The Effects of P.L. 480 Wheat Imports on Latin American Countries

摘要

Food aid has long been an important U.S. foreign policy tool and its popularity is likely to continue as worldwide poverty and the need to manage grain supplies in developed countries persist. However, because an increase in local grain supplies provided by food aid can depress local prices and/or lead to inadequate food production and dependence on food imports, the price and policy disincentives of food aid in recipient countries should be evaluated. This study analyzes the effects of U.S. Public Law (P.L.) 480 wheat imports on the agricultural development of Brazil, Colombia, and Peru from 1952 to 1975 and provides a basis for evaluating the effects of future food aid policy decisions. An econometric, multiequation commodity model is presented for measuring P.L. 480's effect on supply and demand for cereals, income generation, commercial grain imports, market clearing, the interrelationships of production and consumption and government policies affecting agricultural production, consumption, and trade.