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Abstract
This paper investigates a central part of the argument that agricultural assistance by the United
States to developing nations leads to diminished export markets for U.S. farmers. A sizeable cross
section of low-income and lower-middle-income nations is used to provide statistical analyses of:
( 1) the link between agricultural productivity and economic performance, and (2) the link between
economic performance and agricultural imports. The results show that a reasonably strong
case can be made for the idea that advances in agricultural productivity are associated with longrun
increases in imports of cereals and other agricultural products by less wealthy nations. The
connection comes via the positive income effect of general economic development. For these countries,
investments in agricultural development through successful assistance are not detrimental
to U.S. farm export interests in the long run. They are generally beneficial.
For middle-income nations, the case is less clear and more controversial. However, nothing in
the cross-section data used suggests that farm productivity improvements in these nations is
systematically threatening to U.S. agricultural trade in the long run.