SOUTHERN JOURNAL OF AGRICULTURAL ECONOMICS JULY, 1977 SUPPLY RESPONSE BY TRADITIONAL AND COMMERCIAL PRODUCERS OF BASIC GRAINS IN LDCs*

Traditional farms can play an important role in MODEL DESCRIPTION the agricultural development process [4, 6, 7, 8]. Less developed countries (LDCs) emphasize produc- The environment in which a traditional farmer tion and productivity increases for basic grains by lives determines his consumption and selling deci-relying on modern yield-increasing technology [2]. sions. Many grow basic grains mainly for home Technological advance, however, may produce consumption. At harvest time they dispose of their diverging results; productivity may increase while production in several ways. A large share is kept for production stagnates or declines. Due to both major family consumption and other noncash purposes such seasonal and cyclical price fluctuations in basic grains as feed, seed and payments in kind. Part may be sold and income limitations, traditional farmers in LDCs at harvest time or throughout the year as cash is choose, quite rationally, to grow only enough of needed and/or high prices stimulate sales. some food crops for home consumption. Yet policy The hypothetical price-income-consumption makers often seek to increase the marketed supply of (PIC) path developed in Figure 1 (A) illustrates the food crops and to determine possible changes in land traditional farmer's consumption and selling decisions utilization to meet that objective. and is used to develop his market supply curve for