RESTRICTED
Vol. 7
This report was prepared for use within the Bank and its affiliated organizaiions.
Public Disclosure Authorized They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views.
INTETRNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT IN'ERNATIONAL I)EVELOPMENT ASSOCIATION Public Disclosure Authorized
CURRENT ECONOMIC POSITION
AND PROSPECTS
OF
17VTVN~7TTW'T A
(in seven volumes) Public Disclosure Authorized VOLUME VII /
A C"DTWTTT VrTTW ' n / C7~~~7
October 12. 1970 Public Disclosure Authorized
CGntral America and (-hrihhian Departmnpnt CfTORR'MENCY EQUI3T1A T VWjIL'
Basic rate D?S -$14.50 Bolivares (Bs.) Bs.1 = US cents 22.22 Petroleum export proceeds: US$1 = 4.40 B-iivares (Bs.) Bs.1 - US cents 22.73 Petroleum imports: US$! = 4.48 Bolivares (Bs.) Bs.1 = US cents 22.32 TABLE OF CONTENTS
Fage No
SU7MMARY AND CONCLUSIONS ...... i
I. INTRODUCTION. 1
II. BACKGROUND ...... 1
Environment ...... I mwnership and Land Use ...... 2 Technology...... 5 Institutional St7uctr ...... 6 Finance ...... 6 Price Support Progra...... Profitability and Output ...... 9
III. CURRENT POLICY ISSUES . 12 IV. UTLOI, ...... 1 IV. OUTLOOK ...... 19
A. Prospects for Agricultural Development . . 19 B. Public Investment ProgrCUm, 1970-74 . . . . 21
APPENDICES
A. Agricultural Projects
B. Statistical Tables SUMMARY AND CONCLUSIONS
1. Agriculture in Venezuela provides iess tnan 7 percent of GNP and less than 2 percent of export earnings. However, because of the large number of people employed in agriculture (26.9 percent of the total labor force in 1969), agriculture has a social importance out of proportion to its economic contribution.
2. Venezuela has a total area of 912,050 square kilometers with an estimated rural population of 2.5 million persons, giving a density of less than three persons per square kilometer. However, much agricultural land suffers from seasonal deficits or surpluses of water, unsuitable terrain or poor soils. Although the mountain valley and piedmont regions are generally productive and there are possibilities for the extension of rain-fed agriculture, elsewhere heavy investment is necessary in irrigation, drainage or flood control for land development. Large areas of the south and east are suitable only for extensive exploitation in pasture or forest.
3. Traditional technology and limited financial resource availability to farmers are major constraints to increased agricultural production among both small and large farmers, and although the use of machinery, fertilizer and other inputs has increased rapidly in recent years, this increase has been largely restricted to the production of rice and industrial crops. The public Agriculture and Livestock Bank (BAP) has been the principal source of agricultural credit, but its activities have had a heavy social orientation, emphasizing short-term loans at low rates to small producers. Most of its portfolio is frozen.
4. Public sector participation in agriculture is based on BAP, the Ministry of Agriculture (MAC) and the National Agrarian Institute (IAN), while the Ministry of Public Works (MOP) is responsible for infrastructural investment, including major irrigation. The coordination between the different agencies, the planning and exploitation of irrigation projects, the administration of the price support and credit program, and the extension and research services all offer ample room for improvement.
5. The agrarian reform program has been a major component of govern- ment policy since 1958. During this time, more than 4 million hectares of land have been distributed to 160,000 families. While this program has, by its verv size. had a considerable effect on the peasant sector, the benefits to the families resettled have in most cases been slight. The proposed PRIDA nrogram - to be sunnorted by an IDB loan - will nrovide some necessarv works of consolidation; further expansion of settlements is also planned.
6. The value of agricultural production has maintained a growth rate nf 5.1 nprcpnt- Annitn1ly nver the naqr decadpe Thic hAs hpbn achieued largely by rapid increase in production of sesame, rice, sugar cane, milk and oult y ir. response to activ.e -over.vent.r.t policies14 ar heain exper.diture v I -_~~~~~ r-- -n- in this sector. Agricultural exports have grown, but the three principal ,--.odA4 4t-4 (-coffee coca arA rice) are sold at a loss to th- Goverrnmrt. - ii -
i. Past policy has depended on heavy government expenditure and a protected domestic market in which high production costs are passed on to the consuimer. increased production has led to marketing problems for rice and sugar, however, and import. substitution is nearly complete for several other commodities. in its present form, agriculture in Venezuela is generally uncompetitive both in the internal market for capital and in the externa.L market for agricultural produce. Past government policy may have intensified this basic lack of competitiveness by encouraging increased physical output more than greater productivity, and its subsidized credit: and price support programs have not encouraged cost efficiency.
8. The conditions affecting agriculture have changed considerably over the past decade, and these changes should be reflected in future govern- ment policy. In view of the present fiscal restraints facing the Government, public expenditure in agriculture is unlikely to continue at the recent high level. In aLddition, the opportunities for import substitution within the closed domestic market will be insufficient for much future expansion of agricultural production. A further change has been the continued migration from the countryside to the cities and the shift out of agricultural employ- ment, which is gradually reducing the need for socially-oriented policies in this sector. In the long-term, therefore, the most suitable development strategy may be to establish agriculture on a more efficient - and hence more selective - economic base, usinig a reduced labor force and only a slightly larger land area.
9. For certain commodities, import substitution still offers opportunities for increased production (e.g. maize, beans, beef). In other commodities, however, production will have to be adjusted to domestic demand, unless the Government is willing to shoulder the fiscal burden of growing export subsidies. The overwheLming importance of petroleum exports sets the exchange rate at a level that makes it difficult for other sectors to compete in world marlcets without such subsidies. They would only be suitable, hor- ever, if care were taken to restrict them to the most efficient product lines and if the additional fiscal burden were met by corresponding revenue measures.
10. In general, the most promising export lines are unlikely to be found among raw produce in the foreseeable future. Instead, advantage should be taken of Venezuela's well-developed commercial infrastructure to supply high-value processed commodities to a selective world market. While long- term prospects may lie in a wide range of processed foods, short-term poten- tial can best be realized by the production of winter vegetables for the U.S. maiket.
11. The Government has formulated its lona-ternm strategy in general terms, but detailed policies have not yet been defined for many specific issues The draft Five-Year PlAn nronposes a target grnwth rate nf 7.3 per- cent annually between 1970 and 1974, but is projecting a level of public inveuatmnt nnly a lit-le aAhnov that of previous fie years. Whlhile t-his leaval of investment is not far out of line with expected financial resource avaiL- ability, it will not be suff-cient to achieve h-rget growth rate, -_hi- appears overly optimistic. Policy outlines for agrarian reform, cereal policy, credi-t programs, 1iv-etock devmlopmnt. and pr4i^ supportp - iii - are inconsistent with the projected level of investment. In addition, private investment is unlikely to grow at a faster rate than in the past. In view of these factors, the growth rate for agricultural production over the 1970-74 period would probably be more nearly 4-5 percent. I. INKTRODUCTION
1.01 The considerable income that Venezuela derives from petroleum tends to obscure the fact that structurally and institutionally the country possesses many of the characteristics of a traditional society. Although the agricultural sector makes only a minor contribution - 6.7 percent - to GDP and - 1.5 percent - to exports, it continues to provide employment for more than one-quarter of the nation's labor force, and is directly related to the low st:andard of living that is found throughout much of the country outside the larger cities. About 13 percent of commodity imports are aLgri- cultural and forest products.
1.02 Agriculture is practiced throughout the country but production is concentrated in the heavily-populated mountains and piedmont zones in the north and west. To the south and east, the vast flat or undulating areas of t:he Llanos and the Orinoco Valley are thinly populated and are exploited only extensively. Although parts of this region may be suitable for more intensive agricultural exploitation, the greatest potential lies in extensive livestock production. South of the Orinoco there is little agricultural development, and the potential of this area lies largely in forestry.
II. BACKGROUND
Environment
2.01 Although Venezuela possesses a wide range of climates, most land is located in the tropical and sub-tropical zones. Through much of the countrv, rainfall distribution is characterized bv a 'winter' wet season from April. to November and a 'summer' dry season from December to March, although this dry season is not as pronounced in the mountain and piedm,ont zones as it is in the other regions. Total annual rainfall ranges from less than 700 nms. annually in the northern coastal states to more than 3,000 imms. in parts of the southeast, but in general is between 1,000 and 2,000 mmS a annually-
2.02 Venezuela nosesses 912;050 square kilometers of land area. but most of this suffers from limitations of climate, topography or soils. GlimAte limitntinnq in the form oF inadenuate or noorlv distributed rainfall affect large areas of the northern coastal states and the piedmont regions. Rainfead icgricutlturis .despr'ad in thesoe arpe>a but yiel ds ran hp seYere- ly affected by annual fluctuations in rainfall. Extensive cattle ranching on natural npastu,ve 4n the TLanos isffrer fromw ahnotagna nf drinking waer and pasture in the dry season causing heavy loss of life and weight to the herds.
2.03 The flat terrain of the Llanos, as of much of the south and east of the count.r. 4i also affected 1by widep-A f1odn na iA4-nth wet This is a major constraint to the development of intensive agriculture in th-ese regior.s, asnd. aIso causes considerab-le losses am,ong the cat-le ILLi0 L~LJL ~LU L±0 L U~ .I LUL &u .L~ L J00 ,LfJ L~ . L..LL..L population (an estimated 8-10,000 head are lost annually in the State of AprUL aLULIe. 1arge-scale investr.ent in irriLgation is necessarj Lor the - 2 -
upper Lianos and southern piedmont regions, while flood control works are needed along the Apure and Arauca rivers and in the Orinoco delta before agricultural production can be developed. Similar probiems of periodic flooding and poor drainage are found in the southwest Zulia, between Lake Maracaibo and the Andes, where a large-scale reclamation project is under way.
2.04 Topography is a major constraint to agricultural production in the mountain regions of Venezuela. Throughout the Andes and the coastal ranges, agricultural land is restricted to the valleys and to the gentler slopes. Because of the high population density in these areas, however, cultivation often occurs in zones topographically unsuitable for agricul- tural production, with consequent erosion, poor soil fertility, low productivity and difficulty of mechanization.
2.05 Large areas of Venezuela possess soils that, for reasons of low fertility, poor structure of salinity, are unsuitable for agricultural use. The heavily-weathered laterites of the Guayana Highlands, south of the Orinoco, possess little productive potential, while low soil fertility makes much of the lower Llanos region and the Orinoco valley more suitable for extensive use in pasture or forestry than in intensive agriculture.
2.06 Despite these limitations, the mountain valley, piedmont and northeastern regions are generally suitable for rainfed agriculture. In many areas, however, soils have been reduced in productive capacity as a result of long use, erosion and mismanagement, and some soils of intermontane valleys, especially in the Valencia basin, suffer from salinity caused by a high water table and misnanagement of irrigation.
2.07 The overall picture, therefore, is one of an environment only moderately suited to agricultural production. While some areas of highly fertile soils are found, especially in the valleys of the mountain and piedmont regions, most agriculture is practiced under moderate to serious environmental limitations. Although large areas of the country appear agriculturally underutilized, much of these are unsuited to intensive or even extensive production. Where conditions of soil and topography present real agricultural potential, as in parts of the southern piedmont and south of Lake Maracaibo regions, considerable investment in irrigation or drainage is often necessary to bring land into production. There are, however, some areas in the niedmont region suitable for rainfed agriculture that are not yet in production, and where settlement and cultivation can hp expnnddp without heavv investment.
Ownershin nnd L.n"d Use
9 nQ _~~~~~~~Tnformti4 on on -onlatl*, onni v,and e nnl lox4ment.7 ; n-- orir-0----- r'il tii- r-o a 4a restricted to projections based on the 1961 census. It appears, ho we v e r , t-hrat the no-Ulat I,n emplo-ye in nagric,ulturea i nnow Fnairly stat at around 800,000 persons. As a result of continued urban migration and thUe growth of alterra".ave em.ploym,ent opportunities over the pastL two decades, the proportion of the labor force engaged in agriculture has declined but, until the last two or three years, the absolute number of persons has continued to rise. It now appears likely, however, that the agricultural labor force is beginning to decline in absolute terms.
2.09 Comprehensive data on land use and employment are also based on the Agr:Lcultural Census of 1961, and thus are badly out of date inasmuch as they do not yet reflect most of the impact of the land reform. In 1961 an estimated 26 million hectares of land were held in farms, of which only 6.4 percent was planted in crops. A further 63.7 percent of this land was used as pasture, while the remainder was unused or in fallow (see Table 5). In the same year, an estimated 84.2 percent of the farms were owner-occupied, while renters and share-croppers made up only 2.8 percent. The remainder, 13.0 percent, were occupied by precarious tenants who lacked title to the government or Drivatelv-owned lands which thev farmed.
2.10 In 1961 98.9 nercent of the farmerR worked only 7.9 nercent of the land in farms (see Table 6). Since that time, however, more than 4 million he,tares oiF nublfc and nrivate land have been redistribtuted iundier the agrarian reform program, benefitting more than 160,000 families who nrevlntulv la7eked l.rfahle farmR (gPP Tahle 7)_ Hnwpvpr CrORfTPT.AN PatImiat-a that only 100,000 of these families remain on their land, and the National Agrarian Instritute estimate that a f,,rtlpr flOOnOo famlli1es depndent on agriculture still possess less thaLn 5 hectares.
2.11 Although some progress has been made towards improving the resources and training of peasant farmers, the large number of small landowners, tenants, share-croppers and squatters still presents a consider- able obstacle to agricultural development Efforts to lessen this probLem through the agrarian reform program have concentrated on resettling smaLl faU-ers or. undlerutiLlized publicpubli. andSar;d private lar.ds , Whille much.. less progress has been made towards granting land titles, providing technical assistance or4initiating cooperatives among aexisting fa.r-ers. 21 T.he agrari.an rerom, progra... has been ce..tral to government poLicy
~.. ~ .LRtLLE,1 ±ILIIILia J . IIL u~L _.L L~. L. V L~UAL jUL.LL in agriculture since 1958. It is an ambitious attempt to redistribute public anlu private land to small subsistence farm..ers, tenants andl workUers , and to improve their social and economic position.
2.13 The Agrarian Reform Law of 1960 directs the National Agrarian ILnstiLtute (uImj to traLUsf'oruL the agrariLani structure or thle country, anu to incorporate the rural population in the economic, social and political uevelopmenL of tne nation. Land donated by tne state or expropriaLedrfrom private individuals with funds derived from budgetary transfers and the issue of agrarian debt bonds, is redistributed by IA.
2.i4 'rTe progress of the agrarian reform program has not been even. A great deal of land was distributed in 1960, in response to the demands of the peasants" federation (Federacion cie Campesinos), with little planning or follow-up of the redistribution. This process slowed considerably between - 4 -
1961 and 1964, as greater emphasis was placed on the granting of land titles, but accelerated again from 1965. In the past five years, there has ueen not on.ly greater overall a.tivity in the. po ., butbu also 4--reao-si emphasis on secondary investment to bring land into production. Similarly, priority Lhas bLeen given to .lhe incorporation of public rath er t1-han private lands, except where the latter are unused.
2.15 Despite these quantitative achievements, IAN has in several respects
Laileu to miLeet thle Objectives of the agrarianLar reL pLrogram. v..L theI on hand, IAN estimates that between 260,000 and 380,000 families are eligible to receive lana unuer the program, but only around 170,000 have in fact uorue so. A comprehensive survey found that in 1967 the average family income of beneficiaries under the agrarian reform program was Bs 3553, of whic-h nearly one-half was derived from employment off the farm. 1/ The median family in- come, at Bs. 1110, was even lower. 2/ The same survey snowea tnat in purely economic terms only one-third of the families were better off than before the reform.
2.i6 Productivity within the agrarian reform settlements remains low. On average, of the land available to each family only half is utilized, and the total value of production is Bs. 595 per nectare. LlvestocK pro- ducts comprise less than 5 percent of receipts from the sale of farm produce. Tne reasons for this low productivity lie in the very low capital assets of the majority of the farms (average Bs. 5313, median Bs. 484), the poor technology (machinery is used on nearly half the farms, but fertili- lizers on only one-fifth) and the lack of services (two-thirds of the farms receive no technical assistance, one-half lack agricultural credit facili- ties, and one-quarter do not have farm roads).
2.17 An awareness of the need for improvements of productivity within the agrarian reform program is reflected by the proposed Integral Agricultural Development Program (PRIDA), which the Venezuelan Government is preparing for financing by the Inter-American Development Bank (see Appendix A). This program, which will cost Bs. 816 million over four years, is directed at providing coordinated investment at the farm level in 111 agrarian reform settlements in the northern half of the country. It comprises eight sub- programs in feeder roads, irrigation, settlement consolidation, credit, silo construction, extension, research and training. This ambitious project will play an important role not only in providing much needed investment in crucial aspects of farm development, but also in improving the efficiency of the institutions involved. Of primary importance will be the coordina- tion of the five separate government agencies at both the planning and the field levels.
1/ See CENDES/CIDA "Reforma Agraria en Venezuela."
2/ The average annual wage of workers in the petroleum industry was about Bs. 40,000. -5 -
2.18 PRIDA should make a major contribution towards raising the produc- t4vity of ;-x4st4rg settlem.ents. oUwever, TA Xi also plans - reistribut. a further 3.L million hectares to 115,000 families over the next five years. Such. an expansior.in diwtwv PRIDA, hJWever,-t wol J,CeCpla a severe strain on the financial and administrative resources of IAN - resources W&Lh.iL& ULA4gbl:i: LiemLorL effectively uLJ..LizedC wJith.in existing settL.Lements.
LC4IL&LFU.LUY
2.19 Primitive techtnology associated with t-raditional methods of produc- tion is a mrajor cause of the low productivity of Venezuelan agriculture. 'WIhlile there are some exceptions in certain regions - notably in tne larger valleys of the mountain regions and parts of the piedmont - and certain products (s'ee below), production methods in general have changed little over the past two decades. In some respects, recent government policy, with its price support and credit programs not geared to loan recovery, has encouraged the continuation of traditional methods by insulating the farm from economic ressures, and thereby providing little incentive for improving cost efficiency.
2.20 Despite these negative effects of past policy, there has been a considerable increase in the use of agricultural inputs in recent years (see Table 8). In response to higher prices and expanded credit programs, the use of fertilizers has grown at an average of 37.2 percent annually since 1960, while the use of chemicals such as insecticides, herbicides, etc., has grown by 9.2 percent. Imports of tractors and agricultural machinery have increased greatly, and the supply of certified seed has also risen. It is estimated that the use of purchased inputs, excluding labor, in agricultural production rose from Bs. 198.9 million in 1960 to Bs. 43.5.2 million in 1968, an average annual increase of 10.3 percent (see Table 8).
2.21 This increase in the use of inputs has not, however, been spread evenly throughout the sector but has concentrated in two specific groups of producers: (i) large and medium commercial farmers engaged in the production principa]Lly of sugar, but also of other crops such as rice, cotton and truck crops; and (ii) certain larger peasant settlements under the agrarian reform program, especially those on irrigated land in the southern piedmont region, which are primarily engaged in mechanized intensive rice production under the guidance of the National Agrarian Institute (I)N).
2.22 Avrerage arnnual consumption of fertilizer is around 150 kilograms per hectare of cultivated land, and the total number of tractors was appr ox- imately 17,500 in 1968. They worked an average of 100 hectares each. Because these inputs are concentrated in certain areas and groups of farmers, however, for much of the sector there has been little progress in improving technology or raising productivity. Similarly, in 1969 the extension service of the Ministry of Agriculture worked with about 170,000 hectares, less than 10 percent of the total cultivated area. Although similar services are provided on a small scale by some private organizations, the maiority of farmers do not benefit from any form of technical assistance. -6-
Tnstitutitonnal Struirture
1 2 213 Ptbh Iic Adinicfrt Ainn in -or ir-l tIti ri 4ct h acAP nn fntir nr -4noI1 organizations. The Ministry of Agriculture (MAC) provides general planning annd crdvnt-inatn no wall as resarch and extonsion corvices. The National Agrarian Institute (IAN) administers the agrarian reform and land settle- ment programs, w.hile the Agriculturoal and ivesAtock Bar.k (BRAP) cor.tol agricultural credit and price support programs. Infrastructural invest- ..ert ir. irrigation and land reclam.atior. is in the kanAs of the HyAraulic Works Division of the Ministry of Public Works (MOP).
2.24 In practice, the division of responsibility is not clear-cut. Although TAXI and B2AP are -inst-itutes "nithin C, they possess a high degree of autonomy in both financing and policy-making. In the agrarian reform settlements, the responsibility for planning secondary infrastructure works and technical assistance is not clearly defined. Similarly, in marketing and price control not only MAC and BAP are inUvolved, but also the Ministry of Development and the Central Bank in the payment of import and producer subsidIes.
.2 ToI0resolve the resultant ineffieciencies in program planning and implementation, a large number of inter-agency committees have been estab- lished, both at the policy-making level where CORDIPLAN and the Ministry or Finance are also represented, and at the field level. While these committees assist coordination in specific projects or sub-sectors, hney also complicace and often slow down the overall planning and administrative mechanism.
2.26 lhe current situation is complicated by two further factors. Firstly, the new Government is reviewing many aspects of agricultural policy, and detailed programs have not yet been defined in many areas. Secondly, the Agricultural Development Bank (BDA), which began operations on January 1, 1970, has been established to provide credit for commercial agriculture, but its role in relation to BAP remains to be fully clarified.
Finance
2.27 Financial constraints are a major obstacle to expansion of agri- cultural production. In 1968 less than 10 percent of the gross value of agricultural production was financed directly by institutional production credits. Private investment in agriculture has been low compared to that in other sectors, and commercial credit has similarly been attracted more by the high profits and low risks offered by industry and services. Under existing banking legislation, long-term agricultural loans (more than two years) can only be made by the Venezuelan Development Corporation (CVF), the one existing private finance company (CAVENDES), and the two agricultural banks (BAP and BDA). CAVENDES has not yet financed any agricultural projects, and CVF activity in this sector is restricted to a few loans to processing plants. As the BDA is only just beginning operations, the sole effective source of long-term agricultural credit in the past has been the BAP. NET FLOW OF INSTICUTIONAL CREDIT TO AGRICULTURE (millions of Bolivares)
1965 1966 1967 1968
Commercial banks 38.5 53.6 33.5 43.8
BAP /1 266.6 292.0 300.7 292.2
short-term (179.6) (206.5) (212.2) (194.21
long-ttrm (87.0) (85.5) (88.5) (98.0)
Total Agriculture 305.1 345.6 334.2 336.0
/1 Includes government account.
Source: Table 9.
2.28 The BAP has been the source of about two-thirds of total institu- tional credit available to agriculture. The remainder is provided by (Il) commercial banks and (b) BAP operations on government account (see Tables 9 and 10). The BAP divides its activities between large and small farmers. Its loans, both short and long-term, are generally soft (by law, loans to small farmers cannot carry more than 4 percent interest) and the rates of repayments are very, low (although exact data are not available, a rough estimate shows the return to be less than 20 percent 1/). Planning and supervisiorn of BAP loans are deficient, and many small farmers have incurred debts which they are unable to repay. There is no alternative supply of long-term credit in agriculture at the present time, however, and farmers who are unable to obtain loans from the BAP have recourse only to high- interest shiort-term loans from private commercial banks. The BDA has been established to meet the needs of these farmers, but some time will be needed before its financial resources and administrative abilities are sufficient for it to make a significant contribution to this sector.
2.29 Until January 1. 1970. when, the Agricultural Development Bank (BDA) began operations, all public credit programs in this sector were administered by the Agriculture and Livestock Bank (BAP). The loan port- folio of BAP has developed as follows:
1/ e.g. see the annnian rnnrtsa to rnngreas of t-he rntralorla Ganeral 4a la Republica. - 8 -
('Milions or Boiivares End or i967 tnd of i968 Mid-i969 E.nd of i969
Ordinary loans 802.0 852.5 894.0 Special loans (MAC, AID) 499.0 549.6 578.3 251.9
Total Loans /2 1,301.0 1,402.1 1,472.3 1,187.3 Less: provision for bad debts:- 158.9 158.9 158.9 183.3
1,142.1 1,243.2 1,313.4 1,004.0 Plus: debtors in court 52.4 47.4 47.1 46.8
Net Loan portfolio 1,194.5 1,290.6 1,360.5 957.2
/1 Reflects transfer of commercial portfolio to BDA. /2 According to the audit of the Contraloria, bad debts greatly exceed the reserve shown on BAP's balance sheets.
Source: BAP
2.30 BAP provides loans only at subsidized interest rates. These vary from 3 percent annually for loans to peasant farmers and supervised loans below Bs. 20,000. BAP has suffered an average loss of Bs. 12.8 million annually since 1960 on handling its loan portfolio, in addition to the capital loss resulting from defaults on loan amortization. These losses have been met by annual transfers from the Central Government, which grew from Bs. 61.9 million in 1960 to Bs. 194.2 million in 1969. However, the transfer budgeted for 1970 is only Bs. 88.6 million which, even allowing for the transfer of the commercial loan portfolio to BDA, will inevitably result in a reduction of the BAP credit program to peasant farmers.
2.31 The BDA began operations in Januarv 1970, with a paid-in capital of Bs. 20 million, of which half was raised from private sources and half *ont-rihbtted1 by t-he rovernment-- Tn ardieion, the BDTA is to reseive the commercial loan portfolio from BAP and the outstanding agricultural port- fol4n fro.m. the Venezu7el n DevelNpm.ent Cnrnnratinn (GVF)i and it will handle in trust the commercial sector of the government account previously a1dministered byBRAP (teh4 compIsesq the T.Ietrock Develop,r-ment Pl an, the Coffee and Cocoa Plan, and the Fruit Plan). It is not yet clear, however, how these funds wIl - -- ag -4w-th respect to accumulated bad debts in the portfolios. Some questions also remain to be resolved concerning interest rates = while the BDA intends to ch-rge rates of 9-11 percent annually, a definition has yet to be established of the dividing line between sr,all anu m.edl ur, 4a.rm.ers, who will continue to be el4b foUrI soft loans from BAP, and large farmers who will now only have access to BDAut at corimercLial LnLterest rates. -9-
PriLc _uppPLL. rLUg,iU2
2.32 A major instrument of govermLLLLent policy in agriculture sinte 1958, the minimum price program has covered production of rice, maize, coffee, cocoa, beans, potatoes, cotton, sisal and milk. hne guaranteed minimum prices for these ccommodities are decided annually by the National Agricul- tural Marketing Committee (COKAMAG), and tne policy is impiemented by subsidies paid by the Ministry of Development (for milk, coffee and cocoa) and by direct purchase by BAP (for the remaining commodities). Products purchased by BAP, together with imported produce and produce received as loan repaymtent in kind, are stored, dried, and resold to wholesalers or manufacturers or exported. The loss involved for the two agencies averaged about Bs. 110 million annually over the past five years (of this, 54 percent was incurred by BAP, largely for rice and maize, and the remainder by the Ministry of Development - 37 percent on milk, one percent on coffee and 8 percent on cocoa).
2.33 While the price support program has played a large part in the spectacular expansion of rice production, and increases have also been registered in maize, cotton, sisal and milk, little success has been achieved with the other commodities. In addition, the high prices fixed for rice and maize, in conjunction with an import subsidy on wheat, have led to severe disequilibrium in the supply and demand of cereals (see paragraph 3.05 below). This partial government intervention in price setting has also distorted the flow of resources within agriculture, reducing incentives for the production of other commodities and resulting in irrational land use, especially in rice cultivation in the piedmont regions.
2.34 Thus the existing system of fixing and implementing the price support program: (i) has been only partially successful in stimulating ex- pansion of production; (ii) is very costly to the Government; and (iii) has proved insufficiently flexible to adjust to changing conditions, and so has led to distortions in resource use.
xroiL.LL.abili.y and Outp-
Z.. .JJ2.3. ~~~ I.Ln economULcLecnri terms LL tl.,-heLL Lagricu'-ura' L ~JLL A.~LLJ sector L. continuesLLiU~ toL. beUV cLa' disadvantage to the rest of the Venezuelan economy. Despite technological improvements ana increaseu farm prices in recent years, the return on investment in agriculture is significantly lower than in other sectors. using data compiled boy tne Central Bank, Lne annual reLurn on IIxeu invee:L- ment, excluding land, in agriculture has averaged around 7.5 percent in recent years, compared to 16.0 - 22.0 percent in industry.
2.36 TLe little statistical information wnich exists on investment iat a farm level supports these global figures. In a series of studies in areas in which it was active, BAP showed that the average return on invested capital varied cons:Lderably, but was rarely above 20 percent annually (see - 10 -
Table 11). These surveys were made on fairly large, mechanized farms, and it arn hb ncqiimed that rri nl tliire baspd nn food rron nrnditioinn iindier poorpr environmental and technological conditions is even less remunerative.
2.37 Most production continues to come from economically inefficient fa-s operating ata low level of productivity. Th. 4inrcrre noutput thaIt has been achieved in the past ten years has depended on: (i) a high level of current govearnmnt expend ture >~~~~~~~~~,(r h 4. s 4-1Inn c L ..ud s eshoe1-X -9 V-zs e loans ft1- are 1 --_ ..aozV V& Z repaid); and (ii) a closed market in which most of the high production costs can bue passed on to tecn .r 2.380t.A.JU LO L.L& AgricultU jJ OO L re'sJL. L. d1sadvantage.. mf*OLULC -in relation1flC to other sectors can b-e expected to continue. The difficulty of accelerating technical progress
Ln a highly dispersed sector with liml,ited LfLinanciiaiL n a a ndU hIur,an resoburces will handicap development in agriculture. As the socio-economic levels of urbuan populations riLse andU ind-usrial opportunities expand, mLLgratJLon to th'Le cities will continue and agriculture will increasingly become the sector of residual employment. IlTe greater ee andU Lower cost of providing euULdLcato- and other services to concentrated populations is likely to enlarge the gap in sKills and training between the citLes and thie countryside.
21.39 Future government policy on agriculture must therefore take full account of the costliness of forcing a rapid expansion of production on a relatively poor resource base. Only part or the sector can compete witn other sectors in the internal market for capital and technical skills, and the very high capital output ratio for this sector (6.9 compared to 3.2 in industry and 2.8 in commerce and services), suggests that agriculture cannot be expected to be a major source ot growth for the economy.
2.40 rhe deflated gross value of agricultural production in Venezueia grew at an average annual rate of 5.1 percent between 1960 and 1969. This growth rate is greater than that ot GDP in the same period, and retlects the strong emphasis placed on the agricultural sector after 1958. Part of this increase is due to greater use of inputs, however, and estimates of value added in agriculture show a growth over this period of 4.8 percent (see Table 1). On the other hand, the total land under cultivation increased at an average annual rate of 4.1 percent between 1960 and 1969 (see Table 13) while the value of crop production grew only at 3.9 percent, suggesting that the increase in agricultural production has resulted more from an extension of the agricultural area than from improvements in productivity. The value of crop production per cultivated hectare fell from Bs. 1,033 in 1960 to Bs. 1,017 in 1968.
2.41 Growth in output was spread fairly evenly between the four principal sub-sectors of crop, animal, fish and forestry production, with the greatest increase being achieved in livestock, specifically poultry and dairy (see Table 1). Hlowever, the rapid expansion of sesame, rice and sugarcane produc- tion disguises the stagnation of many traditional crops, including beans, potatoes, cassava, plantains, bananas, coffee and tobacco (see Table 2).
2.42 Increased agricultural production over the past ten years has been directed at the domestic market, and this is reflected by the decline in both the absolute and the relative levels of agricultural imports (see Table 4). The greatest success in import substitution has been achieved with rice, which is now in surplus compared to imports of 13,000 tons in 1960. Making allowance for short-term fluctuations, considerable progress has also been made towards replacing imports of oilseeds (especially sesame), milk and pig-meat with national production.
2.43 Ihere has been rather less progress in recent years towards expand- ing and diversifying exports of agricultural commodities (see Table 3). Production of the two traditional exports has been static (coffee) or grown only slowly (cocoa), with the result that increasing domestic demand has led to a gradual decline in surplus for export. This has been particularly true with coffee, for which Venezuela has been unable to meet its export quota for many years. The volume of cocoa exports has remained fairly steady, but variations in the world price have led to annual fluctuations in value.
2.44 Despite the decline in traditional export commodities, there has been sufficient expansion of other products to maintain the overall level of agricultural exports. New commodities include tomatoes, grapefruit and melons, all of which were exported in 1969.
2.45 It should be noted, however, that of the five principal agricultu- ral export commodities, only plantains are sold under free market conditions. For coffee and cocoa, the exporter is paid a guaranteed price which is generally slightly higher than the world price, resulting in a government export subsidy (see Table 12). It is not clear how much of the subsidy is passed on to the producer. For rice, the subsidy is considerably greater (prices received for exports in 1967 and 1968 were only about 48 nercent of cost to BAP), and the Government holds stocks of more than 200,000 tons of rice, which ran only hp so1d on the world market at a ei,bstantial 1oqq Sugar costs are such that exports are restricted to the preferential U.S. market= The proansper for any zignificnant increase iin orts of these commodities must, therefore, wait on a substantial improvement in production c Os t.S
2.46 A m4Ore factor in the expovanenn of agrricultural prodcinover the past ten years has been the considerable government expenditure in this sector. The Government program has consisted of increasitng research and extension services, investing in large-scale irrigation and drainage projects, implementing the agrarian reform anid land settlement program, providing subsidized loans to farmers and supporting a minimum price program for agricultural pr1o1ducts. G-ov*e-..a.era.t tra-sfersa to .h agriculturalas.t-or grew from Bs. 499.0 million in 1960) to Bs 927.5 million in 1969, representing an av-erage of 8U.6 percer,t of all Cer,tral Goverr,uent exper,diture over hthi, period (see Table 15).
2.47 The past heavy expenditure reflects the social and political impor- t-ance oil thL-e agricultural sector J;; th&Ae 'sxtes. hruh tsorenato towards the under-privileged peasant population it fulfilled an important social f'unction, bu, the purely ecunomc impact 01 Lt1S level of pubilic ex- penditure was less impressive. Efforts to increase agricultural exports had little success, and production of coffee and cocoa in particular showed little - 12 -
res nofLee to guaranteedaA npriace, export subsid4ieacmand exrt no Ira read4t mroan,.oma While the quantitative achievements of the agrarian reform program appear impressive, the new farm units were not generally established on an econom4i- ally viable base and real improvements in living standards and productivity were slight. The growth in agiri culltura1 npnd,,ct-4or w.d oased la oar expansion of land under cultivation, and on increases in material inputs heavily concentrrated on a few crops. By putting he eam.phasis on non-recover- able expenditures such as subsidized credit rates and price support programs, recent governm,ent policy ha raiLseAd production but has m.ade a 'large proportior. of farms economically dependent on direct government assistance. Even if such
ba5sj3L0.k1L:: X:> \U1.;LU:gfL t:U t:J1LLL4.SL.Lb4y J U;0-L.LL.L.U. LI VCLLC: WlL .&:- national price and cost comparisons at prevailing exchange rates do not refLect the true reLat.Lve effic.ency of the sectors [empALoUyiLnLr a. La.lge part of the labor force, it is a policy whose fiscal implications that have not yet been fully faced.
III. CURRENT POLICY ISSUES
3.0i Ine success - albeit limitea - of past policy in stimulating agri- cultural production was largely due to the potential demand that existed in a domestic market accustomed to a high level of food imports, and to the large public expenditure that the Government could devote to the agricultural sector. A continuation of this policy, however, is likely to be difficult in the future because (i) the scope for import substitution is now consider- ably reduced, and (ii) the slower prospective growth of government revenues will make a continued expansion of public expenditure at past rates increas- ingly onerous. The transfer of funds from the Central Government to the agricultural sector in the 1970 budget is already 17 percent lower than in 1969.
3.02 Because of the active role of the public sector in agriculture over the past decade, an evaluation of agricultural prospects in Venezuela is difficult in the absence of a clear statement of government policy on this sector. Production of many individual commodities is closely tied to public programs, and thus their future is largely dependent on the outcome of present discussions in the Government regarding the level and composition of public investment. It is clear, however, that some changes in government policy will be necessary.
3.03 As a result of the factors described above, public credit programs have been a major element in the failure of past government policy to achieve significant improvements in efficiency of farm production. Especially among small farmers, loans have been given without sufficient planning and farmers have incurred debts they cannot repay. There is little joint action between BAP and the extension service of MAC, with the result that most farmers do - :L3 -
.ot receiLve the tecLIlicadl ssistance LeededU to ernsure effcLient utilizatiLLl of loans. In addition, many of the loan programs have been influenced by non- technical Lactors, especially regional anrd other political consideration:3, with a furt'her reduction in the effectiveness of the program.
3.04 With the formation of the BDA, there is an opportunity for a major improvement in the public credit programs in agriculture. Moreover, the preparation of credit programs to be financed by the IDB (PRIDA, through BAP) and the IBRD (Livestock Development Project, through BDA) should improve the quality as well as the volume of agricultural credit. To ensure that full advantage is taken of these opportunities, it is necessary thai: the Venezuelan Government should take action to: (i) ensure a supply of i-unds for the BDA - this should be sufficient to at least maintain the level of lending to the commercial sector at the 1969 level of Bs. 112 million annually; (ii) clarify the respective roles ot the B3AP and BDA, especially with respect to interest rates and responsibility for medium farmers; (iii) expedite proposed legislation for the establishment of a marketing institute to take over price support programs currently handled by BAP; (iv) revise the firaia- cial structure of BAY with a view to writing off bad debts; (v) take steps to ensure better preparation and closer supervision of BAP loans, both by increasing BAP's ownL technical department and by cooperating with the ext:en- sion division of MAC; and (vi) expand BAP's program for lending to coopera-- tives and borrowers' unions.
3.05 A realistic assessment of the prospects for expansion of cereal. production cannot be made until the Government's policy, currently under review, is known. The three major cereals (rice, maize and wheat) are all subject to government price and marketing control. To reduce rice imports, a minimum on-farm price for rice was set at Bs. 0.60 per kilogram in 1959. In response to this and other government efforts to stimulate production, output grew at an average rate of nearly 16 percent between 1960 and 1969 (see Table 2). Self-sufficiency was achieved by 1964 and exports began in 1965, but owing to the high price paid to the producers, surplus production could only be exported at a loss. By holding out for higher prices, the Government has not been able to dispose of the surplus, with the result that at the end of 1969 BAP held stocks of rice estimated. at 220,000 tons.
3.06 At the same time as surplus rice production has been accumulating, imports of wheat have risen greatly (see Table 4). This increase is due at least in part to the subsidy paid to wheat importers by the Government, to ensure a cheap supply of a staple food. Until 1970, this subsidy, paid in the form of a preferential exchange rate, also applied to wheat for animal feed manufacture. Even with this change, the Venezuelan Government is at present subsidizing the production of rice on the one hand and the consump- tion of wheat on the other, with the result that both wheat imports and surplus rice production are increas:ing rapidly.
3.07 The third major cereal, maize, has also been the object of govern- ment efforts to increase output. Inflexibility of production has led to less success, however, and maize imports continue despite price support and other government nrograms. - 14 -
3.08 The country is faced with immediate problems of (i) how to dispose of the existing stocks of rice and (ii) how to provide the animal feed industry with an alternative to imported wheat, which accordinR to the manu- facturers, cannot now be used without passing on to the consumer the 30 percent price increase resulting from the loss of the preferential exchange rate for feed wheat imports.
3.09 The Government intends to find this solution by: (i) selling present stocks of rice to the feed industry, presumably with the Government bearing the considerable financial loss involved (rice, purchased by BAP at BR. 600 ner ton. will have to be sold at Bs. 300-350 ner ton to com ete with imported wheat); (ii) rationalizing future rice production by introduc- ing high-yielding low-nqnlity Philippine VaF1it-ies fnr aqle t-n t-he fond industry; by gradually lowering the price paid to the producer and so squeezing marginal producers on unsu it-able1 land intn nt-her fnr.mQ nf e-iult-iuv- tion; and by increasing the use of rice in bread manufacture; (iii) making greater efforts to raise prodctiodn of n7- anA (4,Y 4n cin tha cultivation of grain sorghum.
3.10 While this policy seems to be realistic, it has not yet been m.plemented. Prompt action by the Government is impeded by the high cost of disposing of the existing rice surplus and by its obligations towards the agrarian reform. settlements which suppl- nne y- ,lf -f nat-ional rie prod,uc- tion, for although much rice is currently grown on land unsuited to this crop, other areas of r i ce cultivation Iave no alternative use. A further factor is the resistance of the feed industry to raw material price would- AAtLCCOincreases C-. WLI.LLILwhcZ.,I. WIULU LUUL-Ureduce- A.L.Zit4- J9LJLUI-.L-iois
J. C.L.lereaLs occupy '43 percent olfUthlle total croppedU area in Lihe country, and unless a cereal policy is established which continues to prov'.deprov.Lutdli an ±LILLIL.LVtJncentive ICrLL ±LIL;Lncesn Z-Clb.LiL6 CdbaD W--L±±CZwel as rainlznLdL.LUiIdL.LZiALL6- ---- 1 -- 4 PLJOUU-L..LUlLIproduction,--- ..-. -- difficulties for peasant as well as commercial agriculture can be foreseen. It is urgent, therefore, that the Govern[ient tLake steps to iL!plemllent the policy changes currently under discussion.
3.12 Government efforts to expand the domestic supply of animal protein have been concentrated on cattle production, both intensive, in the mountain valleys and south Zulia, and extensive, in the Llanos and eastern regions of the country. Tnese efforts have consisted partly of increasing direct government assistance to the livestock sector in the form of veterinary services, artificial insemination, the raising of breeding stock and the construction of slaughter houses, but mostly by expanding the supply of sub- sidized loans through the Livestock Development Plan (Plan de Fomento Pecuario).
3.13 The Livestock Development Plan was introduced in 1958 with authorization to spend Bs. 650 million over five years, but distribution of this amount was not completed until 1970. Although the Plan was intended to be used as a rotating fund for loans to the livestock sector, a certain - 15 -
amount was used on promotion, emergency measures and other non-recuperable items, with the result that only Bs. 450 million had been used for loans by the end of 1969. This amount, however, comprises approximately half the total public sector credit available for livestock (see Table 9). The conditions of the loans are concessional (repayable over 16 years at 4-6 percent interest with four years' grace) and the rate of repayment has been poor (total collections in 1969 from Plan loans was only Bs. 17.6 million), with the result that a true rotating fund has not been established. Although collections are in the charge of BAP, the loan program and supervision is handled by MAC.
3.14 However, despite the Government expenditure in livestock develop- ment over the past decade (through the veterinary division of MAC. the subsidies for milk production administered by the Ministry of Development, and the financing of new slaughter houses by the Venezuelan Development Corporation, as well as the Livestock Development Plan), the progress achieved should not be exa22erated. Milk nroduction grew at an average annual rate of 6.4 percent between 1960 and 1969, while beef grew at 5.L nereent (i1E the large increase in 1969 is discounted). While these growth rates are satisfactory in relation to the agricultural sector as a whole, they are i,.qdeniqmte (especially for heef) whhen compared to the size nf the problem. For per capita consumption of meat in Venezuela is low (about 22 kilogramn annua:ly, compared to averages of 26.1 kilogramsa in rentra:l America and the Caribbean and 74.9 kilograms in North America), and, although offic-i4al statistics suggest that Venezuela is self-sufficient -In red meat, there is a constant trade of contraband cattle from Colombia, - t4-m.. A at bet een 200,000 and 30,00nn head annualy1 1-. I/ sti4 e 0 he cattle population in Venezuela show an increase of about one percent amnually
overLIVC the past6kJW decae , sugstn 0-LL*5,,,r#- -- that4llA -fl5 muchiLUU1-* ofteiceseiL'.l - - - - -OO- - 4 L uptiLLJJLL derived from Colombian cattle.
3.15 The states of Apure, Guarico and Zulia together account for about 1alf:of~ thetotl catepplto. A-- -an Guarico hv-- large breedi.; herds extensively I-aised on natural pasture, while Zulia is the main dairy regLion andU possesses more than one-quarter of tLh countr-U;' improvd1 pastures. In these, as in other regions, there has been little change in production techLnoLLa±gy iLn recent years, andU most farLLs contLinue to bLUe managed in the traditional manner. Productivity is generally low and the levels of pasture and herd ULurtngement are primiti.Lve.
3.16 Venezuela possesses the physical resources for greatly increased levels of beef and dairy production. For this expansion in output to be achieved, however, it will be necessary for the Government to correct the following deficiencies in the existing system:
1/ No data exist on this trade, but Venezuelan estimates fall in this range; in Colombia, however, estimates range between 50,000 and 100,000 head annually. - 16 -
(i) One obstacle to livestock development is the monopolistic marketing system. Government efforts to break it by the construction of new slaughterhouses have succeeded only in strengthening the intermediaries, who exert a strong hold over marketing by purchasing from ranchers who have to sell as the dry season begins, and by selling to slaughterhouses who have little working capital. The Government should consider imnosinQ and enforcing nrice differentials and stricter sanitary regulations, to change this systpom
(ii) The basic nrohlpm in the livestnck scptnr, however. continues be its very low productivity. Only with its veterinary servZices has the avrnment madea significant contribution to livestock development in the past, and it is essential that a similar emphasis within MAC now be given to technical assistance and applied research in pasture management, nutri- tion, and breeding programs.
(444) A t4-4ir ch-ge needed in government poli4y on livestock is in the credit programs. The Livestock Development Dian is du-e t-o end thi-s year, anA it- is essential that J. UOL .L UU . L%J CL t.I UL ~ a Lt L O ~ aLL a. ~LLa it be replaced with a program better suited to the needs of the sector. The creation of the BDA and its etyio livestock financing provides an opportunity to set up a
prograr.L t hatLIL~LLLLJLU~.LyJJLkUV±LU= notL or,ly proide logt1,-LV t6IL-= L LLL %-LLV_U±Lrei LUUL_ utasaCJLMU includes farm planning and close supervision to ensure that the loans are proper'ly utilized. 'I' this approach pro-ves successful, steps might be taken to introduce a similar program-i 101 si±maler LardLiers.
3.17 Public expenditure on irrigation and drainage rose from Bs. 61.9 million in 1960 to Bs. 226.2 million in 1969 (see Table 16). The increase in investment in this field in tne past decade nas not, nowever, been matcned by similar increases in families settled or land brought into production. instead, there has been a considerable lag between construction ana production, partly because of the time needed for construction, but more especially be- cause of the failure of the agricultural agencies to exploit the land already opened. In addition, the location and design of certain works, based on engineering considerations, was such that the land opened is of relatively low agricultural value. For these reasons, as well as those of financial limitations, it may be preferable to reduce government expenditure on new projects in the next few years and instead to place greater emphasis on the completion of existing works.
3.18 The Commission for Hydraulic Resource Exploitation (COPLANARH) has been established to plan the nation's long-term water development program based on projections of industrial, domestic and agricultural demand to the year 2000. Given the limited water resources in the heavily populated mountain and piedmont regions, such long-term planning is of great importance. However, with the decreasing economic and social importance of agriculture, it will become necessary to give priority to investment in - 17 - projects supplying water for domestic and industrial use and reduce the large share of such investment that agriculture has received in recent years. For this reason, a mnuch more careful selection of agricultural projects will be necessary in the future, which would involve a critical review of the criteria currently used in project selection.
3.19 Prospects for significant increases in the traditional agriculitur- al export commodities are not good. Despite government credit programs and export subsidies, coffee production has remained static in recent years and growing domestic consumption has reduced the surplus available for export. Most coffee is grown on small farms on poor soils in the mountaLns, under primitive technological and managerial conditions. Despite guaranteed prices, very low productivity (yields average about 180 kilograms per hectare) results in poor proEits. For many years, Venezuela has been unable to flll her export quota of 28,000 tons, and prospects are poor for future increases in either production or exports.
3.20 Despite the heavy fall in world prices in recent months, the prospects for cocoa exports are a little better. Long-term world demand appears good, and Venezuela has the! physical resources to expand production. Hlowever, the profit offered by cocoa production has been insufficient to attract investment or stimulate a significant increase in output in recent years. Export subsidies have amounted to nearly Bs. 50 million over the past five years, representing approximately 38 percent of the FOB value. Despite the minimum price guaranteed to exporters, however, the average price received by farmers has fallen by 13 percent over the past five years.
3.21 Production of sugarcane has grown at an average annual rate of more than 9 percent since 1960, due largely to a continuation of the heavy public and private investment begun in the 1950's. Additional factors are the low cost financing providedl by the CVF to the public sugar mills (loans worth Bs. 85 million were conceded over 1964-1968), and the closed high-price domestic market in which sugar is sold by the jointly owned Venezuelan Sugar Distributors (DIVENAZ). While productivity varies greatly, much production is inefficient, especially in the State enterprises where substantial surplus labor is employed. When production exceeds domestic demand, the surplus is sold to the U.S. preferential market where prices are lower than in Venezuela. Venezuela holds only a small quota (18,000 tons) in this market, and considerable efforts are being made to get this quota raised when the Sugar Agreement is reviewed in 1971. The prospects for increased exports of sugar in the future will depend on the success of these efforts; ac well as on the growth of the more nrofitable domestic market.
3.22 Exports of rice have increased rapidly in the past five years, reflecrting thp rnnsiderabhle growth in nrnductinn of this rereal. All rice is purchased and distributed by the BAP, and the surplus is exported either s npaddv nr nnlishpei rirpe Althniioh thp lnnQ-cyrainpei variptisQ grown in Venezuela are of high quality, the cost to BAP - including handling, storage and processing costs - is considerably above world market prices. Each contract is negotiated separately and prices differ, but the price received - 18 -
for exports has averaged only about 50 percent of cost over the past three years. In trying to cut this loss, BAP has accumulated stocks of rice which reached 220,000 tons by the end of 1969.
3.23 The prospects for rice exports in the future are largely dependent on government policy on cereal prices. Given the present levels of produc- tion and stocks, further exports will be inevitable. Because of the finan- cial loss involved, however, the Government is searching for ways of dispos- ing of existing stocks domestically and of reducing the level of high-cost production. If policies in this field are successful, both production and costs will be reduced, with the result that the exportable surplus will fall but that costs will approach world prices. Therefore, while rice exports can be expected to continue in the next few years, the long-term export prospects for this crop are not good, unless a long-term export subsidy program is adopted as part of a general strategy. But to provide subsidies to agricultural commodities in amounts that will provide sufficient incentives to producers to increase exports appreciably, may require revenue measures well in excess of those the Government is prepared to take. 1/
3.24 However, there is potential for a diversification of exports by establishing production of high-value commodities with a specialized market. In this field, advantage can be taken of the well-developed infrastructure, skills and capital available in Venezuela. In the immediate future the best prospects are offered by winter vegetables and tropical fruits for the Caribbean, Eastern U.S. and even European markets. Production of these products, including melons, tomatoes, peppers, cucumbers, mangos, avocados and citrus, depends partly on suitable climate, soils and geographic location, which Venezuela shares with most of Central America and the Caribbean, but also on technical and managerial ability to ensure good quality products, correct timing and effective marketing. While these skills are not widely found in agriculture in Venezuela, they are available in the manufacturing sector, as illustrated by the recent establishment of small-scale production and export of melons, tomatoes and grapefruit by a few private companies. The development of these commodities could be the first step in establishing a large-scale export trade in high-value and processed foods. The climatic variations and good road system of Venezuela will allow commercial production of high quality agricultural products to be oriented towards supplying the industrial demands of the urban core centered on Caracas.
3.25 Although currently insiznificant in value, winter vegetables are one of the better potential growth sectors in Venezuelan agriculture. To fril1itnte dvulnopment in this field; government nolicv should be directed at complementing rather than competing with private enterprise. More specific- ally, the Governmenr couild: (i expand its extension services for these rom- modities on a regional basis; (ii) establish quality and health standards for all export produce; (iii) provide, thrniigh the u-se nf consultants , an effec- tive market advisory service; (iv) use diplomatic stations overseas to 'push' Ven.eZuela-n produce;, and (v) a 14 h n ff t; cnilreo nf onmmerc4i ml credit, both short and long-term, for manufacturers involved in the process- ing of agricultural commoditiers.
1/ See Main Report, Chapter V. - 19 -
IV. OUTLOOK
A. Prospects for Agricultural Development
4.01 Economically, Venezuela is no longer an agrarian nation. Even if petroleum expansion is slower than in the past, the contribution of agricul- ture to GDIP is unlikely to exceed its recent level of 6-7 percent in theb foreseeable future.. Agricultural exports are unlikely to grow more rapidly than the recent historical rate of 6 percent annually. The share of agricul- tural products in t:otal imports can be expected to fall, but the overall. effect of t:his sect:or on the balance of payments will continue to be insig- nificant.
4.02 kgriculture, therefore, cannot be expected to play the mnain role in Venezuela's future economic development. However, its social importance, through its effect on employment and regional development, will still be considerab:Le for some time to come. This sector continues to employ a large proportion of the labor force, although this employment will fall in coming years, both relatively and absolutely, as migration to the cities continues. As the rural and agriculturaL population declines, so will l:he influence of agriculture on national emp'Loyment and regional development. And there are no indications that the movement of population from the country to the towns and from agriculture to other forms of employment will cease or even slow down soon.
4.03 Further movement out of agricuLture will ease the pressure on land and should reduce the need to provide education and services to a dispersed population.. In the medium term, the food requirements of the nat:ion can be met with the present land area and a reduced rural population, and there is no econonic lustification for large-scale efforts to expand the cultiLvated area.
4.04 The role of agriculture in the national economy thus can change over the next 2eneration from one of nredominantlv social imnortance to one of commerc:Lal production of selected commodities. In the shorter term, deliberate nolicies5 could facilitate this change by gradually establish:ing a sound economic base for commercial agricultural production while at the same time paying attention to the continuing social needs of the sector. Coinmer- cial production should be aimed at meeting the food needs of the population, supnlvying i:he raw m2teria1s nppdpe by dmnne6tiicf industry and ostab1iqhinS) export-oriented production of those commodities - primary and processed - in whilh UVnPeuila can draw nn itq natirn1 and rniiirri advantagpes
4 .05 For the present, however, the imain orientatinn nf government policy cannot become oblivious to the social aspects of agriculture. Although the best :long-term prospects for much of the existing agricultural population may be outside this sector, the Government has accepted in thAe p as t = afnlAd is s'141-k- toW- cotiu to 4-nu - 20 - obligations to this underprivileged part of the population. There is a need, nevertheless, for future agricultural policy to differentiate between development and social programs. At the same time, restricted financial resources in the public sector are likely to restrain the overall levell of public expenditure in agriculture.
4.06 Despite the fact that it has been in power for more than a year, the present Governm.ent has not yet* f .ltated its agri.ultural .liLy in detail. However, the outlines of a general agricultural strategy, under consiAerat.ion 4n r.nIP,TDTAT MAr and other ariculturall agenc-ies, suggest that the Government is preparing to adopt a realistic long-term development poli.yj.J.cLy inLIn agrculture.agL.L LU.LU
4.0.n 7 Inr'n.cipal ar.,ong 'ts o"Jectives 's to break out of the restrictiorLs '4.0 I L7 L L LLd dlU L~d ±L j J.Jb L UL rN U L U 1L~ ~L LLUI of the domestic market by developing selected commodities on an export- oriented basis. Similarly, Government intentions to separate more clearly social and commercial activities are reflected in the establishment of the BDA and the proposal for a Marketing Institute. llIe Go-vernruent has announced its commitment to greater encouragement of private enterprise in agricu'Lture, and is reviewiL1g many of t[ basic policies Of its predecessors, including credit, pricing and export promotion programs.
4.08 CORDIPLAN has drawn up the following proposals as the basis for future agricultural policy:
(1) A continuing reduction in agricultural imports. To achieve this, imported commodities will be classified according to substitution possibilities, and government policy with respect to prices, and credit will be adjusted accordingly.
(ii) An expansion and diversification of exports, to be achieved by establishing commercial production of those commodities with export potential. lhe Government role is seen as providing technical assistance, credit and market guidance, and by applying quality and health standards.
(iii) Within the agrarian reform program, emphasis to be placed on providing land titles, consolidating existing settlements, raising technology and introducing processing industries. However, the Government still intends to resettle a further 115,000 families over the next five years.
(iv) A complete revision of the price support program, in order that it may function as an effective production incentive while taking full account of market limitations.
(v) The implementation of an Agricultural Marketing Program, to improve the transport, storage and sale of agricultural produce. - 21 -
(vi.) A continued emohasis on irrigation and reclamation projects to ensure the long-term expansion of agricultural production. Priority is to be given to small nroiectt and to the efficient exploitation of existing works.
(vii) Specific policy proposals include the substitution of iTmponrtedr feetl wheat ii-th maizea andr rice; inc-raeased imports of cattle breeding stock; expanded pig produc- tion; and an increased e oef fertilizr and mr seeds.
4.09 These proposals are consistent with the general strategy outlined above. Hiowever, the policy outline remains defective incertain respects. First it depends on a general expansion of agricultural production, without paying sufficient att n to the problem of mrkets. This is especiall- pronounced in the proposed cereal policy, which assumes that 100,000 tons oE rice will be absorbed by the national animal feed industry in 1970. Second, the Government maintains its emphasis on social obligations, and gives in-- sufficient pri4oritL4y t*o efforsts t.o raise productiV4ity. ll4.hird, andd most critically, the Government proposals are aimed at an average annual growth rate in agr4cultural prodIuction of 7.3 percent between 11970 anA 1974 com,pa;red taLc.5..1 6 L,...A.u.,a I juLI..4UIIIi .2jCLC.LULCJULaUaUu 47.1~ LUIjfLC to 5.1 percent between 1960 and 1969. At the same time, the fixed public in.1kvemCO LIIICUin ALL LLL.LOthis periodjJS is estimated at B.. ,8.5 million c..pare'C o Bs. 1,582 mi:Llion in the period 1965-69. This implies a capital: output rti.o of 4.0A comr.p aredC to 6v.9 be twe en 1960f- an' 1969fn. ELven wi th `nvestment LfL t t. U ~ILf U L UC WC LL 7 VWU' fLU .LU7 * LVL iL LV~LI at the estimated level, which still appears a little optimistic, production targets wiL'l probably Lhave to ue reuuceud T[1ere 'Ls little reason Lt,o expect private investment in agriculture to grow more rapidly than in the past, and .LLscal constraintid may requxire a reuucLon[L n thel pubiLc secLor. ntence a growth rate of 4-5 percent would seem more likely to be attainable.
B. Public l:nvestment Program, 1970-74
4.10 In its draft Fourth National Plan, CORDIPLAN offers a detailed critique of the performance or tne agricultural sector since i9ou ana sugges- tion for policy changes necessary to overcome obstacles and ensure future growth. The major development project proposed in agriculture is an Integrated Agricultural Development Project (PRIDA), costing Bs. 816 million over four years and financed in part by a loan from the Inter-American Development Bank. Other projects include land reclamat:Lon in the Orinoco Delta and south of Lake Maracaibo in Zulia; an integrated development program in tne high western Llanos; a marketing program; livestock development and credit programs in cooperation with FAO and the IBRD; and a fishery development program with FAQ. These and other projects are discussed in the Appendix.
4.11 Total public fixed investment in agriculture between 1970 and 1974 is projected by CORDIPLAN at Bs. 1,805 million, compared with original aggreg- ated budget requests of the agricultural agencies totalling Bs. 1,637 million. The mission has drawn up alternative estimates of public expenditure in agri- culture during the period 1970-74 to reflect more adequately the severe fiscal - 22 -
constraints in prospncct ove the nevt fewt yarsc. Thes estimanteaen ba snaed on maintaining the investment program at its 1967-68 level, except for specific projects for 4.1hi4h fnore4n finnrincy icslite1lx The reult- ives an crease in overall expenditure of 2.0 percent annually, compared to an increase of 10.1 percent required4if the budget requsts were met in f An even smaller investment program may be necessary if measures to increase public revenue are not i...plemented.
PUBLICTTM EXPENDITURE ARIULTTTT TTUP
(millions of bolivares)
Fixed TLota'l Current Capital ILnvest,uent
Actual expenditure, 1965-69 6,304.2 1,889.4 4,414.7 1,582.4
Budget requests, 1970-74 10,705.2 2,104.0 8,601.2 2,636.8
CORDIPLAN projections, 1970-74 n.a. n.a. n.a. 1,805.1
Mission estimate, 1970-74 7,808.8 2,411.8 5,397.0 1,662.1
4.12 These estimates of future expenditure are necessarily approximate and somewhat arbitrary. In making them, account has been taken of (i) the general policy statements of the Government; (ii) past trends in expenditure and program expansion by the different agencies; and (iii) the mission's conclusions regarding priorities within the agricultural sector. The only major increases in expenditure projected are for the PRIDA and Animal Health Proiects. Maior cuts have been made in the budget requests of MOP for irrigation and reclamation projects, and of IAN for the land settlement and consolidation programs. Lesser cuts have been proiected for BAP and special credit programs, price support programs, and expenditure on feeder roads and installations by MAC. With the excention of irrigation nroiects; however, no absolute reduction in recent levels of capital expenditure is
4.13 The Ministry of Agriculture (MAC) i4 responsible for nlanning and coordination as well as providing extension and research services, all of which havem beoen imnpnrtant onnstraints to agricuiltuiirai devPlonpment in the past. In addition, MAC controls forest and fishery exploitation, in both of ulhich mao4r po4eats n-ar plannoAe 4n t-he, near fuituire (sae Apndc"AiA A), and expansion of the Ministry's services and facilities should be given 4 4 ror 4i t. n 4 . In..._Tn Fh mis i on eo F 4im to hnowevor expndAi4 F.re by MAC is projected to grow at less than one percent annually to reach Bs. 252 ion .n 1974. It shlouldA be nomted- that a sh-ort-age of qualified staff 4s 4. any case a limiting factor in the Ministry's work, and MAC's share in the FRIDA prograrl .l.l plac an additional b.urdlen on thes resou- -ces. - 23 -
4.14 As outlined in footnote 2 to Table 18, it has been assumed thar expenditure by the lMinistry of Public Works (MOP) will be restricted to irrigation and reclamation projects already under way. This restriction is iustified by the heavy investment in agriculture that has been made by MOP in recent years, and by the considerable area of land with completed infrastructulre which has not vet been brought into productlon. Future emphasis should be placed on the exploitation of existing projects before new ones are un.iertaken, and the nartirinat-ion of MOP in the PRTT)A nrogram is: directed at this objective. The investment program for MOP assumes a decline to Bs. 119 million in 1974.
4L 1 The AgrlI culture and TAivestacke R nnL (BRAP) ia tea 1 nlrgest an, moc t complex agricultural agency but, because of the inefficiency and high cost of its operations, it i8 noaumed that less emphasis will be placed onBAP in the future. This is supported by government statements, by the 1970 budget proposals, and by the establishment of the new Agricultur,al Develop- ment Bank (BDA). It has been assumed that BAP's loan portfolio for commer-
cia_.. a. famr.La,b JI-;L tO W~.Jw7;i1l JL beLV; trasereL.v C57, t L . CL L.L1__o tAI1h. AJAJJBDA/ , WLfRA-l l.LL IZAgsJ i :JflJC peasantJ ao OtL. * fa-nerO v . ILI .|fS program will be continued. The purchase of agricultural produce is projected to grow at. the hListorical rate. Expanslon of peasant farm.er loans an' r.ew warehouse construction has been restricted to the PRIDA program. Annual expenditure on credit program,s 's projected atL Bs. 12,1 r,,llion whl1 net CX~LLU.Lu ~ LL L UJ.L 1 jJ aI-±~j J. ~ Ud D Ldl.L MiIL.LL.A.Jon, whii±±e inLvest ment in inventories is assumed to grow more slowly than in the past, to BJs.13 * 208oLLJ)r m'l.l.iAonI IJ..L.UI inI A7197.Q7I '. 4.16 lxe BD 's assu-umed to tak-e over the corm-iercJa'l loan portfol'o '4* LU e.1 'DuiJa L. UIIUU LdK VLI JL LLU.LLI~iIL~(ZLL.UL from BAP, to which has been added the proposed Livestock Development Project Ue.LIg prepared Lor D03RD cousideration. Ine Special Programs - CredLi programs using earmarked funds from MAC - are projected to continue at a constant but considerably reduced level of Bs. 50.1 million annually. Tne overall availability of credit (BAP, BDA, PRIDA and Special Programs) there- fore is projected to grow from Bs. 307.5 million in 1969 to Bs. 322.7 million in 1974. Th:Ls contrasts with aggregate budget requests of Bs. 777.3 mill:Lon for i974.
4.17 The Government intends to continue to give high priority to the programs of the National Agrarian Institute (IAN), to the extent that reset- tiement of a further ii5,000 families is planned by 1974. In light of the high cost of such a program, the unsatisfactory state of existing settlements and the financial problems facing the Government, it would appear to be more realistic to concentrate expenditure on the consolidation of existing settle- ments rather than the creation of new ones. The PRIDA program is directed to this objective, and future expansion of IAN's activities should be largely limited to it. The principal advantage of redistributing more land and settling new families within the Agrarian Reform Program is that the major expense involved - compensation for the land - is met largely by the issue of agrarian bonds. It is simpler for IAN to obtain authorization to issue bonds than it is to gain the larger direct budgetary transfer that would be necessary for a greatly enlarged program of consolidation. It is therefore necessary for the Government to consider very critically the justification for further issues. In the mission estimates, total expenditure by IAN is projected to grow at 1.0 percent annually to Bs. 260.7 million in 1974. - 24 -
4.18 The remaining category of public expenditure in agriculture is the Special Proiects. The largest of these is PRIDA (see Table 19 and 20 and Appendix), which is well suited to the needs of the agricultural sector and is receiving full support from the Government. It is assumed that expen- diture will begin during the second half of 1970. A second project using an IDB loan is the Animal Health Proiect. Because of the need to coordinate action with a similar project in Colombia, expenditure on this project will not begin before 1971. APPENDIX A
Agricultural Projects
A. PRIDA
1. The Integral Agricultural Development Program is a large-scale attempt by the Inter-american Development Bank to improve the technicaL and socio-economic levels of development in agrarian reform settlements. Thle project will work in 111 existing settlements in the Andean, Central, West- Central and North--Eastern regions.
2. The project will consist of eight sub-programs, concerned with consolidation worlks, credit programs, research, extension, the construction of silos, irrigation works, feeder roads and training of personnel (See Tables 21 and 22). The principal crops benefitted will be sesame, cotton, maize, potato, plantain, tomato and cassava. The project will be controlled at both national and regional levels by coordination committees, but the principal executing agencies will be the Ministries of Agriculture and Breeding (MAC) and of Public Works (MOP), the Agriculture and Livestocik Bank (BAP), the National Agrarian Institute (IAN) and the Foundation for Training and Applied Research in the Agrarian Reform (CIARA).
3. The proposed expenditure and financing is summarized in Tables 20 and 21. Of the total expenditure of Bs. 816 million, about 41 percent is to be provided by the IDB, in the form of a US$75 million loan disbursed over four years. The program. as originally planned pro4ected expenditure to begin in :L970 and in 1973. Because of delays in negotiating the loan and establish:Lng the coordinating agency, however, it seems unlikely that dis- bursement will begin before 1971.
B. Livestock Development Project
4. This project would consist of a credit program administered by the new Agricultur-al Development Bank (BDA) to provide short- and long-term loans to 'Large livestock farmers at commnercial interest rates. The principal obiprtivupc of this nronipt- will be to (i) stim-u,1ate an ePnqnqion in cat:tlp breeding in Venezuela; (ii) introduce for the first time a supply of long-term crpdit to large farmers at commercial rates; and (iii) us-p thp nro4eet aS a means of establishing the BDA on a sound banking basis.
5. The project will finance beef breeding on 450 farms situated throughout: the mna4or livestock areva bui,t w4ll be oncent-rted 4n the !.lanos of Apure, Barinas and the adjoining piedmont zone, and the eastern region. Approximately 0nnfarms T. 11 A.,,plnn fat-ttnin± nna-ot4nno 4n ncAA4t4_n t:n an expansion of breeding activities. Total project cost will be approximately US$28'1Q mil1ion, with 30 -ercentforeign exchanmr.g r..ponent, and disbursement will be spread over six years. At maturity, estimated annual production increases from the proJect will be approximately 25,000 heifers available for slaughter, representing 14 percent of national production. Interest rates to thIIe far,er w.1il be. att 9 percent, withl repaym.ent over 8=U10Tyears 0-4 after years of grace. APPENDIX A - Page 2
C. Orinoco Delta Project
6. This project has been examined by an FAO-IBRD Cooperative Program identification mission recently returned. Despite the active interest of the Venezuelan Guayana Corporation (CVG) in this area, and although flood control works are under construction, the potential for the region appears to be severely limited by (i) tihe possibly wide-spread occurrence of acid sulphate soils, unsuitable for intensive agriculture; and (ii) the active government discouragement of the cultivation of rice, the crop best suited to this area, because of a continuing national rice production surplus.
7. A better understanding of soil potential will be given by the completion of a survey currently being made, while the market prospects for this region must wait on a clear definition of future rice policy by the Government. At the present time, however, development potential appears to be limited to Guara Island, which has soils distinctly superior to the surrounding area. To develop this island, farms could be established on about 11,000 of the total 23,000 hectares. Total cost would be approximately Bs 31.5 million (US$7 million), with a foreign exchange component of 25 per- cent.
D. South of Lake Maracaibo Proiect
8. This large-scale land reclamation and development proiect in- corporates 500,000 hectares south of Lake Maracaibo in south-west Zulia. Work began in the early 1960's, and prior to 1970 nearly Bs. 125 million had been invested in infrastructure alone. The Ministry of Public Works plants to invest a further Bs. 173 million in this project by 1974. The region is one of highly-productive soils, currently used for plantains, cocoa and dairv farming hblt limited hb noor drainage and freatoent flooding. The project consists of constructing levees along the principal rivers, draining th nrntprotpd lInd- and developing farms. The extension contemnlateci would cost approximately US$19 million, with perhaps 50 percent in foreign exchange.
E. Bocono - Tucupide Project
9. This project involves the construction of on-farm improvements on 30,000 hectares in the piedmont region of Barinas and Guarco states*. Pro- duction would be based on dry-farming, but would be oriented towards the provision of irrig4atio in the future. WIorks would include feeder roads, drainage, land cleaning, electrification and housing.
10. The total cost of this project is estimated at US$27 million, of which thC'Ieloreign exclange comuponent would be 42 perent tobdsure WkLI.. Li LIL& A. A L~i~ JLkPU~A. A. L IU~1 U=L ~ t , t.6) LJ~ .1A.UU Uk over a five-year period. The executing agency would be MOP in conjunction wL. I ".1.
r. Other Irrigation Projects 1;. Ine Miisr ofPulc Work-s proposes to start construction onL ten Jte new irigsati ond rubli w prjet betwen1 a 4in U. other new irrigation and reclamation projects between 1970 and 1974, costing APPENDIX A - page 3 a total of Bs 380 mnillion. In view of the present fiscal problems facing the Government, it is not clear that construction on these new projects can be started within the next five years.
G. Animal Health Project
12. This project forms part of a program sponsored by the Inter- american Development Bank (IDB) to control foot-and-mouth and Brucellosi.s diseases throughout South America. The program, which will be implement:ed by the veterinary division of MAC, is expected to last four years and to cost Bs. 865.1 million (US$19.1 million), of which Bs. 22.5 million (US$5 mil- lion) would be in ithe form of a loan from the IDB. Although the prograrl was intended to start in 1970, it seems unlikely that much expenditure will be incurred before 1971.
H. Dairy and Beef Productivity Prolect
13. rhis project, executed by the Food and Agriculture Organization (FAO) in conjunction with MAC, is part of the United Nations Development: Program in Venezuela. Beeun in 1969, it is to extend over five years and to cost Bs. 31.9 million (US$7.1 million) of which Bs. 6.1 million (US$tL.4 million) is provided by the UNDP (speciaL fund).
14. Centered in San Cristobal but concentrating its efforts in Ba-rinas State, this project is intended to provide ground work and basic information on which a largp-scale program to raise Livestock nrodiirtivitv can he hbiilt. It incorporates training of local technicians as well as detailed studies of a scmnle orf 14iupatrrk ranc-hpq in diffprpnt, nprts of the rcontry. After its first year of operation, however, this project has encountered organizat:ional nronhlamc thf:At mAv r1ol2v Itc romnletlon
J. Fores!try Po.r':t-
15. The rTcent1v-romn1atad rmnP-FAO pre-invesrmaent ourveyn0! forac;r-r development in the Guayana region has awakened government interest in ex- nonnldl nn.o A o nfl 4 ito thoa4 not4 ,t%n Q fnract- ri, vaar orT.Tlhi4 1 a tha r-rvuorn- ment has established forest reserves in several parts of the country, the main e-.hasis is be!in- directed at the Gua,yana region, especially t-hek north- east section where the UNDP report was concentrated and where the feasibility studies hav,e been mande of pulp and paper pro-4ets
16.LflCpi:al. Thet%. p, i.Cs a com.b.biJe Julp/per/ti.g' L.ber/plw' o forest management project proposed by C.A. Pulpa Guayana, a consortium com.r.ise A of the G;;Uayana Corporation. (CVG-) wi4. AO peren hoIlding, anA thLe three principal pulp and paper companies in the country (MAMPA, VENEPAL, and Cartones 'N<;cionales;) w4+ith 20 percent each of the sares. T.l.e -ro-etwcIuld involve the integrated management and exploitation of 173,000 hectares of
LJJ'Cores, LO. east: vofJ E~ %ULLuCaCiuclad GayaUUCLyCLLO(, .LLLtL.LUAU.LL&r,nldn UCtLreforesta'tion L. L.L±UL Wi.Lt&-- `" %.C1LCaiben .LULJCLL&L j.1Ci.e which would ensure a supply of long-fibre timber in 15-20 years, in addition to the ample supply of short-fibre pulp now available from.. tropical hardw.iods. APPENDIX A - PaRe 4
17. The best site for construction of the mills would be along the Orinoco river, east of San Felix. The total proiect would require an esti- mated investment of US$70.1 million (Bs. 315 million), and construction would take three years. There appears to be an ample domestic market for short- fibre wood pulp, linerboard comigated medium, sawnwoods, veneers, and ply- wood. There are also good long-term nrosnects for develonine exports of short-fibre pulp and of highest-quality timber. When in full production, the nlant could save an estimated Bs. 63 million of foreign exchange an- nually, and would permanent employment for 1000 persons.
Size and Cost of Guayana Forest Project
Annual Investment CGnapaty UIS$ million
Fnrecst enploitantionnr. - 173-- ,n0 has.- - x(tntnl) -____1 _ _ 7 35-
Pulp and paper mill: 120,000 tons 55.00
Pl,wood and veneer plant: 12,250 cu. meters 4.00
1 rrm..T...... _ ..... _...... _. i 1 1 A il nnn . ccI 70
Total: US$70.1 mi llion Bs. 315 million
Source: ADELT AT;C7
1Q.*T_e project may gaet u,nder way wi±th1 IinthIe next few years. A first stage is likely to be a pulp and paper mill costing US$50 million, of which externaIlLI i LfinanLLinL wW-, IIlneed to be foundL f or abo-u US$3Od ,,M .1illon.
K. PFishing ProlCJettS
19 A fIishery rsarh adJ developTiient project 'Ls currentLy ur.der way, a UNDP-FAO team cooperating with the fishery division of MAC. The project, to last four years, concentrates on economic, statistical and technological studies, and will produce a recommended investment and development program to expand Venezuela's fishery sector. The total cost of the project is Bs. 24.2 million (US$5.4 million), of which Bs. 6.0 million (US$1.3 million) are being provided by the UNDP (Special Fund).
20. A number of fishery investment projects can be expected to arise from the UNDP program. The main emphasis will undoubtedly be to develop the considerable shrimp and other resources along the north-eastern shelf, especially in the Gulf of Paria, which are largely unexploited at the present. Projects in this area will be centered on the new part of Guiria that is nearing completion, both for coastal and deep-sea fishing. In addition, it seems likely that the UNDP program will recommend considerable APPVEIXTV A Pn--- of fishing boats (the existing fleet is small and inadequate for any significant expansion of productionJ. A pilot project has already been proposed to construct ten trawlers at a total cost of Bs. 1.9 million; (fl)/ S A 0 Llth- improvemenL A~-- andI I extenSion- - A --- of port facilities, especially of the1 - pro-- cessing industry, for freezing shrimps, canning sardines, tuna and other fisn, manufacturing fisnmeal, etc; and (iv) organizational and infra- structural improvements in the distributing of fish within the domestic marKet. APPENDIX B
St+istica,l Tables
Table No.
1 Value of Agricultural Production, 1960-69
A1- _. A __4 .. 1 4- .,1 r -4 - e4 . A .. ,,1 V 4 1 OAA_$. 1CeLJU± IJUUt Z6Lc1A_UU.L-aL VJJiZJLJ4u4~ A' VULLd- ~roc.Ga v.ioni 1 60-8 Estimated Production, 1969; Production Targets, 1970-74 3 s2Exportbs of Agric-ultural ProutLacts, 1 96 -68 4 Imports of Agricultural Products, 1964-68 Agricjl_ -ural *aLLiu Use aniu Terfure in 19 6 Distribution of Farms by Size in 1961 7 Land Redistributiorn under thie Agrarian Reformn Program, 19601968 8 Use of Inputs in Agriculture, 1960-68 9 Flow of Agricultural Credit, 1 960-69 10 BAP Credit Program, 1960-69 11 Economic Data on Farm Samples in Seven States, I Du6-6 12 Producer and Retail Prices of Key Agricultural Commodities 13 Harvested Area, 1960-1969 114 Construction Program in Irrigation and Reclamation Proposed by Ministry of Public WTorks, 1970-1974 15 Public Expenditure in Agriculture, 1960-1970 16 Public Expenditure in Agriculture, 19614-69, broken down by Agencies and Class of Expenditure 17 Budget Requests of Agricultural Agencies for 1970-74 18 Mission Estimates of Public Expenditure in l'griculture, 1970-1974 19 PrA-'ianerlenrVrU% A fi_ - fl Anri-ualA rXppeni'iure--- J2 .- t-fl,. bvy Sub-Progr-sIL 20 PRIDA-Planned Financing by Sub-Programs Table 1: VALUE OF AGRICULTURAL PRODUCTION, 1960-1969
(millions of bolivares at 1968 prices)
Average Anrnua:L 1960 1961 1962 1963 1964 1965' 1966 1967 1968 1969 Growth Rate 1960-9 perc ent
CROSS ROI4US'IC PICDU 31G7 34MO942,0 370,3.0 39052.o 421t9.0 4475 0 459b3.0 405 51224.0 5304.0 4.9
AGRICULTURAL PRODU'CTION 2825.2 2c110.7 2985.9 3132.9 34 .3 3642.2 3850.2 L009.2 14263.7 4421.2 5.1
Plwat Products 1342*5 1267.6 1332.8 1402.9 1495 .0 1601.0 1680.L4 1769.9 -1875.3 1893.9 32-
Cereals 297.1 215.0 27t6.1 250.9 290.9 330.8 344.:2 393.1 448.1 450.4 4.7
Legumes 102.2 57.5 IJ8.8 52.6 54.5 57,9 64.9 69.3 64.8 67.0 -3.3
Roots and Tubers 234.4 194.8 2h9.5 259.8 266.3 277.7 285.2 295.5 315.3 314. 4 3.3 Oilseeds and Fibres 73.0 93.9 134.2 106.5 133.1 145.7 152.5 178.2 173.1 183.9 10.8
Fruits 275.5 239.8 224.7 247.4 250.9 266,0 274.9 279.1 309.1 324.8 1.8
Vegetables 70.1 75.9 70.7 72.6 87.1 90,1 91.1 82.8 94.7 86.8 2.4
Other Industrials 370.2 390.7 378.8 413.1 412.2 432.8 467.7 471.9 470.2 474.1 2.8
AnimaL Products 1011.3 1074.7 1153.9 1206.5 1342.8 1420.5 1499.4 1570.C 1671.5 1785.3 6.6
Milk 263.9 278.7 3(1.9 327.0 367.1 392.6 415.4 436.2 461.9 488.7 7.1
Beef!' 463.4 472.2 498.2 524.8 551.6 579.9 609.5 639.1 675.9 714.4 4.9
Pig Meat 171.9 L73.6 169.8 174.4 186.1 192.1 193.4 196.5 210.1 227.9 2.0
Poultry 58.8 83.1 93.4 104.4 130.8 132.2 139.7 155.5 163.8 175.1 12.9
Other Meat 22.1 22.0 22.0 22.1 22.1 22.2 22.2 22.3 22.3 22.4 0.1
Eggs 31.2 45.1 68.6 53.8 85.1 101.5 119.2 120.L 137.5 164.8 20.0
Fish Products 57.4 55.9 63.5 65.2 73.9 79.8 78.1 76.2 84.5 92.4 5.4
Forestrv Products 45.4 _ 5.8 t6.2 89.5 62.6 65.8 67.3 70.2 70.4 69.6 4.2
Non-Registered Prcduction 368.5 366.6 339.5 408.6 49c.o 475.1 525.'. 522.5' S ___5.
Value Added in Agriculture 2626.3 2612.9 2768.7 2868.0 3099.8 3296,,2 3462.3 3628.3 3822.6 n.a. 4.8
/ Does not incluide contraband imports from JolombLa.
2/ For period 1960-68.
n.a. Not available.
Source: Ministerio de Agricultura y Cria. Table 2 SELECTED AG3RICULTrURAL COMMODITIES: ACTUAL PRODUCTION 1960-1968 ESTIMATED PRODIJCTION, 1969; PRODUCTION TAR3ETS, 1970-1974
(thousands of metric t:nsa)
Actual Estimated Targets 2/ Average Annutl percent 1560 1961 1962 1963 1964 1965 1966 1967 196s8 1969 1970 1971 1972 1973 1974 1960-1969 1969-1974
Rice (pacldy) 71.9 60.7 103.1 131.1 165.8 199.9 195.0 223.1 2414.6 271.3 332.8 350.4 365.1 406.4 421.7 15.9 9.3
Maize 439.5 419-5 540.5 430.2 475.0 521.0 557.5 633.4 739.7 692.1 770.0 843.8 924.7 1,013.4 1,110.6 5.2 9.9
Becns 49.8 31.C 23.0 24.0 25.1 26.1 29.8 31.8 26.3 26.5 3591 38.0 42.0 46.1 42.0 - 4.4 13.1
Potato 133.6 74.C 121.2 110.9 123.5 135.9 126.1 132.6 142.5 122.9 157.0 166.0 176.9, 188.8 201.2 - 0.9 1(.4
Cassava 340.2 339.2 322.8 342.4 311.7 301.4 322.0 315.6 34(.9 348.3 374. 6 393.4 413-4 434.4 456.4 0.3 19.6
Tomato 49.3 65.9 c2.6 53.8 71.9 72.1 72.3 65.6 82.6 68.7 89.9S 95.3 101.3 107.6 114.1 3.8 114.9
Plantain 222.1 215.1 197.1 198.1 217.6 203.0 211.6 185.4 222.2 231.1 241.4 253-3 268.8 286.9 306.6 0.4 '9.9
Baniana 9590.0 753-C. 69,6.0 771.0 743.0 829.0 842.0 860.0 948 .0 977.3 1,006.3l 1,043.3 1,081.8 1,121.8 1,163.4 - 0.1 3.6
Coffee 99.0 57.1 54.2 60.7 56.1 54.3 61.0 61.3 62.2 63.7 64-7 68.7 71.C 72.5 75.7 0.8 3.5
Cocoa 18.5 16.5 18.9 20.8 20.9 21.9 22.9 23.1 24.7 25.3 26.6 27 .8 29.2> 30.6 32.0 3.5 14.8
Sugar Carne 1,924.5 2,448.oC 2,535.7 2,730.2 3,710.6 3,693.5 4,437.5 4,009.0 4,010 3 4,232.2 4,716.6 4,920.1 ;,141.1 5,371.0 5,618.0 9.2 9.8
Tobacco 9.2 10.4 8.4 8.8 8.4 9.0 9.7 9.7 11.4 9.6 12.95 13.8 15.2 16.7 18.4 0.5 13.9
Sesame 16.2 24.9 28.1 30.9 46.6 54.1 60.0 80.5 76.2 82.6 90.14 102.0 114.0 124.0 134.0 19.8 10.2
Cotton 29.6 36.4 24.2 34.4 41.3 44.6 46.0 47.8 46.1 48.6 57.4 695-L 74.6 895.0 96.9 5.7 15.3
Sisal 1l0.0 8.4 a8. 11.6 10.8 13.3 13.5 14.2 1...4 15.8 ,6. i.6.5 16.8 17.1 17.5 5.2 2.0
Milk:/ 420.9 444.5 481.5 521.5 585.5 627.1 662.6 695.7 736.7 766.5 830.0 900.0 1,025.0 1,168.0 1,331 .0 6.4 11.7
Beef 120.8 136.9 1a8.4 147.C 157.5 162.4 179.7 183.9 19:2.2 239.5 220.21 227.9 236.1 246.2 260.3 7.2 1.7
Pig Meat 95.1 26.1 28.3 28.1 29.6 28.8 28.8 31.2 32.1 36.7 42.C) 45.4 48.8 52.5 56.3 4.3 81.9
Pouiltry 21.6 30.6 2.6 36.2 45.6 49.0 47.6 52.8 59.8 50.6 56.8E 62.5 68.7 75.6 83.1 8.9 10.4
1/ In millions of litres.
2/ Projected by CORDIPLAN. Source: Based on data supplied by the Nisisterio de Agricultura y Cria and projections by CORDLPL3AN- Table 3 : i3XCORTS OF AGRICULTIURL 1964-1968iO.UCTS, (nillions of boL',il.res) V a I u e P e rc e n ta e 19R64L 1965 15966 1L96 7 1968 1964 1965 1966 196 7 1963
TotvAl E-rmor-rs 108!g8.-9 1,C0918.8 1OA8.5n~ -II:5C7. 112..2-/ .- ._ i.- 1Y
i, ta;r -IB xnorts- 130.9 1b46.9 1S6.8 t8.l 166.2 100.0 100C. 0 100.0 CO. 0 1C.()0
Plant Prod1ucts 1-L5.1 122.5 145.9 L65.1 146.3 87.9 33.4 93.0 89.7 88.0 Cof'fee and products 79.9 78.1 75.3 66.7 34.9 61.0 53.2 48.0 36).2 21.0 Cocoa and products 206.5 23.9 21.1 21.2 3)4.7 20.2 16.3 13-5 14.8 .2 0c 3.2 1.5 15.0 . 29.1 2.4 1.0 C.o 1(D.9 17.55 11.3 21.5 37.0 24 .0 - 7 -7 13.7 20.1 '4.4 Bana.nas and PlantairLs 3.1 3.5 5.5 4.9 11.0 2.4 2.4 :3.5 2.7 6.6 Fru-vlit;s 0.5 1.5 1.4 2 .4 2.4 0.4 1.0 (.8 1 .3 1.4 Ve.etab les - 1.1 1.0 0.5 0.7 0.8 0.6 0.3 0.4 Otne3:s 1.9 1.6 5.1 6.5 '.5 1.5 1.0 :3.3 3.4L 5.8
Fics'- Products :14.0 22.1 9.1 18.( 15'.3 10.7 15..0 5.8 9.8 11. 6
Fcres'jrv Prod-cts 1.8 2.3 1.8 -_ 1.0 o.6 1.4 1.6 1L.2 0.5 o.4
1/ A,7r:icul'ural as percentage of total exports.
Source: Calculated from data supplied by the lrinister io de Agricultu-a y Cria and Banco CentraL de Venezuela. Table L: IMPORTSOF GRICULTLTRALPR)DUCTS, 1964 -: 968. (millions of bolivare-)
Value Percentage Average Annual Growth Rate 1 964 - 1 968
_ 1964 1965 1966 1967 19658 1964 1965 1966 1967 1968 (percent)
TOTALDIPORTS 4886.3 5590.2 5450.5 ;632.3 6538.3 l7.81/ 17.21/ 15.23/ 15.5-/ 13.0g/ 7.6
8 0 AiURICULTUWALDqPORTS 7 .0 _959..4 827.14 872.9 84o9.7 100.0C OO.0 100.0 100.0 100.0 -0.6
Plant Products 478.6 4l36.8 462.2 527.3 57 M5 55.C 50.7 55.9 ciO.4 68.2 4.9
Wheat 162.9 170.1 166.3 217.4 218.8 18.7 17.7 20.1 24.9 ;!5.8 7.7
Maize 41.2 1L3.7 6.0 0.4 31L.2 4.7 1.4 0.7 - 3.7 -5.6
Edible Oils 21.4 43.8 26.1 36.7 58 5 2.5 4.6 3.2 4.2 6.9 28.7
Oilseeds3/ 65.4 46.6 62.0 40.6 3;.7 7.5 4.9 7.5 4.7 3.7 -10.9
Fruit 36.8 36.0 35.3 39.4 35.1 4.2 3.8 4.3 4.5 4.1 -1.1
Beans 18.3 15.4 20.6 23.2 26.8 2.1 1.6 2.5 2.7 2.9 7.9
Cotton 25.3 32.8 19.8 15.2 27.7 2.9 3.4 2.4 1.7 3.3 1.8
Others_/ 107.3 128.4 125.6 154.4 152.0 12.4 13.3 15.2 17.7 7.8 7.2
Animal Prcoducts 219.7 2!58.0 146.6 _40 5 7 72 _ 26.9 7.7 16.1 - 8.6 -135-
Milk and MilkJ Products 155.8 158.3 64.1 82.7 39.1 17.9 16.5 7.7 9.5 4.6 -15.0
Pig Meat 31.6 21.0 25.5 22.8 1,.0 3.6 2.2 3.1 2.6 1.8 -11.1
Others 32.3 78.7 57.D 35.0 2(1.6 3.8 8.2 6.9 4.0 2.4 -8.0
Fish Products 17.0 :.q 10.5 ;.0a 2.0 2.2 2.3 1.2 0.6 -L4.3_
Forestry Products 154.7 193-7 199.6 194.6 190.2 17.7 20.2 24.1 22.3 _ 2.4 5-3
Pulp and Paper 130.2 165.1 159.6 169.4 162.8 15.0 17.2 19.3 19.4 :9.2 5.7
Others 24.5 28.6 40.° 25.2 27.4 2.7 3.0 4.8 2.9 3.2 2.8
I/ Includes sesame, peanuts, soybeans, and coconuts and copra.
2/ Agricultural as percentage of total imports.
3/ Includes other cereals and legumes,processed foods, long fibres, potatoes, animal foodstuff, spices and seeds.
Stern: Calculated from data supplied by the ILin-sterio de AgriculttLra y Cria and IBanco Central da Venezuela. Tablo 5: AGRICUIJLUIAL LAID USE AIIND T7INIURE Iq 1961 ( thousands oft' hec +ares )
,"rea P~~~'ercent- (hectares)
Total Area in Farms: 26,21]5 100.0
Land Use:
Permanent crops 653 2.5 ATnual and semi-pernanent crops 1,025 3.9 Fallow 2 ,4i7 9.3 Cultivated liasture 2,7h8 10.5 Natural pasture 13, 58 53.2 Forest 4,h76 17.1 Other 908 3.5
LTand Tenuwr'e:
O0l-,,er--oc:up2er 22,065 814.2 Tenant 582 2.2 ,ILi . C A Share-cropper l " 0. 6 Squatter 3,4lh 13.0
Source: data from Agricultural CenSuS, 1961 Table 6: DISTRIBUTION OF' FARM@5S BY SIZE Ih 1961 (thousands of farms, thousands of liectares)
Number (u' Farms Area lNumber Percent Area Percent
Less than 10 hectares 213.0 67.7 7h3 2.9
10-49.9 hectares 70.0 22.2 1,319 5.0
0J-'1?9.9 hectares 18.9 6.0 1,66P, 6.L
200-4 t99.9 hectares 6.2 1.9 1,775 6.8
500-°99.9 hectares 2.8 0.9 1,8146 7.1.
More than 1000 hectares _.2 1.3 1V,65 71.8
TOTAL 315.1 100.0 26.005 100.0
_ uree: data fromn Agriciul-tu,nl Cpnsu 1901 Tab:Le 7: LAND REDISTRIBUTION UNDER THE AGRARIAN REFORM PROGRAM, t960-1968
1 960 1961 1 962 1963 1964 1965 1 966 1967 1Q68
Land AffectedL 900.8 180.9 261.5 171.0 202.9 78ll.3 LL5.5 380.0 708.2 Private g0 . TT1.0 214.3 29.4 1067 T87 ~ 135.0 09 777 Public 440.8 65.9 47.2 141.6 96.2 400.6 310.5 277.1 640.5
Families Benefited2/ 25.2 11.1 14.6 9.7 11.5 36.4 16.9 14.1 16.8 3/ Total Investment- 1 48.1 145.0 117.2 66.9 53.1 139.2 120.6 99.7 111.9 Land and improvements 108.0 82.2 48.6 51.4 30.5 95.0 44.6 38.6 40.0 Consolidationr 40.0 62.8 68.6 15.5 22.7 44.1 76.1 61.1 71.9
of IANV n.a.r n.a. n.a. n.a. 171.3 225.4 230.2 203.2 232.1 Budgetary Appornnriation to IAN3 _'121.8 199.5 139.3 107.8 150.8 150.8 168.7 181.6 177.3 Agrarian Debt Bonds 2/ Bonds Authorized 2000. - 20.0 - - 200.0 - - - Bonds Issued 61.2 42.6 31.8 5.3 17.4 38.1 25.7 21.0 66.8
n.a.: Not available.
1/ Area in thousands of hectares.
2/ Thousands of families. 3/ Millions ol' bolivares.
4/ Balance met; by inco0ne from investments and by domestic borrowing.
Source: Instituto Agrario Nacional Table ° USE OF INFUIS IN AGRICULTURE, 1960-1968
Average Annual GrDwth Rate ______1960 1961 1s962 1963 1964 1965 1966 1967 1968 1360-1968
Fertilizers (tons )l
Total Production -0.915 57 353 55 831 12, 4714 225,91 244521 250,996c 2'34 25' 927 37.2 Simple fertilizers - 2 5 3,266 91,796 32T,'8i1 75,965 11 Compound fertilizers 20,915 23,997 26,3059 17,871 29,345 58,025 76,799 516,910 97, 460 Intermediate product - 9,054 11,166 50,337' ]04,769 102,273 98,228 85,1h9 151,269 21 Chemicals (tons)4
Total Supply 11,978 6,72. 6 06)4 6 2913 9 482 12 782 9,636 '12,266 1 7? 41 9.2__ Prodiuction 927 2,133 T ' 75 ;20 ,,529s9 930 Imports 11,05i 4,59° 2,049Q 2,7747 3,728 4,512 3,022 3,737 3, 485
Certif'ied Seeds (tons) - Total 971 2 087 3 7)4c 4 290 5)470 5 825 12 15. 7929 205 32.3_ 'Maize 2 3 2, 2, 2,259 2, 3,13 3,100 Ricfe 1,000 1,200 1,250 2,2)401 3,652 3,232 Cotton1 , 79C 827' 1,2)4 1,019 1,500 1,5c0 1,600 1,094 1,287 Otherssl 6 7 1'3 3( 511 514 5,1426, 926 1,586
Machinery (imported units)
Tractors-wheeled 1,037 68-3 1,909 1,540 2,039 3,038 1,68S 1, 493 1,796 7.16/ Trac-tors-tracked 103 42 20 70 91 92 2114 487 106 14.2- Harvesters 35 95 8o 55 123 180 18' 198 164 21.3 Seeders 137 195 331 237 266 4147 451 456 352 12.5' Ploughs 410 447 1, 362 1405 962 798 45 7 248 280 -3.5 Others 1,689 4,952 32,432 7,935 12,747 5,725 7,161 1,262 652 -6.2
Machinery (milliorns of Bolivares - CIF value of' imports) 115.0 107.5 14Wi.2 163.7 208.5 264.8 231.1 214.8 258.8 10.7
Value of purchased inputs in agric Lture'k'million of Bolivares) 198.9 197.8 21'7.2 2614.9 320.6 346.0 36' .7 380,9 435._ 10.3
1/ Refers to national production
2/ Refers -to production and imports of insecticides, herbicides and other agricultural chemicals
3/ Refers to seeds produced by the Ministry of Agriculture
4/ Principally sesame, beans, peanuts and potatoes
5/ Mission estimate, including cost of seeds, fertilizers, chemicals and fuels and depreciation of machinery
6 Refers to period 1961-1968
Source: Compiled from data supplied by the Ministry of Agriculture Table 9: FLOW OF AGRICULTURAL CREDIT, 196o-1969
(in millions of bolivares)
- ~~ ' Avrerage Annua:l 1960 1961 1962 1963 1964 1965 1966 1967 1 968 1969 Grow'th Rate
I Ii -1 68
Jr Source:
TOTAL 1R6;.o) In3.7 In5.1 5.' '. 36 .a. 5.>69.7
Private Sources 42-4 45.0 38.3 52.8 40.7 38.5 ;3.6 33.5 43.8 n.a. -0.4
BAP lown account) 129.7 127.5 175.4 152.4 219.0 215.0 242.7 247.0 228 .3 244.' 83.7
Smnall faxners 75.5 70.9 83.3 78.0 111.0 115.1 133.0 124.0 117.7 123.2 7.5 Commercial fanners 5.2 56.6 92.1 74.4 108.0 99.9 109.7 123.0 110 .5 121.0 10.0
13AP (government accolunt) 13.3 52.9 51 .5 60.5 44.0 51 .6 49.3 53.7 63.9 66.7 2 .7 2r Use>:
OTA]. 185.4 225.4 265.2 265.7 303.7 305.1 345.6 334.2 336.0 ii.a. 5.9 _
Agricudlture 122.4 132.4 142.8 143.1 204.3 192.2 236.4 226.7 246.7 ii.a. 9.3 LiLvestock 61 .7 93.0 121.0 121.3 97.3 110.95 106.6 1 04.8 87.5 n.a. -0.8 F:ishing 1.3 - 1.4 1.3 2.1 2..0 2.6 2.7 1 .8 n.a. 2/ T2cpe of Credif
TOTAL 1 225.4 265.2 265.7 303.7 305.1 345.6 334.2 336.0 ii.a. ,.9 _
Piroductioin Credit 148.2 151.2 179.2 186.2 220.6 218.1 260.1 245.7 238.0 n.a. 6 .7 Development Credit 37.2 74.2 86.0 79.5 83.1 87.0C 85.5 88.5 98.0 85.9 4.1
t,, ,./. i:, a owi bleVc ytaear tL11LLI 19UV because the government account; crecdit programs dicd notl havre bill effect until 1961. 2/ It is assumed that all private credit is short-term and that all government account crediti is lonr-term.
Source: Ministerio de, gricultura y iCria and Banco Agricola y Pecuario. Table 10: B.AP CREDIT PROGRAM, 1960-1l69
(millions of bo)ivares)
Average Annual Gro wth Rate 1960 1961 1962 1963 1964 1965 1966 1967 1-968 1969 1961-1969
No. of Loans
Total 108 906 70,375 36,326 74 193 74,312 60 301 51 765 42 269 1 349 40,827 _- 4.5 Own Account: ____ 70, 75,7]7 72,117 012 5 5 5 7 8 _. -peasant 99,c,98 66,187 70,7 105 7,T774 j~58 52,00.36 4o 37 32,307 29,215 -commercial 8,854 3,825 5,609 4,511 6,075 6,113 6,614 6,639 5,497 6,802 7.5 Government Account 1454 363 612 1,908 2,202 1,755 1,086 1,8L45 3,545 4,810 38.3
Value Committed
Total 226.8 178.6 236.6 255.7 333-. 27.2 - 334.8 3452 . 339.3 384.0 10.0 Own Acccs.int: TTTT145.1 193,1 171.9 273.1273.7 282.0 293.7 29-.1 . 279.25 -peasant 1268.o_I .0 107 T 99 - l5.E 155.7 161.5 141.7 1.0 142.8 -commercial 55.2 61.1 85,6 72.3 118.2 126.2 132.2 146.4 111.9 137.0 10.6 Government Account 44.9 33.5 h3.5 83.8 60. - 45.3 la1.1 51.0 86.4 104.8 15.3
Value Disbursed
Total 143.1 180.4 226.9 212.9 263.0 266.6 292.0 300.7 292.2 310.9 _ 7.0 Own Account: 129. 27.5 7 .4 _219.(C 215.0 2.72217.0 § _ _28= -peasant 7T;5 70.9 3 T ill.(C 115.1 133.0 124.0 117.7 123.2 7.1 -comrercial 54.2 56.6 92.1 74.4 108.C) 99.9 109.7 123.0 110.5 121.0 10.0 Government Account 13.4 52.9 51.6 60.5 44O 51.6 _ 49.3 53.7 _ 63.9 66.7 2.9
Value Repayed
Tbtal 96.8 125.3 125.1 116.8 133- 3 154.3 183.7 194.8 191.1 179.5 4.6 Own Account: g3. 122.2 121.3 114.5, 123C, 12.7 171.9 18. 1 __ _ 3-4 -peasant 22.2 29 77.7 79.6 -comrmarcial 73.1 92.7 82,5 77.8 74.8 80.8 94.2 101.0 90.3 83.0 - 1.3 Government Account 4.C).10 2.2 9-' 11.6 11.8 14.2 20.0 20.2 _ 265
Source: Banco Agr:icola y Pecuario Table 21: ECONOMIC DATA ON FARM SAMPLES IN SEVEN STATES, 1968 - 1969
A., B. C. D. E. F. C. H.
Zulia 9/ Zulia 9/ Lara Calabozo Trujillo Yaracuy Portuguesa Rnr inaq
No. of farms in sample 30 29 9 9 9 23 144
Principal products Dairy Dairy Potatces Rice Plantains Maize Rice Rice Beans Maize Sesame Sesame Maize Cotton Beans
Average area per farm 10/ 343.4 377.0 18.0 93.0 9.3 107.9 331.-3 38,3.0
Use of machinery 1/ 4.7 4-6 35.0 36.0 n.a. 25r-.0 22.0 19 .3
Use of labor 2/ 5.3 3.0 4.50 7.6 81.0 7.1 5.8 2.7
Investment in machinery 3/' L40.7 169.4 1526.0 2.1 C.7 n.a. 73(.0 713.0
Gross income 4/ 129.2 135.3 8L.L 231.ht 43.9 88.7 317.7 214.2
Total costs 5/ 96.2 97.4 84.3 I1/ 181.3 25.6 58.6 202.1 180.7
Net income 6/ 33.0 37.9 0.1 11/ 50.1 18.3 30.1 115.6 33.5
Total fixed investment 7/ 731.2 782.7 36.9 770.3 76.7 208.4 60oL.3 395.7
Return on invest,ment 8/ Average 4.5 4.8 0.2 6.5 23.8 JJ.4 19.2 3-5 Maxixmm L2.1 9.1 n.a. 10.7 72.2 51.8 55.4 73.0 Minimum neg. neg. neg. neg. 7.4 ',.2 neg. neg. n.a. - Not available. 8/ Net farm income as percent of total fixed investment. neg. - Negative 9/ Sample A was made in 1967; sample B was made in the same area in 1968/9. 1/ Measured in units of traction (5 hor,se-powqer) per 100 hectares. 10/ Utilized area in hectares. 2/ Measured in man-year equivalents per 100 hectares. 1T/ The costs include an average annua.L rent for -the land of Bs 17,110, 3/ Bolivares per hectare. and the value of the land is not included in the fixed investment.- ,/ Thousards cfb plarsoperfarm. If it is assumed that; the rent is equiva:Lent to 5% of the value of g/ All purchased inputs p)lus :Labor. the land and improvements, them the net income of an owrier-occupier / Net of inputs ancd labor, but includinag ret-urns in capital and would be Bs 17,200 or a total investment of Bs 378,900, giving a administration. return of 4.5%. 7/ Includes larnd, improvements, installation, livestock and machinery. Source: Banco Agricola y Pecuario, Universidad deL Zulia. Table 12: TtODUCER ANDRETAII, PRICES OF' EY AGRC2ULTURAL CONIMDlITIES (bolivares per kilogram)
Producer Prices Retail Prices ExpDrt Prices
Increase Increasef Average 1964 1i965 1966 1967 1968 1964-1 968 1964 1965 1966 1967 1968 i c-1n968 196(-1968 Percen t Percent Crops
E /ic o.61 0 60 0.58 0.58 0.58 - 5'.0 1.77 1.79 1.75 1.74 1.61 - 9.0 0.40 maizei' 0.39 0,38 0.35 0.37 0.38 - .5 o.60 0.56 0.56 C.58 0.60 - 33eans3 1.18 1.09 1.13 1.19 1.20 .2 1.92 1.72 1.82 1.95 1.76 -8.3 PIbtato-/ 0.61 0.52 0.60 0.55 0.53 13. 1 1.02 D.96 1.0c 1.05 0.90 -'11.7 Cassava* 0.23 0.24 0.21 0.23 0.25 - 8.6 o.61 0.54 o.148 0.53 0.70 '14.7 Tomato* 0.36 0.41 0.53 0.51 0.45 25.0 1.22 1.19 1.22 1.12 1.26 3.2 Plantain5/* 0.10 0.09 0.10 0.10 0.12 20.0 0.20 0.19 0.20 0.21 0.21 5.0 4 B3aanan 0.21 0.18 0.13 0.16 0.19 - 9 .5 0.53 D.57 0.54 0.58 0.52 - 1.8 Coffe-7/ 3.70 3.86 3.52 3.34 3.36 _ :?.1 14.08 4.36 4 .Li 3.58 3.60 -11.7 3.77 C.ocoa- 2.82 2.63 2.67 2.55 2.44 -1134 4.09 14.44 4.5c 14.59 4. 77 16.6 2.18 Sugar C /ane8/* 38.00 38 .00 37 .00 38.00 36.00 -_5 2 0.99 0.99 0.99 0.99 0.96 - 3.0 0.50 Sesame'/ 1.11 1.10 1.07 1.714 1.C08 - 7 4.31 4.36 14.339 4.56 4.67 8.3 2 Gotton 2/ 1.18 1.20 1.22 1.22 1.21 2.5 3.69 3.84 3.87' 3.72 3.85 4.3
Livestock
1 1 Milk ' 0.63 0.76 0.71 0.72 0.67 6.3 1.03 1.30 1.214 1.23 1.17 13.5 - ]3eef2i/'* 1.71 1.70 1.85 1.75 1.82 6. 4 5.83 5.85 5.64 5'.62 6.05 3.7 lPorkl2,'* 2.31 2.35 2.46 2.45 2.47 6.9 6.07 5.35 5.86c 5.62 6.12 0.8 JPoultry!2/* 3.38 3.34 3.32 3.19 3.12 - 7.6 4.12 4.77 4.3L L4.12 4.03 - 2.1
* No miinimumirice program
1/ Refer to pacddy rice on fanrs and polished rice to constmer; EIAPprice to producer fell from Bs.0.60 to Bs.0.55 for medium-grain paddy between 1964-1968.
2/ Refer to yellow maize; EAP price to producer has remairned at BS.(.140.
3/ BAP price to producer rose from Bs.1 .10 to Bs.1 .25.
4/ BAP price to producer rose from Bs.0.35 to Bs.0.140.
5/ Refer to pri-ce per unit.
6/ Refer to washed coffee on farm and FOB export prices; price guaranteed to exporter for, washed coffee rose fran Bs.3.22 to Els.4.03.
7/ Refer to regular cocoa on farm and in domestic market; guararLteed price rose from Bs.3.15 to Bs.3.70 for quality cocoa.
8/ Refer to price per ton cf cane on farm, and per idlogretm of refined sugar in the markeit.
9/ Refer to price per kilogran of seed on farmn and per litre of oil in the market.
10/ Refer to price per kilogram of raw cotton on farn, and per litre of oil in the market; ,nijnus prices did not charge.
11/ Refer to price per litre of fresh milk on farm, and per litre of pasteurized milk in the market; subsidy rose from Bs.0.10 to Bs.0.13 per litre.
12/ Refer to price liveweight on farm and dressed weight irn market.
D/ Refer to liveweight prices of table poultry.
Source: l4inis terio de Agricultura y Cria . Table 3 HAURVESTED ARME,1960 - 1969~
(Thousands of Hectares)
AveAneual Dlist'ributiLon Growth R~ate 19~60 1961 1.962 1963~ 196. 1965 1966 1967 1968 1969 in 1969 1961-1969 - -- jrercen;)- (nercent)
TOTA2I n.a. 1332.6 11430.0 11417.2 11431.9 15145.9 1534.2 1767.8 1B18.8 1828.2 100.0 ___4_- Cereals 4141.-7 1449.5 553.5 502.15 5,36.8 570.9 5814.14 7140.2 7814.0 767.7 ____2I.7.. Ric e 12.9 3T3-9.0o ~73. I T ~ ~ TT 1214.8 6.3 9.9 Maize 3915.2 388.7 1483.3 1426.7 61433.0 1461.8 1466.9 616.1 657.2 639.1 35.8 qJ Surghum - - - - u.9 '.7 14.6 6.8 9.3 2.6 0.5- Whe at .1.6 2.3 1.2 2.1 2.2 2.3 2.9 3.0 2.3 1.2 0.1 'D.0
Le _ 157 .7 96.7 7,9.14 914.5 105.5 108.2 111.4.3 1)9.9 131.8 1302 ___ 74.2 _ _ L.8. Das 29 T ~ ~ T h~5.2 0.2 6. 8 Beans 1514.8 93.14 7IA.9 90.1 102.8 105.3 1O.-7 116.0 127.14 125.1 7.0 4.3
Roots and Tubers n.a. 61.7 67.6 67.-2 67.6 69.6 72.5 83.0 90.6 ___9_ _6__4_9_J4.8 Sweet P5tW ni a. -7 2.7 0.1 -1.*1 Potato 1.2 9.3 1.6.0o 21. 114.-9 16.2 16.14 16.1 16.9 13.9 0.9 8.7 Cassava n.a. 33.9 25.7 25.1 214.7 214.5 25.6 35.0 140.5 J40. 9 2.2 2 .4 Ot ~hePrs 2i .5 15.~7 2.1 24.9, 26.3 27.1 2. 29.9 31.1 321.713
Fruit sn.a. 137.3 15U&5418_ 139.7 lhO.9 _I425 146. 519 245.8. Orange n.e. 214.C l/ 26.0 l/ 28.0 l/ 30.0 1/ 21.8 314.0 lI 25.1 25.4 :25. 6 1.14 n. a. Geaava n.e. 2! 2/ 2/ 2/ -. 2.5 2/ 1.5 1.5 1.5 0.1 n. a. Papaya n.a. 7/ Y T/ '/ 2.5 'T/ 5.9 5.9 6.0 0.3 n. a. Pineapple n.a. 'f/ 2/ 2/ fl 14.2 Y/ 5.6 5.7 3.0 0.3 n. a. Plantain 66. 2 6071. 60.0 587 597.5 57 .0 54.7 51.14 55.2 159.6 3.0 0.0 Otbhers n.a. 6.5 6.8 7.3 7.5 7.8 7.9 8..2 8.8 9.6 0.5 24.8
V etables .5.6 8.1 7.1 7 .7 9.1 9.14 9.8 11.8 12 .5 j______L. -
J~~~~~~~flTh *~~~~~~~ T.W 1.0 ~~~~~~~~~~~~~~~~~~~F ~~ 0.7 -72 Onion 1.7 1.7 1.14 1.5 1.9 2.0 1.7 1.7 1.6 1.5 0.1 -0.8 Tomato 3.3 14.3 3.5 3.-9 14.8 14.7 5.2 14.5 5.1 4.6 0.3 (4.8 Otbhers 1.7 1.7 -1.83 1.8 1.9 1.9 5.1 5.2 2.1 0.3 2.7
Indumstrials n.a. 579.3 589. 9 606.'7 618.7 6146.9 657.5 666.5 663.14 _-6i6.2 36. 2. 0 Sesame - 153.4 7.6 13.9 Cotton 514.9 50.3 37.14 147.5 43.7 145.9 149.1 149.6 53.5 50.5 2.9 0).0 Coconlit n.a. 25.8 25.0o 25.0 214.1 25.14 23.0 23.0 20.8 20. 8 1.1 -2'.8 Peanut 1.3 1. 1 1.9 1.14- 1.9 1.9 2.3 14.9 3.7 3.1 0.2 Si sal 9.7 10.5 10.-5 10.1 11.1 11.0 11.2 11.2 11.9 13.2 0.72. Cocoa n.a. 72.C' 710.0 70.0D 70.0 70.0 70.0 71.6 71.5 71.0 3. -. 1 Coffee n.a. 316.6 3140.0 340.0 300.0 300.0 300 0 303.1 292.2 303.1 16.0 -0.5 Suagar Cane 33.8 141.6 142.I 1414.7 46.6 49.6 52.6 53.3 49.2 5283.3 3.0 Tobacco 7.0 7.5 6.0 6. 6 6.2 6.5 6.6 7.3 8.5 7.7 0.5 Q.3 n.e. Not Available
I/ :Estimated, including guava, papaya arxi pineapple. T/ Included under oranges.
Source: based cn dataL from the Ministerio de Agricultura y Orna. Table ]IL: CONSTRUCTION PIRGRAM IN IRRIGATION ANI) RECLAMATION PROPOSED BY MINISTRY OF PUBLIC WO]RKS, 1970 - 1974
(in millions of bolivares)
"Total InvestEnt vestment Pr am Frther Cost PrimDr 197I-IT777- 1972 1973 174 Investment to 1970 Planne d
Irrigation Projects Under Construction 2209.1 1236.7 72.7 62.,4 62.5 56.8 65.8 584.8
Barinas State L76.9 80.1 4.8 4,5 4.5 7.0 9.( 46.5 Portugua sa "415.3 260.5 6.6 11.0 13.0 14.0 19.5 90.6 Guarico 621.0 502.1 10.4 12.,6 6.0 5.0 10.() 74.9 Trujillco 1/ 1440.0 66.6 5.1 15,8 20.6 11.6 11.'5 306.8 Fa'Lcon 35.1 16.8 8.0 - 1.5 3.0 5.8 - Sucre " 1/ 75.1 63.0 3.5 4.,1 3.3 1. 2 - - Yaracuy i 108.0 16.0 8.4 2,6 5.0 10.0 10.0 66. o Aragua 1L42.3 124.9 5.4 2.,0 5.0 5.0 - - Cojedes " 5.0 4.0 0.1 - - - _ _ Miranda " 12.5 11.5 0.1 - - - _ _ Zu:Lia 90.4 37.1 8.0 8,4 - _ _ _ Anzoategui " 21.9 20.9 0.3 - - _ _ _ Lara 65.6 33.2 12.0 1.4 3.6 - - _
Small Irrigation Poects /4- _ .6 22,7 18.1 16.7 18.4 _ -__
Reclamation Proje!cts UJnder Construction 1445.6 162.7 48.7 30.0 38.0 35.0 30.0 97.2
South of Lake Ma-racaibo I400.0 124.8 40.0 30,.0 38.0 35.0 30.0 97.2 Rio Apure 45.6 37.9 8.7 - - - - -
Other Warks 2/ 26.9 8.0 21.0 14.9 17.2 18.1 21.7 _
Preposed New Works 500.0 - 2.0 33.0 55.0 76.0 69.0 265.0
Of which: :Lst Priority 60.0 - 2.0 17.0 21.0 20.0 - - 2nd Priority :118.0 - - 12,0 23.0 32.0 39.0 12.0 3rd Priority 322.0 - - 4.,0 11.0 24.0 30.0 253.0
TOTAL 3181.6 1407.4 159.0 163.0 190.8 202.6 204.'3 947.0 IDB Loan - 3 C. C) IT1 1 7.2'- Central GoverrDnent - - 152.4 149.2 173.6 191.2 204.9 -
1/ Inc:Luded in 2DB Program. T/ Includes flocd protection in cities and contingency for emergencies.
Source: Ministerio de Obras PLbl1icas Table 15: PUBLIC EXPENDITURE IN AGRICULTURE, 15960-1970 (rnillionis of bolivares)
Average Annual 1/ Growth Rate 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1960-1969 Perceint lotal. o Lontrol_uaemrnment EKiDerriture 6,553.4 6 ,633.2 7,202.4 7,587.2 8,017.5 8,753.5 9,278.0 10,080.0 9,235.5 7.-/
Total Public Secto:r Ependiture in Ariculture n.a. n.a. n. a. n.a. 1,220.0 1,127.2 1,379.6 1,233.8 1,336.4 1,395.9 n.a. 2.7-4/
Total Central Government Expenxiture in Ag-ciculture 499.0 712.8 508.7 492.2 692.2 729.6 758.9 857.3 878.4 927.5 771 .5 7.1
Yr.ist,-; off Agri Lt-art,t -e iizr- Bre3eding
Total Kcpenditure 247.3 257.0 203.8 224.2 201.5 207.6 206.1 211.3 228.7 228.7 257.5 -0.8
Minist ! of Pabl ic Vorks - Divisi on of aulic Work s(O O
Total Ecpendib.re 61.9 94.3 102.6 110.2 171.0 159.3 224.5 244.3 209.1 226.2 217.0 15.5
Agriculture a!nd Livestoclk Bank (BAP)
Total Ecpendilmr e 35 472.9 488.2 499-i 59°- 5 61 .1 n.a. 7.3 Central Government Transfers 68.o 162.0 63.0 50.0 128.1 1i49.9 97.7 144.2 187.3 194.2 88.6 12.4 National Agrarian Institute (IAN) 2/4/ Total Ecpenditure n.a.. n.aa. n.. 171.3 225.4 23t.2 203.2 232.1 247.9- n.a. Central Govemnment TrarBfers 121.8 199.5 139 .3 107.8 15(.8 150.8 168.7 181 .6 177.3 203.4 172.4 5.9 Special Programs
Total E:cpenditur e 3/ 3/ 31/ 3/ 40.8 62. 0 61.9 75.9 76.0 75.0 36.o 8 130 Central Government Transfers 4C).O 62.0 61.9 75.9 76.0 75.0 36.0 13.C4/
Transfers to Agriculture as percent of Total Government ExpendiLtre: 7.76 7 .42 9.61 6.47 9.46 9.79 9.46 9.20 8P.35
1/ B&xiget proposals
2/ Es-timated
3/ Special programi expeniiture included urder MAC 4/ 1964-1 969 period only
'5/ Does not includie transfers to BAP' and lAN n.a. - not available oource: Compiled 'rom data supplied by COEMPLAN and principal agencies Table 16: PUBLIC EXPENDITURE IN AGRIOJLTURE, 1968-1969, BROKEN DOWNBY AGENCIES AND CLASS OF EXPENDITURE
(millions of bolivares)
1964 1965 1966 1967 1968 1969 Ar-agth Rate 1964-c9
Misintr,y of Agrioultore and liveesooa
Total 201.5 207.6 206.1 211.3 228.7 228.7 2.6
Corrent 163.0 656.6 169.2 168.X1 177.3 180.4 1.3 Capital 38.5 51.0 36.9 13.3 51.4 ll8.3 4.6 Fixed Investment 15.7 20.7 15.0 17.6 20.9 19.7 4.6 Other 22.8 30.3 21.9 25.7 30.5 28.6 4.6
Ministry of Public Works - Division of Hydraulic Works (MOP-LOH)
Total 171.0 159.3 224.5 644.3 209.1 226.2 5.8
Correct 8.4 7.6 5.8 6.o 6.1 6.2 -4.8 Capital i62.6 151.7 218.7 238.3 203.0 220.0 6.2 Fixed Investment 159.1 168.4 214.0 233.2 198.6 215.3 6.3 Other 3.5 3.3 4.7 5.1 4.46.7 6.3
Agriculture and Livestock Bank (BAP)
Total 635.6 672.9 688.2 4,99.1 590.5 618.i 7.3
Ca-rent 67.6 88.6 97.9 100.2 107.1 127.0 13.4 Capital 367.8 384.5 390.3 398.9 683.6 691.1 6.o Fixed Investrment 3.1 10.6 19.6 6.6 2.2 16.1 39.1 Credit Programs 219.0 215.0 226.6 241.8 224.3 235.6 1.5
Obligahano1 13.5 32.3 19.5 27.6 60.3 52.5 31.4 Other / 132.2 126.6 126.8 102.9 156.6 186.6 7.1
National Agrarian Institate (IAN)
Total 171.3 225.6 230.2 203.2 232.1 247.9_/ 7.7
Corrent 70.8 86.5 89.1 83.1 99.5 106.5 8.5 Capital 100.5 110.9 1).1.1 120.1 132.6 161.6 7.1 Fixod Investmeot 49.0 60.7 73.6 76.8 75.0 78.0 11.6 Obligations 5.3 8.6 7.3 11.2 22.9 25.0 36.3 Other 50.2 71.8 62.2 32.1 36.7 38.6 - 4.3
Speoial Programs
Total 40.8 62.0 61.9 75.9 76.0 75.0 12.9
Current 5.6 6.5 5.3 5.0 3.1 3.1 - 7.4 Capital 35.6 55.5 56.6 70.9 72.9 71.9 15.2 Credit Programs 35.4 5565 56.6 70.9 72.9 71.9 15.2
6 TOTAL - Expendit-res 1,020.0 1,127.2 1,210.9 1,233.8 1,33 .4 1,395.9 6.5
C-rrent 315.2 363.6 367.3 362.3 393.1 423.2 6.1 cap ) 70i4.8 783.6 8O3.6 871.5 943.3s 9O2.7 6 Fixed Investment 222.9 240.4 322.0 354.2 336.7 329.1 8.1 Credit Programs 256.4 270.5 283.2 312.7 297.2 307.5 4.5 Obligatiors 18.8 40.7 26.9 38.8 83.2 77.8 32.7 Other 208.7 232.0 -11.6 165.8 2216.2 25.3I-
TOTAL - Percent 100.0 100.0 100.0 100.0 100.0 100.0
C-rent 30.9 30.5 ~~~ ~ ~~~~29.29. ~ ~~~~ ~ ~~~~~~30.330.3 Capital 69.1 69.5 69.7 70.6 70.6 69.7 Fixed In-estment 21.9 21.3 26.6 28.7 25.2 23.6 Credit Program 24.9 24.0 23.6 25.6 22.3 22.0 Obliga'liono 1.8. 3.6 2.2 3. 6.2 5.0 Other 20.5 20.6 17.5 13.4 16.9 18.5
1/ Comp-oed of investment in inventories of domestic and imported agric3ltural produce.
2/ Esrt:.iated dat-
Sooce: Mission estimates based on data sopplied by CORDIPLIANand principal agemoics. Table 17: BUDGET RECUESTS OF AGRICLTURAL AGENCIES FUR 1970-1974
(millions of bolivares)
Average Annual Growth Rate 1970 1971 1972 1973 1974 1969-1974
(percent)
Minstr of griculture &Liveetook (MAC)
Totai 262.1 274.6 282.2 290.5 298.6 5.5
Current 189.9 189.8 191.7 194.5 195.8 1.7 Capital 74.2 84.8 90.5 96.0 102.8 16.3 Fixed investment 27.7 31.1 35.9 4.14 46.4 18.7 Oth- 46.5 ~~~~ ~ ~~~54.l5.6 ~ ~ ~~~ ~~~~~53-756.4 1.5
Mi.iOtry of Public Works Division of Hydraulic Work: (MOP-DOH)
Total 215.3 244.3 254.6 266.5 294.4 5-4
Cwrrent Capital 215.3 244.3 254.6 266.5 294.4 0.0 Fixed ihvestment t 215.3 244.3 254.6 266.5 294.5 6.5 Other
Agriculture &Livestock Bank (BAP) 2/ Totai 661.1 775.6 851.0 927.8 942.5 8.8
Current 120.5 113.1 112.9 125.3 130.0 0.5 Capital 550.6 662.5 738.1 802.5 812.5 10.6 Fixed imetesment 25.8 25.4 22.2 23.5 23.9 8.2 Credit programs 236.8 330.2 390.2 548.1 430.6 12.8 Obligations 89,.6 103.5 113.1 106.8 109.9 15.8 Other 188.4 203.4 212.6 224.1 258.1 5.9
Agricultoral Development Rank (BDA)
Total 150.0 167.0 178.0 193.0 208.0 _
Current 15,0 117.0 18.0 18.0 18.0 Capital 135.0 150.0 160.0 175.0 190.0 Credit programs 135.0 150.0 16o.0 175.0 190.0
Total 315.8 322.5 328.0 352.5 351.3 7.2
Current 93.0 83.7 75.4 79.9 84.8 - 3.8 Capital 222.8 238.7 252.6 262.6 266.5 13.5 Fixed investment 139.9 136.8 141.7 137.8 122.6 9.5 Obligations 27.0 19.5 9.2 4.7 15.5 - 6.7 Other 55.Y 82.5 101.7 120.1 128.5 27.2
Special Prograne
Total 75.0 82.9 92.3 103.3 116.2 9.1
Currect 3.2 3.3 3.3 3.4 3.5 2.5 Capital 71.8 79.6 89.0 99.9 112.7 9.4 Credit programs 71.8 79.6 89.0 99.9 112.7 9.4
Special Projects
Total 163.8 219.1 213.5 196.0 46.0
(IRIDA) (127.0) (119.8) (112.0) (106.9) ( - (DELTA) ( 17.0) 24.3' ( 26A.11) 21.92) 21.21 (Marketing) ( ) 57) 55) ( 48.3) ( 19.0) (Animal health) ( 19.8) ( 20.3) ( 20.6) ( 19.6) ( 5.8) Current 5.2 4.5 4.5 4.5 4.5 Ce,,itca a58.8 oi4.6 200cc191.5 41.5_ Fixed investment 94.2 97.0 90.4 81.8 16.2 Credit programs - - - - - Obligatiom 5.9 5.8 5.9 5.8 Other ~~~ ~ ~ ~~~~~111.8 ~ -2.7~~58.7 1392.
TOTAL 1t843-l 2.085.9 2,199.6 2,319.6 2.257.0 10.1
Current 424.6 411.4 405.8 425.6 536.6 0.6 Capital 1,518.5 1,674.5 1,793.8 1,894.0 1,820.4 13.4 Fixed iv estment 502.9 534.6 544.8 551.0 503.5 8.9 Credit programs 443.6 559.8 639.2 723.0 733.3 19.0 Obligations 122.5 128.8 128.2 117.3 125.5 10.0 Other 349.5 451.3 481.6 502.7 558.2 12.1
1/ The remainder Of the PRMDA pro.iect (bs.350.3 million) is included in the prograns Of hAC, MOP, BAP and IAN.
21 Includes share of P8IDA project.
Source, CORDIPLANand individual agencies. Table 18: MISSION ESTIMhATES OF PU3LIC EXPENOITURES IN AGRICULTURE, 1970-74
Avera.ge Annua 1970 1971 1972 1973 1974 Growth Rate _ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~1969-1974 millions of bolivares ) (percent)
Minist.-y of Agriculture a. ietok(A)1
Total 232.4 237.2 242.1 247.2 252.14 0.9
CLr-ert i85.1 189.9 191'.s 199.91 205.1 2.6 Capital 47.3 47.3 07.3 47.3 47.3 0.0 Fined Isnestment 19.2 19.2 19.2 19.2 19.2 0.0 Other 28.1 28.1 28.1 28.1 28.1 0.0
Ministry of Public Wod,ks - Division of Hydraolic Works (MOP-DOH) 6!
Total 2127 ±15. 16i.2 i44.3 111.5 -4.3
Currant 6.3 6.3 6.3 6.3 6.3 0.3 Capital 206.4 151.6 154.9 138.5 1O5.2 -4.4 Pined Invetstment 222.2 147.9 15i.i 135.1 101.2 -4.4 Other 4.2 3.7 3.5 3.1 4.0 -2.8
Agricultore and Livestock Bark (BAP) _/
Total 518.5 519.9 531.6 547.6 560.2 -1.7
Current 220.5 106.9 107.2 126.4 135.9 1.4 Capital 398.0 413.0 424.1 421.2 4243 -2.4 Fixed nvestmen t 6.5 9.9 11.3 12.6 9.1 -7.4 Credit Prograrrs 121.0 121.0 121.0 121.0 121.0 -8.3 Obligations - 86.3 94.5 99.4 88.1 86.2 10.3 Other R/ 184.2 187.6 192.7 199.5 208.0 3.2
Agricultural Development Bank (BDA) -/
Total 117.5 139.5 139.8 140.2 140.5 -
Current 5.6 6.6 6.9 7.3 7.6 Capital 111.9 132.9 132.9 132.9 132.9 Credit Programs 111.9 132.9 132.9 132.9 132.9 -
National Agrarian Institute (IAN) 7/
Total 248.1 246.2 211.8 243.5 260.7 1.0
Current 111.8 117.4 123.3 129.5 135.9 5.0 Capit.ul 136.3 128.8 118.5 114.0 121.8 -2.3 Fixed IS-veetvvnt 86.8 58.8 58.8 58.8 58.8 -1.5 Obligations - 27.0 19.5 9.2 4.7 15.5 -6.7 Other 50.5 50.5 50.5 50.5 50.5 -0.9
Special Progranm 8/
Total 50.1 50.1 50.1 50.1 50.1 -5.9
Current 3.0 3.0 3.0 3.0 3.0 -0.7 Capital 47.1 47.1 12.1 47.1 17.1 -6.1 Credit Programs 47.1 47.1 47.1 47.1 87.1 -6.1
Special Projects 9/
Total 99.1 205.0 218.2 212.5 166.5 -
(PRILA) (94.1) (785.2) (197.9) (191.9) (146-9) - (Delta) ( ) (Marketing) (-) (-) (-) V) ) - (sAni.n ealth) C5 0c n8o 02 I en / on20 A( (1o Al- Current 15.6 33.2 36.9 37.6 18.4 Capital 83.5 171-8 181 .3 174.9 148.1 Fined Inve-stset 58.1 106.8 111.5 101.7 103 . Credit Progr^-s ~~~ ~ ~ ~~~39 4 ~ ~~~~17.54,3.6 43.8 21.7 Obligations 4/ 22.9 5.8 5.9 5.8 3.0 Other 5.0 19.8 20.3 20.6 19.6 -
Totl 31178.4 1617.8 2584.8 1585.9 1541.9 2.2
Currer.t 447.9 4G3.3 478. 51O.O 512.2 3.9 Capital 1030.5 1154.5 1106.4 1075.9 1029.7 1.5 Fixed lnvestment 314.8 312.6 352.2 330.4 292.1 -1.2 Credit Programe 297.5 340.1 3.44.6 344.8 322.7 1.0 Obligations 116.2 119.8 114.5 98.6 104.7 6.1 Other 272.0 289.7 295.1 302.1 310.2 3.7
Footnotes: See following page.
Source: Mission estimates. Footnotes to Table 18
1/ These are based on the assTmption that current PxYnenditures -will grnw at the historical rate of 2.6 percent annually, while capital expenditure is tn hp frozen a+. the 1Q67-68 aveprage=
21 These are based on +he assQiimn.tiin that eurrent costs will remaqin static and that construction will be restricted to projects in progress and .small irrigantion qsrcz+.pmc. Alt+hogh no now cosructi+on TZill bhcrin expenditure on studies is estimated at 20 percent of construction costs - a propotion sligh+tly above the historical rate. Other costs are assumed to grow more slowly than the historical rate.
3/ These are based on the assumption that salaries will drop in 1971, with
Inhe-+r ansfer U±1L04.~ tJ±tAI ¼...of tecomuMerci^'porolvii.- +o the BDA, and _hreftr_s ~'.fIU*C~l I..O..L.. J¼,L ). ¼,.J.I L1.J U1.~ JJ./ OLLI ULI.IAM< ta4. U~L ± -UO'; at 5 percent; that other current expenditures will follow BAP's own projec+ions (a s inrae exce-p-4- for debt se-rvcing, c -i' decline in 1971 following amortization in that year); that the purchas3e ofP prod(4uUe wil'' in4ras the4at hitrla rat of 7.8 agriLcu1tu-Ural¼/i O.~LLUILLUL.L0.J.IJ.L~JL±UL~ W± L. L± -L-UCLS.e' d.I. UIAI ilJOIIL,LU01 JI..± Id.L 1.5, 01J I *U percent, i.e.more slowly than BAP's own projections, to make allowanac .U.±- U1115 q:e ±sL,Lt U tiLJ. VVt5.1L1JULU5 Yt -LLL. UII£LL~1- )LtXPJULLUU .LU11 II, 841d 1.J. 1 UbL will decline at the rate projected by BAP; that no further construction of silos wiLl take place except under PFrDA, whiLch is accounted for separateLy; that credit programs will remain at Bs.121 million for srall farmer loais, that PRIDA loans are accounted for sep arately, and that credit program for commercial farmers will be separately, and hlat credit program for commercial farmers wiii be completely transferred to the BDA in 1970; that debt servicing and amortization and the c:ost of guarantees and mortgages will grow as projected by BAP; and that the cost of storing surplus prodiction will increase only at 2 percent; annually, to allow for the effects or government policy on rice production. The overall effect is a substantial reduction of BAP's own projections, which estimate a total expenditure of Bs.95?.2 million in 197h.
4/ This cove!rs amortization of internal and external public and private tebt.
~/ This includes investment in inventories of domestic and imported produce.
6/ The credit program of the BDA is assumed to be that of the commercial portfolio previously handled by ]3AP, at its 1967-68 level, but with the addition of a Livestock Development Program.
7/ These are based on current expenditures growing at 5.0 percent annually (compared to the historical average of 6.4 percent) and fixed investment remaining constant at the 1967-68 level. The cost of amortization ("obligations") is taken from IAN's own projections. 8/ It has been assumed that the Fruit and Coffee and Cocoa Development Programs will continue at the 1969 levels of Bs.i4. million and Bs.26.1 million, respectively. The Livestock Development Program is not bound to be continued but some further expenditure seems likely, and Bs.20.0 million annually has been estimated.
9/ These projects are preferred by the Government and are likely to be given priority. Nevertheless, part of the Delta and the Commercializa- tion projects have no guaranteed financing, and will have to be sacrificed if the fiscal restraints become severe. The PRIDA program has been moved back a year and the Animal Health Program has been similarly postponed to reduce expenditure in 1970.
Source: Mission estimates. Taole y:. iDA-PLANNEDANNUAL EbXPE.NDLTJf3 f1SU3i-ThW;S
Year 1 Year 2 Year 3 Year 4 TOTAL
1. Set-tlcmentv consolidation 35.0 35.,. 27.3 15.9 113.6 - current -capital (fixed) 3'5.0 35.4 27.3 15.9 113.6
2. Rcsea-;ch 13.3 __6_. _ 17.__ 11, 2 5P, *-curren't TW.Th--)LL.I I177 ( ) - 1,9,/ -coapital(fixed) 3.5 4.3 4.8 3.0 15.6
3. Evtcnsion 11.1 ll.8 18.7 23.? 67.8 -cuarr en'l-, ~ u>#.7 ,0f.LJ75 L_) . I' __)7.'I -capiltal(fixed) 4 6 6.1 7.8 9.6 28.1
4. Credit 38 ° 8 13.7 _ 43.7 166.0o -current . -capi-tl.al(ciedits) 314.8 43.8 43.7 43.7 166.0
5. irrir-ation 27.5 5i.7 51.6 51.6 182.14 -curre•T.t ------capital(fixecd) 21.5 51.7 51.6 51.v F,I`.i
6. 1Roads 26.3 b6.1 12.2 _ 25.1 _lLO.C -curren+t -capital (fixed) 26.3 116.1 12.2 25,4 1:LO.O
7. Silo constnic'tlion 19.3 1.5.5 - - 3L8 -current -caiyital (f4 xed) 19 -. 1 5 - - *:31 8
3 Tv1.,i3n 1,3 1,20 1.0 -current 1.2 1.1 0.9 0.9 i1 -cap.it,al(fxd n,0 0.1 0.1 0.1 0,14
9e l' 4 ,o _ 1rQ r -ob'1 :)!tions 9378
10. Cotlhers 1/ 13.8 13.6 1.3. 8 141.0°5* 2 -curren3t 13.3 133 C"4 1) ..0C 5 .4.
TOTAL 1883. 2143.991.8 19-2.0 816.0 -current 31.3 31 3J76 3(i -c.apit.a.l l.57,.0 2C)8i. A3'i ",3.4 J.5. (IYI . 3 -fixed 16-.3 Jv9 .2 10lo) 1. -credi.t p:-ogr:ns 34.d8 13.8 143.7 43.7 1('.() -obl:tgat:ions 5.9 5.8 5.9 5.8 23.14
4/ Jncludes coordination, continnericics and supolvicion
Souvce: Calculated frcm da2ta sLippi.cd by CD120iHLA Table 20: PfJIDA- PlAN1N1.ED FTNANCIhJ.G BY SUB-FYIOGRAiMS (ni].lio ns of ')OlJ.1rareS)
Year 1 Year 2 Y5ear 3 Year 4i TOTA L
1. Soettleiment consolidation 35.0 35.1I 27.3 15.9 113.6 -gUovernmne-iU r. .4 ±. t 7.u 5 ).- -ID.3 27.5 15.0 115 6.3 60.3
2. Res5arch 13.3 16.0 17. 8 1l. 2 58. 3 -govrnlment 0.0 o.( 11 -IDB 6.7 I1-h 6.0 4.5 21.6
3. Extension 11.1 1Lb8 18.7 23.2 67.8 -gover'nmant b.2 1l1.7 16.2 20.7 -IDB 2.9 3,1 2.5 2.5 11.0
II. Credit 34.8 _ 143.8 h3.7 23.7 i66.o -governrment 19.7 2 F7 8,- ,F'6. _3 -]DB 15.1 15.0 15,0 15.0 60.1
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