Figure 1.5 Economic characteristics of maize and soybean production in Iowa, 1972-98: (a) yields, (b) non-land production costs, (c) prices, (d) gross returns, (e) returns above non-land production costs, and (f) herbicide costs as percentages of total non-land production costs. Prices, costs, and returns have been adjusted for inflation using the Consumer Price Index of the US Bureau of Labor Statistics (base period: 1982-4). Production costs are for machinery, seeds, pesticides, fertilizers, and labor. Gross returns have been calculated as the product of state average yields (Mg ha-1) and prices ($ Mg '). Sources: Duffy & Vontalge (1998 and previous years), and M. D. Duffy, Iowa State University, personal communication (2000).

(1990, pp. 81-128) noted three important contributing factors: (i) low domestic prices for farm products because of government policies that keep food inexpensive for urban consumers; (ii) low international prices for export crops because of surplus production; and (iii) high costs for farm production inputs, most of which are imported. In constant dollars, prices for agricultural commodities produced in developing countries, including maize, wheat, rice, cacao, coffee, palm oil, rubber, sugar, and tea, fell about 50% in the international marketplace from 1980-82 to 1990-92 (Pretty, 1995, pp. 54-5). The net result of these factors, combined with the volatility of international commodity prices, is economic insecurity for many farmers in developing countries.

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