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Possible regional impacts of agricultural trade liberalization in Brazil: some insights based on the estimation of soybean supply function

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  • de Menezes, Tatiane Almeida
  • Piketty, Marie-Gabrielle

Abstract

An important debate exists on whether soybean expansion in Brazil is responsible for putting more pressure on the Amazon forest or if it allows land use intensification through the recuperation of degraded pasture. In this paper, we estimate regional soybean supply own and cross price elasticity in order to better assess the possible impacts of agricultural trade liberalization in old and new soybean production basins. Applying a panel data estimation technique, we find large substitution supply elasticity between soybean and beef in Brazil Moreover, own price elasticity of soybean supply is much higher in Cerrados regions that in the South of the country. These results allow to discuss possible regional consequences of soybean trade liberalization on the Amazon forest. The current movements to promote sustainable and responsible soybean production in Brazil could certainly modify the future response of the sector to trade liberalization and its long term impacts.

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Paper provided by European Association of Agricultural Economists in its series 106th Seminar, October 25-27, 2007, Montpellier, France with number 7930.

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Date of creation: 2007
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Handle: RePEc:ags:eaa106:7930

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Keywords: International Relations/Trade;

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  1. Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, vol. 49(6), pages 1417-26, November.
  2. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  3. Anderson, T. W. & Hsiao, Cheng, 1982. "Formulation and estimation of dynamic models using panel data," Journal of Econometrics, Elsevier, vol. 18(1), pages 47-82, January.
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