Government expenditures on agriculture and agricultural growth in Latin America
The main objective of this research report is to evaluate how government expenditures affected agricultural output between 1950 and 1980 in nine Latin American countries: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Mexico, Peru and Venezuela. The methodology used is based on the sources-of-economic-growht and production function techniques. The two approaches require good measurement of the output and inputs that enter into agricultural performance. The growth rate of agricultural output in Latin America in the period studied was matched only in West Asia. Agricultural out-put in Brazil, Costa Rica and Venezuela grew at annual rates of between 4.4 and 4.9 percent. Colombia and Mexico had rates of 4.0 percent. Agricultural output grew more slowly in Argentina, Bolivia, Chile and Peru at annual rates of about 2.0 percent. Per capita rates were lower. The growth of agricultural output in these countries changed often during the period under study. Contrary to expectations this growth was less variable in the countries with the higher rates of growth. To describe the trends, size and composition of government expenditures on agriculture (GEA), an agregate concept of GEA is used. It includes expenditures on research, extension, administration; marketing land reform, education, and health. This concept is also used as an indicator of one type of agricultural policy used by governments (called expenditure policy). Another is price policy; in order to verify the crowding out hypothesis, which is that public investment may reduce private investment, the behavior of some components of GEA was related to traditional and modern inputs. There was a positive correlation between research and extenstion expenditures and the use of fertilizers and between land reform expenditures and the use of irrigation. There was also a small negative correlation between education and health expenditures and the use of labor. Evidence in favor of the crowding out hypothesis in agriculture was not found, except for labor. But that can be explained in part by the migration of labor to cities. To check on the results from the sources-of-economic-growth methodology, production functions were fitted. First, a Cobb-Douglas production function was fitted to each country separately, with the public input treated as an additional input. The results show that the estimates of the parameters of all the inputs improve with the inclusion of public inputs; the effects of public inputs were, in general, positive, and the best definition of the public input is an aggregated one, computed as a weighted average of current and past GEA. Next, a multiple production function using Klein's method was estimated to verify the relevance of aggregating output from crops and livestock. This approach improved the previous estimates, giving more reasonable values for output-input elasticities
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| Format: | Texto biblioteca |
| Language: | eng |
| Published: |
Washington, D.C. (EUA) IFPRI
1985
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