ABSTRACT
Agriculture is often thought of as a lever of economic growth, particularly after a country’s currency has depreciated. Because the output of agriculture is tradable, currency depreciation implies a rapid increase in producer prices. Costs, however, should increase more slowly, because of the importance of labour and land in production. These production factors are relatively non-tradable and therefore, in theory at least, less affected by inflation. East Asia’s recent currency depreciations should thus make its agriculture more competitive, abroad as well as at home. Exports in tradable agricultural sectors should rise, while imports from developed countries should decline, because of increased competition as well as reduced demand (Mohan, 1998).
