Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81407
Authors: 
Lundahl, Mats
Sjöholm, Fredrik
Year of Publication: 
2012
Series/Report no.: 
IFN Working Paper 929
Abstract: 
Timor-Leste’s first ten years of independence have been turbulent and a large share of the population remains poor. Broad-based improvements in living standards will require improvements in agricultural production since most Timorese are subsistence farmers and since there is no modern sector to absorb a fast-growing population. This paper discusses what determines agricultural development in Timor-Leste and how such development can be achieved. This is done in two steps. The first one takes the production function as its point of departure. Agricultural output is seen as a function of inputs (land, capital and labor) and technology, which in turn are influenced by the infrastructure and institutions of the economy and by external factors which cannot be influenced by policy measures. The second part, in turn, emphasizes the fact that Timor-Leste is a market economy. A model of an agricultural household is constructed. The static optimum of the household is derived and the effects on production, consumption, sales, income and leisure of the household of different price incentives (changes in food prices, cash crop prices and prices of manufactured goods) are investigated.
Subjects: 
Timor-Leste
Agriculture
Poverty
Development
Rural
JEL: 
O13
Q15
Q18
Document Type: 
Working Paper

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