chapter 9 study guide

What policies can correct them need collateral to

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Unformatted text preview: idies reduce efficiency – Rice in Tanzania o Import tariff and bans to raise domestic prices – rice in Nigeria • • • • • • • Address environmental externalities in the ag sector o Water scarcity o Deforestation Provide agricultural research, extension and marketing services o Teach farmers the newest techniques o Public good– who else would provide them? Provide institutions and infrastructure o Ex: markets, property rights Address poverty traps o Find the right “big push” o Rural poverty traps §༊ Feedback loop or chicken- egg problem §༊ Why is each of the following a poverty trap? §༊ What policies can correct them? • Need collateral to obtain credit • Rural child labor and children out of school • Low health and nutrition means less productive workers • Lack of insurance • Lack of middlemen and low specialization • Farm erosion traps Latin America o Unequal land holdings, large rural inequalities §༊ 1.3% own 72% of land §༊ The latifundio- minifundio (large plantation small farms) dualistic pattern still persistent o But medium sized and family farms are also prevalent and more productive §༊ Lower supervision/transaction costs...
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