Analysis of Objectives of the Development of the Agricultural Frontier of Nicaragua

Brautigam, Harry Emil

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Description

Title

Analysis of Objectives of the Development of the Agricultural Frontier of Nicaragua

Author(s)

Brautigam, Harry Emil

Issue Date

1980

Department of Study

Agricultural Economics

Discipline

Agricultural Economics

Degree Granting Institution

University of Illinois at Urbana-Champaign

Degree Name

Ph.D.

Degree Level

Dissertation

Keyword(s)

Economics, Agricultural

Language

eng

Abstract

• A primary objective of this study was to determine the productive organization of the agricultural frontier of Nicaragua that would result in the maximization of economic and social benefits. This was assumed to be obtained by selecting a development strategy that would minimize the trade-offs between the established development objectives and lead to the efficient use of resources.
• The agricultural frontier of Nicaragua is a region of 401 million hectares of underdeveloped agricultural land, equivalent to one-third the size of the country. It contains 10 percent of the country's population, for the most part engaged in subsistence migratory agriculture. This government-owned land became attractive for development because: First, it was a means of creating employment and reducing land pressure in the rest of the country where most of the population is concentrated. Second, it was expected that by providing each farmer with land and the needed resources for production, their income would increase, thus contributing to the reduction of income inequalities. Third, since the frontier land was suitable for diversified agricultural production, it was expected that its development would have a positive impact on the country's GNP by increasing and broadening its export base. Therefore, the objectives of colonizing the agricultural frontier was to create employment, increase income, and provide needed foreign exchange.
• Compatibilities or contradictions are usually present when more than one objective is pursued. Hence, it was felt, that by identifying the nature of the interrelationships between objectives would lead to the maximization of the economic and social benefits that can be derived from the development of the agricultural frontier.
• In order to do this a multiperiod linear programming model was applied to the agricultural frontier, relating the different crop alternatives to the government objectives of income, employment, and foreign exchange maximization. Three types of crops were included: annuals, perennials, and semiperennials, and were analyzed within a time-frame of ten one-year periods and a terminating period of fifteen years.
• Each objective maximization led to a unique productive organization differentiated from each other in their degree of fulfillment of the other objectives and their resource utilization. The results of the model suggest that: (1) the maximization of net income would be achieved by implementing a development strategy of self-sufficiency; (2) the maximization of export earnings would require a strategy based on trade; and (3) the maximization of employment can be attained by relying partly on food production within the region and on purchases outside the region.
• As expected each objective was at its highest value when it was maximized, but they differed in their degree of fulfillment of the other objectives. The maximization of export earnings was found to be the objective that minimized the trade-offs between the three objectives.
• In order to compare each objective in terms of the efficiency of resources used, a selected set of productive and investment cost criteria were utilized. The results obtained suggested that by pursuing the export maximization objective, the development of the agricultural frontier would result in the maximization of economic and social benefits.
• The recommendations of these findings differs from the approach followed in the existing colonization process applied to the agricultural frontier. The implications are that much could be gained by re-evaluating the traditional approach to colonization in Nicaragua. Otherwise, the expectations of the region's development potentials might be over-estimated. Although the agricultural frontier has the resource potential which if properly utilized would contribute to the solutions to the country's major problems, the capital required to do so was found to be large.

Graduation Semester

1980

Type of Resource

text

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