PROJECT REVIEW - DIVERSIFICATION AND TRADE IN LATIN AMERICA

Review team focused on accomplishments, work methods & recommendations. With available rsrch findings, the project leader could neither analyze alternative means & costs of transporting & distributing vegetables from production zones nor evaluate domestic demand & consumption compared with export demand. Project leader also found that vegetable storage & preservation could become important if domestic per capita income & employment increased. However, lack of domestic demand for fresh vegetables precludes using statistical estimates at present. Alternative commodity transport to export markets & quality control cost returns need evaluation. Export market potential estimates must incorporate cost & volume effects of tariffs & quotas. At ten times production cost, export marketing is high risk, and the exporter bears the entire cost of price decline, spoilage loss, waiting time, and market close-out. Export expansion depends on 50% yield increases, 50% reduced production costs, introduction of quality control, volume markets, and large scale operations integration. Knowledge of markets, prices, and trade terms is required in comparative advantage studies of economic alternatives. Phase I could have better established how vegetable production really was & its direction; then could have better judged what needed to be found out & how to find it. Some data & country participation expectations were unfeasible. Small farmer participation could have been ruled out. The statistical demand estimation models and the quadratic programming model containing vegetable production & demand function data for various countries need to be explained to LDC planners. Recommendations are to distribute a technical appendix explanation of the demand estimation model and prepare a digest of project materials.