Changing comparative advantage of corn production: a case for import substitution [Philippines]
1986
Perez, N.D. (International Rice Research Inst., Los Banos, Laguna (Philippines). Agricultural Economics Dept.)
This paper aimed to determine whether the economy profits or not in producing instead of importing corn, and offered a case for import substitution. In the process, it measured the changing comparative advantage of corn production from 1975 to 1985 using the domestic resource cost (DRC) approach of economic analysis. It also studied the trends and traced the sources of growth of corn supply. The results indicated that from 1975 to the present, the economic profitability of corn production was favorable and highly comparable with other crops, such as rice, cotton and soybean. On the average for every dollar equivalent of resources invested for corn production, the economy earned a net profit of $0.45 in 1975 and $0.39 in 1985. For 1985, economic profit for every ton produced was highest for yellow hybrid corn ($74.87) followed by yellow open-pollinated ($38.04) and white open-pollinated ($39.36). Sensivity analysis showed that for corn production to remain economically efficient, yield levels should not be lower than 1.94, 2.03 and 1.10 m t/ha for yellow hybrid, yellow open pollinated and white open-pollinated, nor the border price be lower than $111.44, $115.43 and $107.32/mt.
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