Drug Policy and Agriculture

Between 1988 and 1990, the Agency for International Development's (AID) mission in Bolivia proposed to provide assistance for growing soybeans and citrus as alternatives to coca. In 1990 the Overseas Private Investment Corporation proposed that it be allowed to consider providing aid to citrus projects in Andean countries. The proposals were not approved, and the Department of Agriculture opposed such assistance. Since passage of legislative exemptions in late 1990, the AID mission in Bolivia has started to provide small amounts of aid to soybean and citrus growers. In 1991 a high-level interagency team proposed that the Overseas Private Investment Corporation be allowed to help soybean and citrus projects in Andean countries; the proposal was not approved. Despite concerns that Bolivian and Peruvian soybean and citrus crops might compete with U.S. crops, Bolivia's and Peru's current production and exports are insignificant. Obstacles confront Bolivian expansion of soybean production and exports. Even if successful, Bolivian soybean exports would represent only a small share of world trade. Peru is not expected to be competitive in world soybean markets. As for citrus crops, especially frozen concentrated orange juice, neither Bolivia nor Peru is expected to become a significant competitor.

GAO found that: (1) although the Agency for International Development (AID) proposed to provide assistance to Bolivia for growing soybeans and citrus, the Department of Agriculture (USDA) prohibited AID from using federal funds to support Bolivian soybean production; (2) USDA opposed such AID efforts because it believed that such assistance would place Bolivia at a competitive advantage over the United States; (3) in 1991, the Overseas Private Investment Corporation (OPIC) proposed that it be allowed to consider providing aid to citrus projects in Andean countries, but USDA opposed such assistance on the grounds that it would result in increased competition with the U.S. citrus industry; (4) following the enactment of legislative exemptions in 1990, AID began providing minimal aid to Bolivian citrus producers; (5) in 1991, a high-level interagency team proposed that OPIC be allowed to extend its assistance to soybean and citrus projects in the Andean countries, but USDA opposed this recommendation and the team later dropped the proposal due to anticipated congressional opposition; (6) despite concerns that Bolivian and Peruvian soybean and citrus crops might compete with U.S. crops, their current production and exports are insignificant; (7) although Bolivia has the potential to expand soybean production and exports considerably if it overcomes major obstacles, even if successful, Bolivian soybean exports would represent only a small share of world trade; (8) Peru is not expected to be competitive in the world soybean market; and (9) neither Bolivia or Peru is expected to become a significant competitor in exporting citrus crops.