6

demand interactions which link the various components into a "semi-closed"

system. It is semi-closed because it does not include an export market

component nor an explicit linkage to the other sectors of the domestic

economy. These components could be added to the model but for the purposes

of this chapter they have been set aside. The middle column in the figure

lists a series of actions that might be taken by the public sector to bring

about desired changes in the food system, giving emphasis to those actions

which will affect market organization and performance. An interrelated set

of impacts on costs, demand and output are summarized in the right hand

column of Figure 1. The model illustrates a particular sequence of actions

that work back from the urban food market toward farm producers. However,

there are many alternative sequences that could begin with any of the system

components as long as there is adequate consideration of the pattern of

repercussions that will likely occur. For example, demand from the rural

purchased food and other basic consumer goods component has a direct pull

effect on rural production and assembly components. And to the extent that

there is regional specialization of agricultural production in a country,

there is a direct linkage between rural demand and urban food distribution

components which serve as concentration and redistribution mechanisms for

the more specialized rural regions.

 In the past there has been a strong tendency for agricultural planners

to emphasize farm production expansion without sufficient consideration of

market incentives and constraints, whether these come from rural or urban

demand sources.

 Thus, Figure 1 illustrates a more comprehensive, market oriented approach

to agricultural development emphasizing the dynamic interactions between

agriculture and industry and between rural and urban based activities.