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Does Food Aid Really Discourage Food Production?

Indian Journal of Agricultural Economics, Vol. 54, No. 2

Posted: 16 Aug 2006  

Sandeep Mohapatra

University of Alberta - Faculty of Agriculture, Forestry & Home Economics - Department of Rural Economy

Christopher B. Barrett

Cornell University - Charles H. Dyson School of Applied Economics & Management

Donald L. Snyder

Utah State University

Basudeb Biswas

Utah State University - College of Business - Department of Economics

Abstract

We address the long standing concern that food-aid works as a disincentive for recipient country agricultural production, by increasing recipient food supply and driving down food prices. This analytical conclusion, while widely accepted in the literature, relies on implausible Arrow-Debreu Models, even though the structural deficiencies of recipient country markets are a central reason for receiving food aid. We use a theoretical framework that explores the implication of non-separable decisions caused by the widespread non-participation in labor, land, financial and food markets. Our analyses show that selective market failures that permeate low-income, high transaction-cost recipient economies render analytically ambiguous signs on key relationships between food-aid shipments and recipient agricultural production responses.

Suggested Citation

Mohapatra, Sandeep and Barrett, Christopher B. and Snyder, Donald L. and Biswas, Basudeb, Does Food Aid Really Discourage Food Production?. Indian Journal of Agricultural Economics, Vol. 54, No. 2. Available at SSRN: https://ssrn.com/abstract=924503

Sandeep Mohapatra (Contact Author)

University of Alberta - Faculty of Agriculture, Forestry & Home Economics - Department of Rural Economy ( email )

Edmonton, Alberta
Canada

Christopher B. Barrett

Cornell University - Charles H. Dyson School of Applied Economics & Management ( email )

315 Warren Hall
Ithaca, NY 14853-7801
United States
607-255-4489 (Phone)
607-255-9984 (Fax)

HOME PAGE: http://aem.cornell.edu/faculty_sites/cbb2/

Donald L. Snyder

Utah State University ( email )

Logan, UT 84322-3530
United States
435-797-2383 (Phone)

Basudeb Biswas

Utah State University - College of Business - Department of Economics ( email )

3530 Old Main Hill
Logan, UT 84322-3530
United States

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