Agricultural supply marketing system in El Salvador

THE INFORMATION WAS GATHERED THROUGH IN-DEPTH INTERVIEWS WITH IMPORTERS, WHOLESALERS, RETAILERS, AND STAFF MEMBERS OF PRIVATE INSTITUTIONS AND ALL GOVERNMENT AGENCIES INVOLVED WITH THE DISTRIBUTION AND SALES OF AGRICULTURAL INPUTS. EMPHASIS WAS PLACED ON FERTILIZERS, SINCE FERTILIZER PURCHASES ACCOUNT FOR 70 PERCENT OF SMALL FARMERS" EXPENDITURES FOR INPUTS. THEY USE AN AVERAGE OF 133 KILOGRAMS PER HECTARE OF LAND -- ONE OF THE HIGHEST RATES IN THE HEMISPHERE. THE PRIVATE-SECTOR MARKETING SYSTEM FOR FERTILIZERS IS EFFICIENT. FARMERS PAY A FAIR RETAIL PRICE C69.00 PER 100-KILO SACK OF 20-20-0 FERTILIZER. THIS IS ONLY 5 PERCENT ABOVE THE IMPORT PRICE, AND 15 PERCENT LESS THAN THE EQUIVALENT PRICE IN GUATEMALA. BECAUSE OF SUPPLY AND PRICE FLUCTUATIONS OF FERTILIZERS IN 1973-1974, THE GOVERNMENT IN 1975 INTERVENED BY IMPORTING 31,000 TONS OF FERTILIZER AND DISTRIBUTING IT AS CREDIT IN-KIND TO INDIVIDUAL FARMERS AND GROUPS OF FARMERS. IF THE GOVERNMENT CONTINUES THIS POLICY, IT MAY WELL SERIOUSLY DAMAGE THE PRIVATE-SECTOR MARKETING SYSTEM. NO USAID LOAN FUNDS SHOULD BE EMPLOYED TO FINANCE THE GOVERNMENT IMPORTATION OF AGRICULTURAL INPUTS OR GOVERNMENT FACILITIES FOR HANDLING OR STORING THEM.