deteriorating situation of the mountain peasantry became a defense problem, did this question of 'rural exchange' receive high priority in the Economic Programme of the government [SPP, 1985]. Agrarian investment in the 1980-84 period was maintained at a high level, equivalent to about half the national total. This was almost exclusively concentrated on the APP: that is, in about half the modern sector or about a quarter of the whole of agriculture. This investment included extensive irrigation works, imports of tractors and combine harvesters, coffee reno-vation, a sugar mill, palm oil plantations, intensive dairy and beef breeding units, as well as the recapitalisation of the new state farms ruined by their previous owners. It formed part of a long-term strategy discussed below and thus did not itself add much to production during the first five years, although it did help compensate declines in the large private production sector. Given the external terms of trade (which had deteriorated by 40 per cent between 1977 and 1983 [CEPAL, 1984]) and the gradual recovery of production, the agricultural sector was not in a position to generate a sufficiently large surplus to finance its own investment. Even though the sector generated three times more exports than it absorbed imports [MIDINRA, 1985], the foreign exchange thus released was needed to maintain basic consumption elsewhere in the economy. Similarly, food supplies over and above the requirements of the agrarian workforce were needed to maintain the rest of the population; there was no significant capital goods sector to absorb these wagegoods [FitzGerald, 1982]. Thus, this investment was basically financed from abroad, initially with long-term development loans from multilateral institutions, but as US agression increased these funds were cut off and replaced by commercial credits from both capitalist and socialist suppliers. This was economically justifiable in that the increment in exports (or substituted imports) would have a compensatory balance of payments effect within a few years. Eventually, however, a net exchange surplus would have to be generated so that agroexports should expand more rapidly than domestic foodstuffs rather than the reverse, as had been the case between 1980 and 1984, when popular living standards had a higher priority than the trade balance. None the less, the major shortcoming of this accumulation model was undoubtedly its almost exclusive concentration on the APP as the focus of modernisation. Large private farmers might not wish to invest, but the middle farmers and the co-operatives were also neglected in machinery assignment, cattle restocking, and irrigation equipment. The political objective of preventing the re-emergence of capitalist accumulation or the reconstruc-tion of a rural bourgeoisie (albeit on a petty scale) appears to have been the main justification. However, the cost in terms of production was high, and in any case such a sector could have been simply controlled through the existing fiscal, banking and commercial mechanisms, let alone the eventual application of the Agrarian Reform laws.

DOI link for deteriorating situation of the mountain peasantry became a defense problem, did this question of 'rural exchange' receive high priority in the Economic Programme of the government [SPP, 1985]. Agrarian investment in the 1980-84 period was maintained at a high level, equivalent to about half the national total. This was almost exclusively concentrated on the APP: that is, in about half the modern sector or about a quarter of the whole of agriculture. This investment included extensive irrigation works, imports of tractors and combine harvesters, coffee reno-vation, a sugar mill, palm oil plantations, intensive dairy and beef breeding units, as well as the recapitalisation of the new state farms ruined by their previous owners. It formed part of a long-term strategy discussed below and thus did not itself add much to production during the first five years, although it did help compensate declines in the large private production sector. Given the external terms of trade (which had deteriorated by 40 per cent between 1977 and 1983 [CEPAL, 1984]) and the gradual recovery of production, the agricultural sector was not in a position to generate a sufficiently large surplus to finance its own investment. Even though the sector generated three times more exports than it absorbed imports [MIDINRA, 1985], the foreign exchange thus released was needed to maintain basic consumption elsewhere in the economy. Similarly, food supplies over and above the requirements of the agrarian workforce were needed to maintain the rest of the population; there was no significant capital goods sector to absorb these wagegoods [FitzGerald, 1982]. Thus, this investment was basically financed from abroad, initially with long-term development loans from multilateral institutions, but as US agression increased these funds were cut off and replaced by commercial credits from both capitalist and socialist suppliers. This was economically justifiable in that the increment in exports (or substituted imports) would have a compensatory balance of payments effect within a few years. Eventually, however, a net exchange surplus would have to be generated so that agroexports should expand more rapidly than domestic foodstuffs rather than the reverse, as had been the case between 1980 and 1984, when popular living standards had a higher priority than the trade balance. None the less, the major shortcoming of this accumulation model was undoubtedly its almost exclusive concentration on the APP as the focus of modernisation. Large private farmers might not wish to invest, but the middle farmers and the co-operatives were also neglected in machinery assignment, cattle restocking, and irrigation equipment. The political objective of preventing the re-emergence of capitalist accumulation or the reconstruc-tion of a rural bourgeoisie (albeit on a petty scale) appears to have been the main justification. However, the cost in terms of production was high, and in any case such a sector could have been simply controlled through the existing fiscal, banking and commercial mechanisms, let alone the eventual application of the Agrarian Reform laws.

deteriorating situation of the mountain peasantry became a defense problem, did this question of 'rural exchange' receive high priority in the Economic Programme of the government [SPP, 1985]. Agrarian investment in the 1980-84 period was maintained at a high level, equivalent to about half the national total. This was almost exclusively concentrated on the APP: that is, in about half the modern sector or about a quarter of the whole of agriculture. This investment included extensive irrigation works, imports of tractors and combine harvesters, coffee reno-vation, a sugar mill, palm oil plantations, intensive dairy and beef breeding units, as well as the recapitalisation of the new state farms ruined by their previous owners. It formed part of a long-term strategy discussed below and thus did not itself add much to production during the first five years, although it did help compensate declines in the large private production sector. Given the external terms of trade (which had deteriorated by 40 per cent between 1977 and 1983 [CEPAL, 1984]) and the gradual recovery of production, the agricultural sector was not in a position to generate a sufficiently large surplus to finance its own investment. Even though the sector generated three times more exports than it absorbed imports [MIDINRA, 1985], the foreign exchange thus released was needed to maintain basic consumption elsewhere in the economy. Similarly, food supplies over and above the requirements of the agrarian workforce were needed to maintain the rest of the population; there was no significant capital goods sector to absorb these wagegoods [FitzGerald, 1982]. Thus, this investment was basically financed from abroad, initially with long-term development loans from multilateral institutions, but as US agression increased these funds were cut off and replaced by commercial credits from both capitalist and socialist suppliers. This was economically justifiable in that the increment in exports (or substituted imports) would have a compensatory balance of payments effect within a few years. Eventually, however, a net exchange surplus would have to be generated so that agroexports should expand more rapidly than domestic foodstuffs rather than the reverse, as had been the case between 1980 and 1984, when popular living standards had a higher priority than the trade balance. None the less, the major shortcoming of this accumulation model was undoubtedly its almost exclusive concentration on the APP as the focus of modernisation. Large private farmers might not wish to invest, but the middle farmers and the co-operatives were also neglected in machinery assignment, cattle restocking, and irrigation equipment. The political objective of preventing the re-emergence of capitalist accumulation or the reconstruc-tion of a rural bourgeoisie (albeit on a petty scale) appears to have been the main justification. However, the cost in terms of production was high, and in any case such a sector could have been simply controlled through the existing fiscal, banking and commercial mechanisms, let alone the eventual application of the Agrarian Reform laws.