Food aid and food production: A theoretical analysis

Lahiri, S. & Raimondos-Møller, Pascalis (1996) Food aid and food production: A theoretical analysis. Trade and development, pp. 22-31.


It has been claimed that food aid leads to permanent dependency as it depresses domestic food prices and thus farmers find it profitable to take land out of food production and into more lucrative activities. This paper develops two alternative scenarios under which the hypothesis about the damaging effect of food aid may not be true. Under the first scenario, it is argued that food production in developing countries is often low due to unfavourable trade policies and if food aid is tied to the removal of bias against the agricultural sector, food aid will not have any disincentive effect on food production. The second exercise argues that the revenue raised by the recipient government by selling aid could be used for R and D in agricultural production.

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ID Code: 94018
Item Type: Journal Article
Refereed: Yes
Deposited On: 23 Mar 2016 01:50
Last Modified: 23 Mar 2016 01:50

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