Does Food Aid Affect the Agricultural Sector? The Small Economy Case: Jamaica

Pemberton, Carlisle; Bezuneh, Mesfin; Patterson-Andrews, Hazel; Sormeaux, Afiya De

Does Food Aid Affect the Agricultural Sector? The Small Economy Case: Jamaica

2017

Pemberton, Carlisle | Bezuneh, Mesfin | Patterson-Andrews, Hazel | Sormeaux, Afiya De

This paper looked at a small developing country, Jamaica and tried to determine whether food aid has had an effect on its agricultural sectorin particular the supply of maize by farmers, the price of maize and the imports of maize. In order to meet this objective, a simultaneous equation system of six equations was estimated. The results found that food aid had a negative and inelastic impact on maize production in Jamaica. Food aid however did not affect the price of maize or the import demand for cereals in Jamaica, contrary to major concerns about food aid to developing countries. The study also produced some interesting results such as tourist arrivals had a positive influence on GDP per capita in Jamaica and the highly elastic response of the domestic supply of maize to temperature. Thus the steady rise in temperature in Jamaica over the period 1970 to 2006 may have had a depressing effect on maize production especially with the more rapid rise in temperature since 1996. In general therefore the inelastic supply effects as well as the lack of impact on maize prices and import demand for cereals some measure of success in limiting the negative effects of food aid on the Jamaican agricultural sector.

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