Blandford, D. and Plocki, J.A. von
(1977)
Evaluating the disincentive effect of PL480 food aid: the Indian case reconsidered.
Other.
New York State College of Agriculture, New York.
Abstract
After a review of previous models in this field it is put forward that a meaningful model should at a minimum include four blocks of functional relationships and a set of model-closing identities. A model of the Indian cereals market is therefore specified and developed under the following headings: (1) supply, (2) demand, (3) income generation, (4) market balancing (imports and stocks), (5) identities. This appears to support the argument that food aid may not have a universally beneficial impact on the recipient nation's economy. It indicates that for the sample period 1952-68 one unit increase in aid leads to a reduction of domestic production of 0.15 units and increases net consumption by only 0.66 units. While these results are considered more reliable than those from earlier studies it is pointed out that there are still considerable dangers in using such a highly aggregated model based on one country at one period of time for policy purposes in India or other developing countries
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