IMPLICATIONS OF CHANGING AID PROGRAMS TO U.S. AGRICULTURE

It is sometimes alleged that food aid tends to lower prices for
farm products in recipient countries and discourage increases in farm
production. Those who make this allegation overlook the fact that
the developing countries have made outstanding progress in expand-
ing food production and that food aid has been used mainly to meet
increased demands for food that otherwise would not have been met.
Shortage in demand has not been the factor standing in the way
of larger increases in food production. Lack of economic incentives,
improved technology, better seed, fertilizer, pesticides, and other
materials limits yield increases. In instances where lack of economic
incentives to expand farm production has acted as a brake on in-
creased agricultural production, deep-seated conditions related to
marketing, tenure, or credit arrangements have been mainly respon-
sible.

The United States has supplied large amounts of economic aid
and military aid in addition to food aid. In fact, other economic aid
has accounted for over half of total economic aid of the United
States to foreign countries (Table 3). The share of food aid in the
total may be about right in terms of needs for economic develop-
ment?

Table 3. Agricultural. Commodity Aid in Relation to
Total Net U. S. Economic Assistance, 1956-63

'Includes assistance to international agencies.

²ExcIudes Title I and MSA local currencies used for U. S. uses and military
grants.

³Excludes Title IH barter sales.

•Fiscal year.

Source: U. S. Department of Commerce, Foreign Grants and Credits by the
U. S. Government.

²For additional information on economic aid programs of the United States and
other countries, see Frank Barlow and Susan Libbin, The Role of Agricultural
Commodity Assistance in International Aid Programs, U. S. Department of Agricul-
ture. ERS-For. 118. March 1965.

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