Debt Crisis in Developing Countries Hurts U.S. Agriculture

Developing countries must be able to increase their exports if they are to generate revenue to retire their debts and increase agricultural imports. Most developing countries are net exporters of agricultural products, but they have also been major importers of those U.S. commodities that they are unable to produce. The current debt crisis has caused many developing countries to meet their debt obligations by reducing both their imports and their investment in domestic industries that produce goods for export. These actions have reduced income in both developing and developed countries, limiting the developed countries' ability to increase their imports of products from the developing countries. Many developing countries have renegotiated their debts, prolonging but not solving the repayment problem. This report reviews the events that created the debt crisis, its effect on the world economy, and some possible solutions to the situation.