Agricultural Policies in the Western Hemisphere

The Western Hemisphe~e for the most part depends heavily on agriculture.Almost three-fourths of the Hemisphere's fast-growing pop~lation is concen trated in tropical countries with a pronounct~d dependence on farm output.In Latin America approximately one-half of the population is rural, and the agri cultural sector accounts for more than one-fifth of the gross national product and one-half of total export earnings.The agricultural policies of most Hemisphere countries in recent years re flect the growing need to expand agricultural production through technology, the opening of new lands, and the varying of crops.These policies often try to cope at the same time with social and economic problems inherent in a tradi tional agrarian structure.Increased and diversified output in an updated farm structure, however, is not the only general aim of most Western Hemisphere nations.A growing trend toward urbanization and industrialization has created new problems, first in supplying urban centers when transportation and marketing facilities are lacking, and second in coordinating national goa18 of agriculture and indust~J to meet the overall economic goals of increased employment and in come.Price support programs, for example, have been almost universally intro duced.And in recent years, guaranteed minimum producer prices have been established for domestic food crops to ensure adequate supplies throughout Latin America.Prices are usually supported by Government purchase and storage programs.Both Government and semiautonomous agencies provide monopolies for marketing principal exports crops in Canada, Brazil, and Colombia and are im portant in price stabilization programs elsewhere.Government food suP?ly agencies have been established in many countries.The effectiveness of price support programs, however, is often limited by inadequate storage and marketing facilities and subsidy costs.Research, extension, and credit programs to stimulate improved technology in agriculture have received emphasis in most countries during the past two decades.Latin American agriculture receives substantial assistance from the United States, as well as from international and private organizations.This assistance has been augmented and integrated unde.r the Alliance for Progress Program, signed by the United States and 19 Latin American nations in August 1961.The Alliance program is administered within the framework of the Organi zation of American States (OAS), which is respon~ible for the coordination of political and economic affairs among the Ameri.':..;'''' countries.The OAS provides membership countries (United States and all Latin American countries except Barbados, Cuba, Guyana, and Jamaica) with financial assistance for agricultural development through the Inter-American Development Bank (IDB).In addition, the OAS assists in economic planning and in programs of agricultural research and education in Latin America.The Alliance program provides for a substantial increase in self-help and technical and financial assistance from the United States, the IDB, and the International Bank for Reconstruction and Development (IBRD).The Food and Agricultural Organization (FAO) and other United Nati,ons organizations, and private organizations such as Rockefeller, Ford, and Kellogg, have contributed to improvements in agricultural reseaLch and education in Brazil, Chile, Colombia, Mexico, and other countries.Agrarian reform in Mexico, Bolivia, and Cuba have substantially modified institutional frameworks and landholding systems in highly populated rural areas.Programs have been formulated or begun in most other Latin American countries to provide for basic land and tax reforms and land development but progress has been restricted by limited financial and technical r2sources.Ex pansion of irrigation has contributed to a high rate of agricultural development in Mexico during the past two decades and is important in plans to improve agri culture in Chile, Peru, and Venezuela.Improved transportation has opened new land for settlement and development in Central America, Bolivia, Brazil, Colombia, Ecuador, Paraguay, and Peru.Hemisphere trade policies reflect the dependence of many countries on agri cultural exports for exchange and fiscal revenues and the groWing demand for food imports o Trade programs emphasize growth and diversificiation of exports to maximize foreign exchange resources, to protect domestic industries through tariff and other restrictions, and to maintain adequate food supplies for urban consumers.Direct assistance for well-established exports, such as coffee, sugar, and grains, is provided by Government or producer monopolies, with trade subject in varying degrees to taxes or subsidies.Principal Latin American exports, par ticularly coffee, sugar, and cotton, are often subject to taxes and to the con version of foreign exchange earnings at rates below those used for less important commodities.The restrictive effects of tariffs upon agricultural imports vary widely between countries and commodities.The general levels for ,Argentina, Canada, Ecuador, Peru, and Venezuela may be considered moderate, but rates of duty for many products are high in Brazil, Chile, Colombia, Mexico, and Central America.Most commercial a~t'icultural imports are licensed.Exchange and special quan titative controls are important in Canada, the Caribbean, Central America, Mexico, and South American countries, including Colombia, Ecuador, and Venezuela.However, the effect of import restrictions are often modified through the oper ations of state trading agencies which provide the principal method of impo~t for many essential farm commodities entering Mexico, Colombia, and Chile.Most Hemisphere countries also share in multination a.greements on either tariffs or trade.Fourteen nations participate in the General Agreement for Tariffs and Trade (GATT); others have trade agreements with the United States.Many of these and other countries provide most-favored-nation treatment of duties and other trade benefits to non-GATT nations.The Central American Common Market (CACM)--establiahed by a treaty for economic integration between Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua in 1960--provides for a common market and completely free internal trade by 1970.By the end of 1966, over 90 percent of internal trade was free of duties (tobacco and wheat flour were important exceptions).Common external tariffs had also been established for most agricultural products, including: Free entry of breeding animals, feedstuff, and most seeds and planting materials; and a 10 percent ad valorem duty for other animals, with a specific duty of $7 per head for cattle, $4 for swine, and $1.50 for sheep.Other representative agricultural tariffs, in dollars per pound and ad valorem rates in percent, are: Chilled and frozen meat, excluding poultry.$Oe27 and 10; poultry meat, $0.36 and 15; butter, $0.27 and 10; lard, $0.23 and 10; beans, $.045 and 8; and milled rice, $.045 and 15; corn, $.036 and 10; fresh fruit, $0.136 and 25; cotton, $.091 and 15; and soybean oil, $.091 and 10.Duties are to be equalized for other agricultural commodities, including tobacco and certain dairy products, by April 1969, with wheat, wheat flour, and tallow subject to later action.

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