee ee Yow Sone 86
Estimation of Policy Intervention in Agriculture .........00.0. .e.e .eee . 86
Sectoral Levels of Government Intervention .....0..0.... .eee. ee.e e ee 86
PSE: and CSE Results by Commodity"? ov" 7.) ee 87
PSE‘ and CSE Results by ‘Policy *7 250 0 ee 89
Conclusion 629 5 FSP re ee ee re ee er 92
References’? fo So 8 EE eS EB ee 94
Methodology Appendix: #3 60) 2 St a ey ee 96
Price Policies A ee eet en ie ee eet ee ne enn 96
Foreign’ Exchange *Controls™-o stems crn corer ete eet ts ae eee 97
Coffee-Fertilizer Subsidy: sso ccctirce rire ae ee eee ee 97
Credit SUDSIdy? oer ere eee rene cere on na ea 97
Des Seeder aa iar iad laine uctea bi meal dei tori Mf oi) sched cance uusraln wu © 97
Export Subsidies) ee eee nee re tee ee nee eee 97
Coffee Disease’Control? Sa. eeSe)e ee eee 98
MEXICO te teste see th ri ak rt 112
INTOCUCTION § fant hc SS IR Oe ect ote nee ene een 112
Economic and Agricultural Developments, 1982-87 .................0+00-- 112
Policies inthe 1980'S: «°c neaa tec eee 2 r 113
Macroeconomic and Trade Policy Developments ...................0-- 113
Agricultural: Policy: Developments” ©.°<-s2s 7e.e"e.1 .e5.e2 114
Production* Policies rte et mre er ss te 114
Consumption Policies srr eeeee ee ,ee 114
Trade’ Policies: *....4.5 8 eee ee. Pe es 115
Estimation of Policy Intervention in Agriculture ......................4-2- 115
Commodity"Coverage: >... RE I ee eee 115
PSE*Policy Coverage #8 82 ht eS ai ee 116
PSE*Results "by Commodity’ =..57..5ve"re5. 8oe5 ee3e 5te5 tee e5e e 116
PSE ‘Results*by Policy os. .°.4.% . 7.5% Se ee ee ee 118
Price’ Wedge itrt "A. ENA aR en oe 120
Input Subsidies: °....5.-.". NSA SASS TR es ee 120
Exchange Rate:Adjustment’.".".5.5" 552.555 5.4R5N. Sake ee ee ee eee 120
CSE’ Policy Coverage *:..-.... 2B AAAS ASSES S A eee 122
GSE’ ResultS*.«. .c7.9.0. 4.5.5. cS SAAR SSSR ARE Ne SS ee ee 122
Conclusion ®. 590". eee 92.47, 225455 AAA SS ete eS ee 125
References ©. 5.*.) ct ticttinet. tan. tateta ote fatet ats tetetete tots telet e, aenrene oe 126
Methodology Appendix=.".*.5.8°.55. 5.455%. .oe4 °5"en5 5ee. 5ee e 128
Estimation: of the: PSE’s: ...4%2446565%5%55% 54 ee. .e4e54e4 128
Price’ Wedge rn fii Fr eee Oe A ee 128
Fertilizer-Subsidy °°..." 523585Vee 5sO 5eS 22 e2e 5e8e 5ee e 128
Credit*Subsidy © .<.72"5 2 SA ee ee eee en ae een ee 128
Exchange*Rate + oh SPR eee Ee RS eee 129
Estimation’of the GSE’s i... 527 oeP rs ee ee se ae 129
Price Wedge*.!.% eet Ne OR SR ee ee ee 130
CONASUPO 'P rice Subsidies® -.."..°.5.. 0... 0°. 55552458 Se eee 130
Other'Consumer Subsidies® ...5..0..55555..55555 5S.e5e 52. ee e 130
Exchange’ Rate er... AA RA SAAR eR Re 130
SMSTE LEPA UTEN Do Cee eoin, oud ona ioe Weyien heW ile agus oyO e 145
TL OCIICUON 0 0 ene ee eT tet ee Eo ce ee 145
Economic and Agricultural Developments, 1982-87 ................0.0008- 145
BONES NAMIC MO OUS Mert. Hit ee Mier ta, Mela co trees a flee Mee Sale blece ee 146
Macroeconomic and Trade Policy Developments ....................4. 146
PCMICUICULA U ONGVELIOVCIODINGINS 60 sate a ci tiv shacks cas sles scsh oe ewe Hae 147
Raoal atny| Hel TSS Ake ets ee Oe ee 147
Perec prerel eres) 4 eee cae 20S gael rtids ree ee are ae er 148
HECINIZOIRSUISICICS MemnmnnrE EEE tpt Pe se kc ge cle ek Woe kis as eee hes 148
SlOCIuSUOSIOICS mrtg ttn ct ote ee ce aos sae a ete eS hehe elicte goes 148
COnSUMGUOULROICICS saree marae omer ste yee, Ske, WP ee 148
Estimation of Policy Intervention in Agriculture ....................20000- 149
SCO MMNOCILY EGOGIV AC O Mt a eli ok eh ota e 4 acwiddiols b die woe tebe w 149
POEsRONCyECOVOladOmr cen te nn.) ce GA Sa. teeta Se. . 149
BoEmaesuiseoy Commodity and/Policy 2... 52.5 2.2 Vee ee a ee, 149
OUIGI SOE MMe mr en ee ett. wl Pe PL 152
AIPUELCIN@ES) . 8 om Gis guna A iateet colds eee ieee ew, oe ee eer 154
Met oO GVeADDEhICIXe iter emt te se osc, Gee ee Ne es 155
PLICGRVV OCG mer mmnnr erp retnr tT, terre co ites ewe tine es a ee nue elb ce 155
PxXchlancdemialte ACiUSiNenlte amie fc. eee fay, ot a ate eee 155
EO ZelsUOSIy mmnenn men npe nha ee ke Bel ad, Goel. ean. Sete mne ea teta 156
locieSUOSICY marrtCE et cn ee Et, Fe. a 156
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