2.1 INTRODUCTION
2.2 LAND USE AND PRODUCTION
2.3 INTERNATIONAL TRADE
2.4 POPULATION
2.5 POVERTY
2.6 NUTRITION AND FOOD SECURITY
The agricultural sector in the region shows dramatic changes in the last three decades, as reflected in a diminishing contribution to the Gross Domestic Product (GDP) and a decreasing population engaged in agriculture. This has resulted from a continuous migration from rural to urban areas, with dramatic increases of the metropolitan cities in almost all countries in the region. At the same time, agriculture exhibits a rate of growth of 2,9% through 1990-1995, that can be qualified as acceptable on average. This average however, hides a highly varied situation inter and intra countries, as shown in Figure 1.
Figure 1 LATIN AMERICA AND THE CARIBBEAN: AVERAGE ANNUAL GROWTH RATES OF AGRICULTURAL GDP, 1970-1995
Source: Agricultural Development Unit, ECLAC
Historically, agricultural development has been decisive for economic development in a significant number of countries in the region. As a result of an unbalanced and asymmetric development style, the region shows a remarkable pattern of heterogeneity, and the agricultural sector probably is the most heterogeneous of all, having been a permanent source of poverty and migration to urban areas. Nevertheless, within the sector it is possible to find very modem activities using the most advanced technologies, oriented to very sophisticated markets and exhibiting a high dynamism, beside traditional production organization forms, including the peasant and indigenous production units, highly significant in many countries.
As part of this mentioned heterogeneity, the participation of the sector in the GDP, varies from slightly over 5% in Mexico, to 40% in Haiti. Certainly, the tendency is to decrease, but the situation is very different among the countries. In spite of this, the fact is that agricultural activities are still crucial in most countries of the region, if measured not only by participation, but also by employment generation and contribution to total exports. The following figure shows this situation for 1994.
Figure 1 LATIN AMERICA AND THE CARIBBEAN: AGRICULTURAL GDP AS % OF TOTAL GDP
As can be observed, four countries, Mexico, Chile, Jamaica and Panama, exhibit the lowest contribution of the sector to GDP, below 12%. A second group (Brazil, Uruguay, Peru, Ecuador and Dominican Republic), is composed by countries in which the agricultural sector has an intermediate contribution, between 13 and 17%; the next group with a contribution of 17 to 23%, composed of Colombia, Costa Rica, Honduras and Bolivia. Finally, countries in which agriculture is the largest and the most important activity with a contribution between 23 and 40% include Guatemala, Nicaragua, El Salvador, Paraguay and Haiti, most of them in Central America.
The outlook of the agricultural sector in the region has been determined in the five last years, mainly by the macroeconomic environment. The application of measures in order to deregulate the agricultural and rural economy, have created different effects over the sector. The adjustment in the exchange rate, has favored the prices of tradable goods, and influenced the production structure. As this policy has been followed usually by public policies to promote the non-traditional exports, it is possible to observe an increase in the agricultural export flows as a whole, and a fast increase in the rate of growth of the non-traditional goods, mainly horticultural products.
The reduction of the public support to the agricultural sector, has been reflected in higher credit costs, and in the reduction or elimination of subsidies and taxes to agricultural activities. At the same time, the overall demand-compressing effects of the fiscal and monetary restraints, also play an important role. As it is well known, the rural sector concentrates most part of the poor, the poorest of the poor. With the reforms, some people think that inequity has increased in rural areas. According with ECLAC, since the intensification of the process of market liberalization, around the 1990's, the sector shows a disappointing performance. The rate of growth of the agricultural production is clearly insufficient to allow the sector to contribute adequately to food security and to the general economic growth of the region. The 1990's witnessed a significant improvement in the average yields, reaching a rate of 3.3% of annual increase, compared with 1.3% in the 1980's, but during this period the cultivated area declined at a rate of 2.2% annually. This mediocre performance reflects different kinds of factors not necessarily related with the structural reforms, but the overvalued exchange rate, the reduction of public support, higher credit costs and the overall demand compressing effects of fiscal and monetary restrain, have undoubtedly played an important role.
Over the long run, the main changes in terms of land use are shown in Table 2, for the period between 1965 and 1994. While "arable land" increased more than 200 million hectares (from 919 millions to 1.200 million), the forest area diminished in around 100 millions hectares. The most important change in relative terms is for irrigated lands that more than doubled.
Table 2
LATIN AMERICA AND THE CARIBBEAN: LAND USE
(000 hectares)
|
|
1965 |
1970 |
1975 |
1980 |
1985 |
1990 |
1991 |
1992 |
1993 |
1994 |
|
Arable land |
91879 |
98944 |
107537 |
117522 |
122288 |
125303 |
124507 |
124432 |
122428 |
124088 |
|
Permanent culture |
16710 |
17791 |
18834 |
21148 |
20685 |
18944 |
18634 |
19237 |
18785 |
19430 |
|
Permanent grasslands |
520028 |
539374 |
553892 |
565077 |
576838 |
588281 |
589988 |
591740 |
590051 |
590148 |
|
Forestry lands |
1026224 |
1006691 |
985542 |
965683 |
945655 |
927290 |
923197 |
918839 |
921583 |
921583 |
|
Irrigated area |
8847 |
9999 |
11864 |
13618 |
14862 |
16448 |
16773 |
17297 |
17392 |
17672 |
A wide range of agro-ecological systems, with very different conditions that vary from the tropical humid forests to Mediterranean and to the most extreme dessert conditions, offers a wide range of possibilities and limitations. This additional condition contributes powerfully to the heterogeneous panorama in the region.
Food production has increased significantly in the region. The index for food production shows that in the long run term, food production, in global terms, has almost doubled in 30 years, during the period between 1965 and 1995. However, in per capita terms, the increase is less significant, reaching a maximum in 1992, and then dropping in the following years, as can be observed in Table 3. For the same period, agricultural production shows an increasing trend but stagnation in per capita terms since 1980.
Table 3
LATIN AMERICA AND THE CARIBBEAN; FOOD PRODUCTION EVOLUTION
(000 tons)
|
|
Index/year |
1965 |
1970 |
1975 |
1980 |
1985 |
1990 |
1991 |
1992 |
1993 |
1994 |
1995 |
|
Food Production |
1989-91=100 |
52.5 |
60.0 |
67.8 |
80.5 |
92.6 |
99.6 |
101.9 |
103.9 |
105.1 |
109.0 |
111.2 |
|
Per capita |
1989-91=100 |
93.1 |
93.0 |
92.3 |
95.7 |
96.1 |
101.1 |
99.5 |
103.5 |
98.9 |
99.7 |
97.7 |
|
Agriculture Production |
1989-91=100 |
48.9 |
58.4 |
66.1 |
79.5 |
91.6 |
99.5 |
101.9 |
104,5 |
106.3 |
110.8 |
112.9 |
|
Per capita |
1989-91=100 |
94 |
96.3 |
94.6 |
99.0 |
99.1 |
100.9 |
99.7 |
101.9 |
99.1 |
100.0 |
99.9 |
Table 4 shows the production evolution of basic food commodities for selected years in the period 1965-1995. As can be observed, the production of cereals has doubled in the last 20 years; roots and tubers have grown very little, while fruit and horticultural production has increased 2.4 times in the same period.
Table 4 LATIN AMERICA AND THE CARIBBEAN: BASIC FOOD PRODUCTION (000 tons)
Figure 2 illustrates the production evolution of the main cereals in the region during the last 20 years. Maize is on aggregate, the most important cereal in the region, although there are important differences in the relative importance of each cereal according to the region and country.
Table 5 shows the average level of production in the region for the main staples, contrasting the values obtained at the beginning of the 1980's and current values. The implicit average rates of growth of production, yields and area are shown subsequently. The highest rates of growth in production have taken place in wheat, maize and rice, due to significant yield increases in the case of wheat and rice, and, to a lesser degree, also in the case of maize and potatoes. Cassava production has grown very little, due to a significant reduction in the area sown, as with sweet potato, in which case total production is even lower in absolute terms than 15 years ago. There has been an improvement in the production of milk per head of stock, and an expansion of the cattle stock, particularly for milk production.
Table 5
LATIN AMERICA: PRODUCTION OF BASIC COMMODITIES AND RATES OF GROWTH OF YIELDS AND AREA, 1979-1981 AND 1994-1996
(Thousands of metric tons and percentages)
|
Products |
Production |
Annual Average Growth Rates |
|||
|
1979-1981 |
1994-1996 |
Production |
Yields |
Area |
|
|
|
(Thousand tons) |
(Percentages) |
|||
|
Wheat |
15151 |
22415 |
2.65 |
3.04 |
-0.40 |
|
Rice |
15042 |
20151 |
1.97 |
3.15 |
-1.14 |
|
Maize |
47350 |
69473 |
2.59 |
1.84 |
0.78 |
|
Beans |
4884 |
5600 |
0.92 |
0.80 |
1.14 |
|
Potatoes |
11489 |
13709 |
1.18 |
1.73 |
-0.54 |
|
Cassava |
30948 |
31408 |
0.10 |
0.47 |
-0.37 |
|
Sweet Potatoes |
2155 |
1850 |
-1.01 |
0.73 |
-1.72 |
|
|
|
|
|
per head |
stock |
|
Beef |
8972 |
11386 |
1.60 |
0.38 |
1.22 |
|
Milk |
34765 |
51274 |
2.62 |
1.07 |
1.53 |
Source: Agricultural Development Unit, ECLAC, based on FAO.
Fisheries and Aquaculture
Latin American countries are major exporting countries of fish and fisheries products and account for 11% of world exports, with Chile as the main net exporter. Shrimp and fishmeal are the main export with Chile and Peru dominating the world fish meal market with exports going to Asia, and Mexico and Ecuador are the main exporters of shrimps. Most of shrimps production goes to United States, but recently Ecuadorian shrimps exporter are trying to penetrate the European markets.
In 1994 Latin America and Caribbean fish production reached record levels of 24 million tonnes representing 22% of the world total. About 85% of total derived from the South East Pacific. Small pelagic marine fish make up about 75% of total catch where Peruvian Anchoveta is still dominant. Catches from Anchoveta collapsed in the 1970s dropping from 13.1 million in 1970 to 1.7 million tonnes in 1973 and down to only 94,000 tonnes in 1984. Since the stock has recovered and landings reached 11.9 million tonnes in 1994. Climate change through "El Niño" was a primary cause of recruitment failure and stock decline.
Other small pelagic stock such as the South American Pilchard, the Chilean horse mackarel and mackarel started to increase when the peruvian anchoveta fisheries collapsed. The first two species are now major components of production in the area, although the pilchard is considered fully exploited and even over exploited in part. In the South west Atlantic, production has been increasing recently. Dominant species are squid and hake, followed by basses, conger and other demersals. Squid, shrimps, lobster and crabs as well as small pelagic species such as sardinella and Argentina anchoveta, are also fished. Until the 1980s, this was one of the few fishing areas of the world to have a large expansion potential, but since then, several industrialized long run fisheries have developed and most of the fish stocks are now considered to be fully exploited, while some have been over exploited over the last few years.
Related with aquaculture, in 1994 production reached 472,000 tonnes, representing about 2 and 5% of world production by volume and value respectively. Aquaculture makes a similar contribution to total regional fisheries production, with six countries accounting for most of the production. Shrimp culture has increased very rapidly and represent over 80% the total value of regional production in 1994. Salmon culture has also developed, although almost exclusively in Chile.
The contribution of the sector to the economy is highly concentrated in coastal rural areas where is the key and often only source of employment and income. Internally it plays a minor role and food fish consumption is about 9 Kg. Annually (live weight equivalent). The abundance of small pelagic fish provides the basis for an important fish reduction industry in Latin America, where more than two-thirds of the total catch are oriented to non food products. The main item is fish meal and fish oil used in as feed in the animal husbandry, poultry and aquaculture industries.
Latin America is a traditionally net exporting region for agricultural products. As can be appreciated in Table 6, the increase in export volumes for agricultural products from Latin American countries in the 1990's has been larger than in value terms. In fact, the trade index reveals a larger increase in volume of exports than in value of exports. At the same time, agricultural imports have grown more than exports, both in value and volume.
Table 6
LATIN AMERICA AND THE CARIBBEAN: FOREIGN TRADE INDEXES
|
Item |
Element |
Unit |
1990 |
1991 |
1992 |
1993 |
1994 |
|
Agric Trade |
Imports |
1000$ |
14716 |
15661 |
18151 |
19245 |
23005 |
|
Agric Trade |
Exports |
1000$ |
35369 |
32709 |
33104 |
32934 |
39895 |
|
Total |
Imports |
1000$ |
120367 |
134986 |
158054 |
168273 |
198363 |
|
Total |
Exports |
1000$ |
134092 |
129179 |
134314 |
138076 |
158603 |
|
Agric. Trade |
Import value |
1979-81=100 |
106.9 |
116 |
133.1 |
139.3 |
167.8 |
|
Agric. Trade |
Import volume |
1979-81=100 |
107.9 |
120.9 |
136 |
140.2 |
165.1 |
|
Agric. Trade |
Export value |
1979-81=100 |
114 |
104.3 |
104.4 |
102.6 |
124.2 |
|
Agric. Trade |
Export volume |
1979-81=100 |
129.3 |
128.6 |
135.7 |
132.8 |
139.5 |
According with World Bank projections, the developing countries have an excellent opportunity to increase significantly its participation in international trade. The rate of growth for international trade is estimated in 6% in long term basis. This fact could represent the best opportunity in many decades for the developing countries. As it is widely known, the participation of agricultural trade in the total is less important than it was in the past; between 1984 and 1994 the participation of LAC in well trade lost participation, from 14.5 to 11.9%, mainly as a result of a price effect on agricultural raw materials.
Related with exports destination, some important changes have taken place; between 1980 and 1994, North America bought less from Latin America (from 37 to 29.1% of the total) meanwhile, the participation of Europe and Japan was almost the same in the period, 11.9-10.3% and 5% respectively.
The following table (Table 7) shows a matrix with the fluxes of the international agricultural trade by region for 1994. As can be seen, the main destination for North American agricultural exports is Asia and then, the same region. For Latin America, Europe is the most important destination for agricultural exports, followed by North America, the Latin American region and Asia. Latin America can exhibit a high degree of diversification if compared with other regions.
The following table contains information on total exports and imports of Latin America (not including the Caribbean) in the nine commodities in which the CGIAR is involved within the region.
Latin America: Total regional Exports of selected Commodities. 1986-1995 (million US$)
Latin America: Total regional Imports of selected Commodities. 1986-1994 (million US$)
At present, in almost all the countries, there is an increasing difference between agricultural and rural active population; the agricultural active population represents only 70% of the rural active population and an increasing number of workers from the urban areas are working in agricultural activities. In some countries as Argentina, Brazil, Chile and Venezuela, this category represents 20% or even more of agricultural workers1.
1 Martine Dirven, El Empleo Agrícola en América Latina y El Caribe: Pasado Reciente y Perspectivas, Agricultural Development Unit, ECLAC, March, 1997.
Table 8 shows the main figures for total population and active population considered by rural and agricultural categories, taking into account gender. As can be observed, the absolute and relative participation of the rural population decreased in the total, simultaneously, with a faster increase in the rural active category compared with agricultural active population. The changes observed between 1980 and 1995 illustrates the decline in absolute terms of the rural population and of the population engaged in agriculture.
Table 8
LATIN AMERICA AND THE CARIBBEAN: TOTAL, ECONOMICALLY ACTIVE, AGRICULTURAL AND RURAL POPULATION
(In thousands)
|
Element |
1970 |
1975 |
1980 |
1985 |
1990 |
1991 |
1992 |
1993 |
1994 |
1995 |
|
Total population |
283174 |
319850 |
358389 |
398358 |
439651 |
448062 |
456515 |
464987 |
473466 |
481931 |
|
Rural population |
120520 |
123700 |
125077 |
125859 |
125531 |
125390 |
125218 |
124998 |
124703 |
124292 |
|
Agric. population |
0 |
0 |
122586 |
119162 |
112894 |
111729 |
110646 |
109649 |
108705 |
107804 |
|
Economically active |
0 |
0 |
130018 |
151162 |
176151 |
180893 |
185450 |
189902 |
194386 |
199006 |
|
Agric. Economically active |
0 |
0 |
44507 |
45149 |
44876 |
44698 |
44504 |
44309 |
44135 |
43996 |
According with The World Bank, Central America and the Brazilian North-East Region are the poorest regions in Latin America, with 60% of the population below the poverty line. One-quarter of the population lives with less than one dollar per day. Between 1960 and 1990, the total population of Latin America and the Caribbean grew by 60%, but the poor people grew even more: 62% in the same period.
According with different sources, at the end of the 1980's, for the first time, the urban poor, with slightly more than one million of persons, exceeded in numbers the rural poor, around 70 million people. Nevertheless, extreme poverty grew in both relative and absolute terms. Additionally, it must be considered that an increasing part of the urban poor has recently originated in the rural areas.
According to FAO, the small peasants represent most of the rural poor, with two-third of the total, followed by peasants without land and indian native groups with 30% and 4% respectively. Table 9 shows the results of household surveys conducted in different countries of the region. According to this, between 1980 and 1994, urban poverty has increased from 25 to 36% and rural poverty has lightly increased from 54 to 55%.
Figure 9 POVERTY IN LATIN AMERICA
Source: Agricultural Development Unit ECLAC, based on ECLAC (1996) Household Surveys.
According to different sources and studies, more than half of the rural poor do not have possibilities to generate an appropriate income from agriculture. This means around 40 million people or 55% of total rural poor. The inequity in land and water distribution, low investment in human capital, contribute significantly to maintain rural poverty, in spite of the relative abundance of land in the region.
Different studies show an extreme inequity in land distribution. For example, the Gini Index for land distribution reached 0.86 in Brazil, 0.92 in Venezuela and 0.94 in Paraguay. On the other hand, the need for competitiveness in the current context of open economies, makes the survival of small farmers more difficult, given that they are mainly engaged in production of staples, which compete with cheaper imports.
On average, the nutrition situation for Latin America and the Caribbean has improved significantly. In fact, in the 1990's, the average consumption of energy was 2700 calories per day, similar to the world average and 8% over the developing countries' average. Regarding infant nutrition, Latin America and the Caribbean exhibit better indicators than other developing countries, but they are still high, since 20% of the infant population exhibit some degree of nutrition problems. Tables 10 and 11 show the situation for 1990 and projections to 2020 for food and infant nutrition according to three different scenarios; a) basic scenario, b) low investment and growth and, c) with trade liberalization. As can be seen, the results for the basic scenario are not so different from the scenario with trade liberalization.
Table 10
FOOD AVAILABILITY IN PER CAPITA TERMS
(Kilo/cal/day)
|
|
1990 |
2020 |
||
|
(a) |
(b) |
(c) |
||
|
Total world |
2773 |
2895 |
2758 |
2897 |
|
Developed countries |
3353 |
3532 |
3492 |
3512 |
|
Developing countries |
2500 |
2821 |
2662 |
2836 |
|
Latin America and the Caribbean |
2722 |
3026 |
2878 |
2963 |
Source: M. Rosegrant et al "Global food projections to 2020", IFPRI Discussion Paper # 5, 1995.
(a) Projection according prevalent conditions in 1990.
(b) Projection considering low investment and growth.
(c) Projections considering trade liberalization.
Table 11
INFANT MALNUTRITION
(% of total infant population)
|
|
1990 |
2020 |
||
|
(a) |
(b) |
(c) |
||
|
Developing countries |
34 |
25 |
33 |
25 |
|
China |
22 |
14 |
20 |
14 |
|
India |
63 |
45 |
56 |
44 |
|
Sub-Saharan Africa |
28 |
25 |
31 |
26 |
|
Latin America and the Caribbean |
20 |
14 |
23 |
15 |
Source: M. Rosegrant et al "Global food projections to 2020", IFPRI Discussion Paper # 5, 1995.
(a) Projection according prevalent conditions in 1990. (b) Projection considering low investment and growth, c) Projections considering trade liberalization.
|
PAÍS |
Forest & Other Wooded Land |
Forest Land |
|||||
|
Total Forests |
Natural Forest |
Plantations |
|||||
|
Extention |
Extention |
Annual Growth (%) |
Extention |
Annual Growth (%) |
Extention |
Annual Growth |
|
|
M há |
M há |
(1981-90) |
M há |
(1981-90) |
M há |
(1981-90) |
|
|
Costa Rica |
1,569 |
1,456 |
-2.44 |
1,428 |
-2.57 |
28 |
132.86 |
|
El Salvador |
890 |
127 |
-1.85 |
123 |
-2.06 |
4 |
37.06 |
|
Guatemala |
9,465 |
4,253 |
-1.58 |
4,225 |
-1.61 |
28 |
16.67 |
|
Honduras |
6,054 |
4,608 |
-1.94 |
4,605 |
-1.95 |
3 |
101.11 |
|
México |
129,057 |
48,695 |
-1.21 |
48,586 |
-1.22 |
109 |
9.29 |
|
Nicaragua |
7,732 |
6,027 |
-1.69 |
6,013 |
-1.71 |
14 |
143.85 |
|
Panamá |
3,266 |
3,123 |
-1.7 |
3,117 |
-1.71 |
6 |
14 |
|
Belize |
2,117 |
1,998 |
-0.24 |
1,996 |
-0.24 |
2 |
0 |
|
Cuba |
3,262 |
1,960 |
-0.19 |
1,715 |
-0.92 |
245 |
12.29 |
|
Rep. Dominicana |
1,530 |
1,084 |
-2.43 |
1,077 |
-2.46 |
7 |
7.54 |
|
Guyana |
18,755 |
18,424 |
-0.09 |
18,416 |
-0.1 |
8 |
171.82 |
|
Haiti |
139 |
31 |
-1.91 |
23 |
-3.95 |
8 |
256.67 |
|
Jamaica |
653 |
254 |
-5.08 |
239 |
-5.29 |
15 |
6.2 |
|
Surinam |
15,093 |
14,776 |
-0.08 |
14,768 |
-0.09 |
8 |
4.41 |
|
T y Tobago |
236 |
168 |
-1.75 |
155 |
-1.93 |
13 |
1.21 |
|
Argentina |
50,963 |
34,436 |
-0.57 |
33,889 |
-0.59 |
547 |
0.91 |
|
Chile |
16,583 |
8,033 |
-0.07 |
7,018 |
-0.79 |
1015 |
11.61 |
|
Uruguay |
933 |
813 |
-0.12 |
657 |
-0.15 |
156 |
1.44 |
|
Bolivia |
57,977 |
49,345 |
-1.12 |
49,317 |
-1.12 |
28 |
5.44 |
|
Brasil |
671,921 |
566,007 |
-0.58 |
561,107 |
-0.61 |
4900 |
6.63 |
|
Colombia |
63,231 |
54,190 |
-0.62 |
54,064 |
-0.64 |
126 |
23.96 |
|
Ecuador |
15,576 |
12,007 |
-1.65 |
11,962 |
-1.66 |
45 |
4.85 |
|
Paraguay |
19,256 |
12,868 |
-2.38 |
12,859 |
-2.38 |
9 |
35 |
|
Perú |
84,844 |
68,090 |
-0.37 |
67,906 |
-0.38 |
184 |
9.21 |
|
Venezuela |
69,436 |
45,943 |
-1.13 |
45,690 |
-1.16 |
253 |
19.16 |
