land improvement projects. Some studies suggest that only about 20
percent of the total cost of development projects can be financed
with food.
There appear to be large potentials for using more food for
development purposes if other economic aid also is made available.
Certainly, many countries will require large amounts of food aid
to maintain and improve consumption levels as long as population
growth continues to be high. But developing countries need to plan
the use of food aid over the years ahead so that they gradually will
become self-supporting and can purchase food imports as well as
other imports on a commercial basis.
FOREIGN AID AND AGRICULTURAL TRADE
Our agricultural exports have risen greatly in the last few years
and this growth in exports has been dependent upon income growth
abroad. The total value of agricultural exports increased from a
little under 4 billion dollars a year in 1958 and 1959 to over 6
billion dollars in 1963 and in 1964. Nearly all of this increase has
been in commercial sales for dollars. Dollar sales to the developed
countries account for most of the increase, but there also have been
significant increases in commercial sales to several of the less de-
veloped countries.
Dr. A. B. Mackie of the Economic Research Service recently
completed a study of foreign economic growth and market potentials
for U. S. agricultural products.3 His study shows that we export
about $1.00 worth of farm products per $100 of income to the
less developed as well as the developed countries. In the developed
countries where incomes averaged $700 per capita in 1959-61, we
had farm exports of $6.09 per capita. In the less developed countries
where incomes averaged $ 111, we had farm exports of $ 1.19 per
capita. Moreover, analysis of changes since 1938 indicates that U. S.
agricultural exports to both developed and less developed countries
have increased about 1 percent for each 1 percent increase in in-
come. Because of the large numbers of people in the less developed
countries and population growth expected in the future, they are
large potential markets for U. S. farm products.
A large share of the growth in agricultural exports to the less
developed countries during the last decade has been sales for foreign
currencies and other shipments under other food aid programs. But
■A. B. Mackie, Foreign Economic Growth and Market Potentials for U. S. /Igri-
cultural Products, U. S. Department of Agriculture, For. Agr. Econ. Rpt. No. 24,
April 1965.
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