North America and the World Grain Market

The increase in world grain production in the past half-century was unparalleled in the history of the world. In that same period, the absolute increase in the world's population exceeded that of all previous history--it more than doubled. The supply of grain more than kept up with the rapid growth of demand--the per capita supply of calories in developing countries increased by 27 percent between the early 1960s and the early 1990s while the real price of grain in international markets declined by at least a third. The expansion of grain production since 1960 has been largely achieved through higher yields--the substitution of other inputs for land. Consequently the roles of land and the diminishing returns to land have been significantly attenuated by the results of research and the availability of nonfarm sources of inputs, such as chemical fertilizer. In developing countries, improving the productivity of labor may be more critical in determining the welfare of rural people than any limitation imposed by land. Over the next quarter century, improving the productivity of the world's land by 75 percent will probably meet the increase in demand for grain, but farm labor productivity will need to treble if there is to be rapid economic growth in developing countries. The large differences in the rate of growth of grain production over the past several decades among developing countries have not been due primarily to differences in natural resources, but have resulted from differences in the structure of policies affecting agriculture and grain production. Where governmental policies have been supportive, grain production has not only kept up with demand growth but has exceeded it; where governmental policies have exploited agriculture through low prices for farm products and limited commitment to research, per capita grain production has grown slowly, if at all. Policies count--and count a great deal. The evidence supports the conclusion that national policies, inc(This abstract was borrowed from another version of this item.)