Date of this Version
Paper presented at CENTA conference: “Cambio Climático e Impacto de los Sorgos Forrajeros” December 7, 2011, San Salvador, El Salvador.
The driver of agricultural development is the introduction of new technology. Sensitive sorghums have long been a critical component of hillside Central American agriculture providing a reserve or insurance policy when the principal staple of maize falters. The insensitive sorghums have been more recently introduced since the ‘70s for planting in the valleys in the second season. In the last thirty years the introduction of new insensitive cultivars has accelerated initially for poultry and in the previous two decades for dairy production. This growth has been facilitated by strategic investments in research by CENTA and the Ministry of Agriculture.
As incomes grow the demand for high quality foods, meat, milk, cheese, fruits and vegetables, accelerates. Milk and products from milk are principal beneficiaries of these demand shifts. To facilitate these consumption shifts agricultural research led by Rene Clará of CENTA focused on the development of a series of new cultivars. Since agricultural research and extension is expensive, we ask the returns on these public investments and who were the beneficiaries. Responding to these two questions is the objective of this paper. We will also make some recommendations for future research and policy.
The returns to producers are higher than those for consumers but the returns for consumers are greater than those for large producers. So from both an economic efficiency perspective and for the income distributional results of benefitting consumers more than large producers these public sector expenditures were very beneficial to El Salvador.
In the effort to design technology for small producers the public sector often forgets that the principal beneficiaries of agricultural technologies for domestic consumption are consumers. Hence for rapid growth sectors with changes in consumers habits such as the demands for milk, milk products, broilers, fruits and vegetables, there probably needs to be a focus on large (and medium) producers, who can rapidly adapt and expand production with new technologies so that relative prices do not increase as fast.
We understate benefits here by not including the value of the grains for the dual purpose case when the grain is sold and the rest used for forage. This would be especially the case for earlier years in the ‘90s and for the small farmers. Note that including these grain sales would 23 shift our results in Figure 6 giving larger benefits to small farmers. Also this same technology is expected to continue generating benefits for another decade and the projected future benefits could also have been included in this analysis.