Figure 8. Gross Domestic Product (GDP) by Sector, FY 1987

Agriculture's role in the economy in the late 1980s expanded as the collapse of the tin industry forced the country to diversify its productive and export base. Agricultural production as a share of GDP was approximately 23 percent in 1987, compared with 30 percent in 1960 and a low of just under 17 percent in 1979 (see fig. 8). The recession of the 1980s and unfavorable weather conditions, particularly droughts and floods, however, hampered output. Agriculture employed about 46 percent of the country's labor force in 1987. Most production, with the exception of coca, focused on the domestic market and self-sufficiency in food. Agricultural exports accounted for only about 15 percent of total exports in the late 1980s, depending on weather conditions and commodity prices for agricultural goods, hydrocarbons, and minerals.

Like the economy at large, agriculture faced major structural obstacles that kept it from reaching its vast potential. The lack of roads and easy access to ports hindered farmers from getting their produce to domestic markets and to the export markets that provided the most potential for the sector's growth. A lack of credit for farmers was another long-standing problem, caused by government policies, the use of credit for political ends, and the strict lending procedures of the commercial banking sector. Bolivia also suffered from the worst farming technology in South America and an insufficient network of research and extension institutions to reverse that trend. The combined lack of infrastructure and technology made farmers vulnerable to almost yearly droughts and floods. The traditional use of pricing policies ensuring lower food prices for urban residents also lessened incentives for farmers. In addition, farmers increasingly had to compete with contraband imports in a wide range of agricultural products. Beyond these specific obstacles, agriculture, like all sectors of the economy, also suffered from the country's endemic political instability, economic mismanagement, and slow economic growth.

Data as of December 1989