Investment for food

Abstract

Groenveld attempted to show the magnitude of investments in agriculture, which were necessary to meet the increasing world demand for food. The formula S = K/Y (ΔN +ΔH) was assumed as a description that for a community the proportion of national income saved and invested must equal the product of proportional increase in population plus increase in income per head, and of the capital coefficient. Thus ensued the problem of allocating investments in agriculture and other sectors of the economy. In private investment decisions involved many people. For public investment decisions were usually central. But public complemented private investment. The figures for future demand for food were based on population size and estimated population growth, income per head and expected increase of it and income elasticity of food costs. Changes in supply through rise in production from an increase in productivity were distinguished from changes through enlargement of agricultural area. Extrapolation of production from the period 1950-60 until the year 1980 showed that investments in Asia (other than China and the Soviet Union), Africa and Latin America should be about 10% higher to keep pace with demand for agricultural products. Groenveld believed the solution could be to raise public investment, which he then estimated to be about the same size as the private investments