Livestock: policy issues in trade, pricing, and marketing
1982
Girardot-Berg, I. (World Bank, Washington, D.C. (USA))
In their efforts to meet increasing consumer demand for livestock products, Asian governments face difficult policy choices: domestic production vs. imports, producer vs. consumer welfare, fiscal restraint vs. budget subsidies, and public intervention vs. market forces. The paper discusses policy tradeoffs and concludes that: (a) Regardless of comparative advantages, all governments try to increase the share of domestic production in total consumption. If the objective is to close the gap between urban and rural incomes such import substitution policies could be supported on social grounds; (b) Mostly, the interests of urban consumers prevail over those of rural producers. Often, therefore, price controls are introduced. However, if governments fail to ensure sufficient market supplies to meet the demand at controlled prices, price controls are ineffective and cause problems; (c) So as not to excessively depress producer prices, governments frequently subsidize domestic production to increase market supplies, rather than increase imports. However, such subsidies favour higher income groups and, therefore, have dubious social value; and (d) Governments at times choose to intervene directly in the market by establishing public marketing agencies, especially in the dairy sector. But experience with government marketing agencies has not been encouraging throughout the developing world. The paper recommends measures to improve the efficiency and competitiveness of marketing systems, thereby benefiting producers and consumers.
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