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Trends and recent changes in the Latin American food and agriculture situation

16 Apr 1982-Cepal Review (United Nations Publications)-Vol. 1982, Iss: 16, pp 7-41

Abstract: Analiza los elementos comunes de las diversas situaciones que presentan actualmente las agriculturas nacionales, que permiten configurar una vision de conjunto de la region e ilustra sobre el rumbo e intensidad de las transformaciones economicas y sociales que viene experimentando el agro latinoamericano. En el analisis se consideran algunos aspectos relevantes del nuevo marco agricola mundial que influyeron en grado diverso en el comportamiento de las agriculturas nacionales.

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CEPAL
Review
Director
RAUL PREBISCH
Technical Editor
ADOLFO GURRIERI
Deputy Secretary
GREGORIO WEINBERG
UNITED NATIONS
ECONOMIC COMMISSION FOR LATIN AMERICA
SANTIAGO DE CHILE /APRIL 1982

CEPAL
Review
Number 16 Santiago, Chile April 1982
CONTENTS
Trends and recent changes in the Latin American
food and agriculture situation. Luis López Cordovez. 7
Latin American agriculture. Its prospects up to the end of the century.
Nurul Islam. 43
Capitalism and population in Latin American agriculture.
Recent trends and problems. Carmen A. Miró and Daniel Rodriguez. 51
Peasant agriculture in Latin America. Situations and trends.
Emiliano Ortega. 75
The principal schools of thought on the peasant economy.
Klaus Hey nig. 113
The peasantry in Latin America. A theoretical approach.
Raúl Brignol and Jaime Crispi. 141
Class and culture in the changing peasantry.
John W. Durston. 153
On being grandmotherly: the evolution of IMF conditionality.
Sidney Dell. Ill
Notes and comments:
Statement by Mr. Kenneth Dadzie at the opening ceremony of the
nineteenth session of CEPAL. 189
Some CEPAL publications. 193
Index of the first fifteen issues of CEPAL Review. 199

CEPAL REVIEW
April 1982
Trends and recent
changes in the
Latin American
food and agriculture
situation
Luis López Cordovez*
This paper analyses the chief trends and recent
changes in the agriculture and food situation of
the Latin American countries and seeks to give
a brief overall picture, despite limitations aris-
ing from the insufficient and sometimes partial
data.
In making the analysis, account was taken
of a number of outstanding aspects of the new
world agricultural context that have had an
impact to varying extents on the performance
of national agriculture.
The regional agricultural situation reflects
a variety of different types of progress resulting
from the sometimes only partial exploitation of
its potential and a number of unsolved prob-
lems which may be becoming more serious. In
any event, the economic progress achieved is
obvious, since the dimensions of the sector
increased by a factor of 1.4 during the 1970s.
The technical progress that has taken place in
the region is evident but at the same time pres-
ents an uneven picture. These two forms of
progress have been based both on stimuli re-
sulting from public policy and on attractive,
although selective, conditions in expanding
markets. To a great extent the expansion
achieved in production was made possible by
accelerated capital formation in entrepre-
neurial-type production
units.
The coexistence
of this material progress with the continuing
rural poverty is the most noteworthy negative
feature of Latin American agriculture.
*Director, CEPAL/FAO Joint Agriculture Division.
I
Agriculture in the
overall context*
The diversity of the current situations in na-
tional agriculture presents an obstacle to as-
sessment of a regional scope. Nevertheless, de-
spite the difficulties arising from growing dis-
parities that lead to major differences in the
significance of agricultural activities within the
framework of the global economy, in ag-
ricultural production policy, in the relationship
between agricultural activities and internal
and external markets, in the size, characteris-
tics,
dynamism and economic performance of
the various agricultural segments, and in the
interrelationships among those segments and
between them and the rest of the economic
system, there are enough common elements to
put together an overall picture of the region
showing the orientation and scope of the
economic and social changes that Latin Ameri-
can agriculture is undergoing.
Owing to its size and resources, in past
decades agriculture was an outstandingly im-
portant sector in most national economies,
whereas industry was in a relatively early stage
of development. For that reason, and because
capital resources were scarce at that time (ex-
cept in those countries with high levels of min-
eral and petroleum exports), while there was
only a low volume of external financial assis-
tance, agriculture had to contribute to the
growth of other economic activities. In addition
to this situation, there was the widespread con-
viction that agriculture could be expanded by
making more effective use of the resources al-
ready applied to the sector, since agriculture's
own capital requirements were quite modest.
While there is no doubt that industry has
been the most dynamic sector as regards de-
velopment of the Latin American economic
system, agriculture has played an important
role by making a major contribution to the in-
dustrial sector. It continues to play the same
role,
but in spite of the fact that its economic
dimensions are a good deal larger than in
earlier decades it no longer occupies the promi-
*The author wishes to express his gratitude for the
valuable observations and suggestions made by Messrs.
Emiliano Ortega and Rolando Chateauneuf.

8
CEPAL REVIEW
No.
16
/
April 1982
nent place
it
once
did as a
sector whose
economic surplus could
be
transferred
to the
rest of the economic system.
At
the
beginning
of the
1980s
the
position
is that agriculture
is
still extremely important
in
a
number
of
countries, whereas
in
others
it
occupies
a
more modest position. Between
1970
and 1980, at the
regional level
and on the
basis
of
national accounts, there
was an
annual
increase
of 3.5% in the
agricultural gross
do-
mestic product, compare with
an
annual
growth
of 5.6% in the
overall gross domestic
product. Over
the
same period agriculture's
share
in the
total product dropped from 14%
to
11.4%.
In the
course of the 1970s
the
proportion
of
the
total labour force employed
in ag-
riculture dropped from 42.1%
to
36.2%.
l
Natu-
rally,
the
agricultural product's growth rates,
the
share
of
that product
in the
total product,
and
the size
of the
agricultural population
in
rela-
tion
to
that of the total population vary from
one
country
to
another.
When an. economy undergoes change
and
becomes more diversified
the
importance of
ag-
riculture
in
relation
to the
total gradually
de-
creases, which generally leads
to
misjudge-
ment
of the
agricultural sector's performance
and
to a
negative assessment
of it. In the
economic development process
it is
normal
that there should
be a
drop
in
agriculture's con-
tribution, measured
on the
basis
of
global
macro-economic indicators that
may be
disag-
gregated
at the
sectoral level.
In itself,
such
a
decrease does
not
mean that inadequate
dynamism
is
being displayed.
The
nature
and
magnitude
of the
evolution
of
agriculture
should
be
considered
not
only
in the
light
of
statistical indicators
on
production
and
pro-
ductivity,
but
also
in the
light
of
indicators
re-
flecting socio-economic changes resulting from
changes
in
distribution
of
income,
the
scale
of
extreme poverty
and the
level
of
employment
of
the
labour force.
In
the
1970s
it was
observed that
in
most
countries,
for
some time past
and to
varying
degrees,
the
socio-economic structures
of ag-
riculture
and the
interrelationships between
them
had
been undergoing substantive
iCEPAL, "Projections
of
Latin American develop-
ment
in the
1980s", April 1981{E/CEPAL/G.U58).
changes. Analyses were carried
out and it was
shown that
the
technological modernization
of
agriculture
was not an
isolated event,
but
that
it
constituted part
of a
series
of
events, which
made evident
its
integrated
and
interdepen-
dent character
in
respect of the development
of
the other economic sectors. This series of inter-
relationships
and
repercussions
is
extended
by,
and
linked with,
the
national economies'
system of external relations.
2
The integration
of
agriculture into global
development
and its
interdependence with
such development
is
therefore
a
determining
factor
in the
changes that
are
being noted
in it;
for
a
complete understanding
of
what
has
hap-
pened
in
agriculture, both from
the
point
of
view
of
production
and
from
the
point
of
view
of the social stratification of this sector, particu-
lar attention should
be
given
to
intersectoral
relations, which help
to
explain events
in the
light of more comprehensive
and
complex situ-
ations
and
processes than those linked only
to
variables
in the
agricultural sector
itself.
Within this framework
of
integration
and
interdependence,
it has
become increasingly
difficult
to
make
the
goals pursued
by the
State
through
its
priority programmes
and
actions
—goals which
are
general
in the
case
of ag-
riculture
as a
whole
and
specific
in the
case
of
each individual branch of production,
or for the
benefit of the peasantry
at
large fully compat-
ible
and
coherent among themselves
and be-
tween them
and the
goals
set for the
economic
system
as a
whole.
The
difficulties, incon-
sistencies
and
contradictions involved have
been even greater when countries have
had to
make choices, review goals
and
objectives,
and
apply internal adjustment policies
in
order
to
cope with
the
short-term external situation.
The average income
of the
population
de-
pending
on
agriculture continues
to be a
good
deal lower than that
of the
non-agricultural
population. Despite
the
progress achieved
in
production, which
is
described below, trends
in agriculture still
do not
meet
the
economic
and social demands made
on
that activity
by the
Latin American economy
and
society.
2
CEPAL
and
FAO, "Rural social development in Latin
America", CEPAL/FAO Technical Meeting on rural social
development
in
Latin America, Montevideo, Uruguay,
9-
11 August 1978 (CEPAL/FAO/78/2).

LATIN AMERICAN FOOD AND AGRICULTURE SITUATION / Luis López Cordovez
9
II
Regional agricultural production in the 1970s
The marked changes and uncertainties which
have prevailed on a worldwide scale in the
economic, social and political spheres in the
past decade, and especially in the second half
of that decade, have had a strong impact on the
international agricultural markets for products,
technical inputs and finance, and through those
markets they have influenced the agricultural
production process of the developed and de-
veloping countries in various manners and to
varying degrees.
Latin America did not escape this impact.
When the proportion of a product exported ex-
ceeds one-third of the regional total produced,
external market conditions obviously have a
great impact on the production process; a brief
outline of world agriculture will therefore be
given, before developments in regional ag-
ricultural production are considered.
1.
Some leading aspects of the new world
agricultural context
In general, the period between the beginning
of the 1950s and the early 1970s was one of
definite and stable growth in world agricultural
production, particularly of food, together with
unprecedented growth in food consumption.
In 1970/1971 the chief problem confronting
world agriculture was how to reconcile the
need to increase income from exports of ag-
ricultural products with the need to raise the
income of agricultural producers in both the
developed and the developing countries and,
at the same time, maintain a greater degree of
stability and firmness in international markets
and thus a better equilibrium between supply
and demand at the world level.
It may be concluded from FAO figures
3
that the value of world agricultural production
grew at an annual rate of 2.9% between 1950
;i
FAO,
Production and Trade Yearbook, Home, various
years.
and 1972, whereas the value of international
trade in agricultural commodities would ap-
pear to have grown at an annual rate of 5%. A
characteristic of the period in question was the
increase in the developing regions' depend-
ence on food imports. In 1972, owing to
simultaneous major production deficits in a
number of interrelated commodities, there was
a substantial increase in international demand,
and it was therefore necessary to draw heavily
on reserves in order to close a major portion of
the gap between supply and demand. When
the reserves were bordering on their lowest
levels,
in 1973, there was a marked increase in
prices. The sharp rise in oil prices and the re-
sulting financial and monetary disturbances
had an impact on balances of payments, ac-
celerated inflation and encouraged specula-
tion, introducing additional uncertainties into
the situation that generated conflicts between
supply and demand in international ag-
ricultural markets.
The rise in the price of fertilizers,
pesticides, fuels and lubricants gave rise to ad-
justments in production systems, particularly
as regards the location and composition of
crops and the selection of energy-saving tech-
nical processes.
In 1975/1976 the industrialized countries'
economic recovery began, international ag-
ricultural prices dropped and stocks ac-
cumulated in the importing countries.
4
In 1977
there was an increase in world agricultural pro-
duction and supply, which coincided with a
recovery in demand as a result of an increase in
consumer income, and there was even a recov-
ery in stocks to a certain extent. When demand
recovered in 1978 prices rose slightly, which
coincided with a considerable increase in the
prices of exports of manufactures, resulting in a
deterioration in the terms of trade. Following
4FAO,
Commodity Review Outlook, 1975-1976, Koine,
1976.

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