The design of an agricultural credit system for small farm families in Liberia

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Date

1985-03

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University of Illinois

Abstract

Liberia, which became independent on July 24, 1347, is located on the West Coast of Africa bounded on the south by the Atlantic Ocean, north by Guinea, west by Sierra Leone, and east by the Ivory Coast. Liberia did not achieve any significant economic growth until the post World War II period. In order to accelerate this growth process, President W.V.S. Tubman launched the Open Door Policy Program to entice foreign investment and skilled man­ power for the development of iron ore mining, cocoa and rubber plantations and other vital industries. As a consequence of this program, the monetary sector of the Liberian economy grew quite rapidly between 1950 and the early 1970s. an estimated per capita income of $530.00 in 1982.1 Liberia had However, the pattern of growth which evolved from the iron ore, rubber and cocoa concessions left the vast majority of the population unaffected; for example, while the enclave sector produces a per capita GNP of $1,620, the large majority of the population which lives in the rural sector has a per capita income of about $160. 2 This rapid economic growth rate of the economy became relatively stagnant as a result of the falling prices of iron ore, cocoa, coffee and rubber prompted by international economic conditions of the 1970s. As a result of world price fluctuations of these major exports, which made government revenue uncertain and vulnerable, the government had to search for potential new sources of growth. Agriculture was identified as a potential source of growth that had not been adequately explored.

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Keywords

Agricultural credit design, Agricultural credit system, Small farm families, Liberia

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