Abstract: Control over prices of farm products and inputs belong to a system of intervention that regulates agricultural production and the distribution of benefits. They are consistent with the theory and mechanisms for managing a centrally planned economy pursuing a course of accelerated industrialization. The commodities' prices boom on world markets in the early seventies highlighted certain weaknesses in the program leading to calls for change. Using world prices as reference, the evidence indicates that price intervention and the associated physical controls have not only affected prices adversely but also incomes, cropping patterns, growth in total production, input use, the pattern and level of investment in the sector and the performance of institutions. On the benefit side, the program assisted needed reforms in production conditions. For the first time inputs became available to all. Costs were kept low and stable with markets guaranteed. It provided a means to raise state revenue, protect industry and ensure cheap food. On the cost side, inflexible management ensured problems would arise as foreign and domestic market conditions changed.
Publication Year: 1981
Publication Date: 1981-01-01
Language: en
Type: article
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Cited By Count: 7
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