Economic Opportunity Mailing List Archive

["James BISCOE" <<address removed>>]

I agree with much of this what Michael Lipton says.
If people have food security, ie the means of subsistence available with 
manageable levels of risk, all production above that equates to effective 
demand for goods and services.
One intervention which has remarkable effects is to raise the price of staples. 
The Zimbabwe government raised the producer price of maize in 1980/81 to ZW$2 a 
kilo from ZW$1,25. Result, surplus for export, farmers had money in hand to pay 
for seed, fertiliser, school fees, clothes, bicycles, radios, you name it.  It 
meant that the urban consumers had to pay more but they mostly have rural 
relatives who were willing to assist them with maize and of course the economy 
took off so that the urban consumers had money with which to pay the price for 
maize. The oft repeated mistake of setting the terms of trade against the rural 
producer and in favour of the urban consumer has yet to be fully eradicated it 
seems?
Of course if agriculture becomes profitable farmers will then be willing, and 
able, to purchase land if it is available. Once they own land, as opposed to 
having usufruct rights alone, investment in capital infrastructure flows.
Thank you
James Biscoe
3/5/04
0930hrs