Foreign capital and technology in the case study subsectors

3.57 Foreign capital, technology, training, and management skills have played an important role in the development of many of the focal commodity systems, especially during their initial 'take-off' stages. The primary roles of foreign companies or international donor agencies is summarized in Table 17.

Table 17: Foreign Capital and Technology in Commodity System Development

3.58 In virtually all of our focal cases in Latin America, credit from foreign distributors or direct foreign investments in production and/or processing and marketing facilities played a major role in the initial subsector growth. It was less important in our other cases (except for Thai poultry) and generally occurred in later stages of subsector development, serving to alleviate an existing bottleneck (e.g. feed shortages and high prices in the Chinese shrimp industry) or to augment the operating capacities of already competitive industries. In all of the focal cases, local companies have continued to account for a majority of exports, with multinational corporations accounting for 25 % or more of exports only in four cases-- Chilean fruit, Thai poultry, and Brazilian FCOJ and soybean.

3.59 Most of the subsectors initially relied upon imported technologies in the forms of planting materials, seed and breeding stocks, tractors, and processing plant and equipment. In most cases, at least some of these inputs and technologies were subsequently produced locally, either through licensing arrangements or through direct investments by international suppliers. Transfers of important technologies have also taken place through university or private training programs and joint or foreign programs of food technology R&D. In this regard, the most notable case is that of Chilean fruit

3.60 Bilateral or multilateral development finance organizations appear not to have played any role in directly supporting production and marketing of the focal commodities. However, at least in the cases of Israeli citrus, Chilean fruit, and Brazilian soybeans and FCOJ, loans or grants from such institutions did contribute to the development of production, marketing, and/or transport infrastructure (e.g. irrigation facilities; rail/port facilities) which was subsequently used for the focal commodities, among others.