Indian Journal of Agricultural Economics, Vol. 54, No. 2
Posted: 16 Aug 2006
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: 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