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Policy, Technology, and Efficiency of Brazilian Agriculture

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  • Rada, Nicholas E.
  • Valdes, Constanza

Abstract

The Brazilian agricultural sector has been transformed from a traditional system of production with low use of modern technologies to a world agricultural leader. That transformation occurred as the country moved away from import-substitution policies—which nurtured domestic industrial development at the expense of agriculture—toward market-oriented policy reforms. These reforms included openness to foreign trade and foreign investment and the use of new technologies, which led to a new growth pattern. To evaluate that transformation, the authors use agricultural censuses spanning 1985-2006 to characterize Brazilian total factor productivity growth, decomposing that growth into technical and effi ciency changes. This report presents the fi ndings of a study that focuses on the effect of Brazil’s science and technology investments and other public policies on farm production. The fi ndings indicate that agricultural research benefi ts have been most rapidly adopted by the most effi cient farms, widening the productivity gap between these farms and average farms. That gap, however, has been narrowed through other public policies, such as rural credit and infrastructure investments, that favor average producers.

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Bibliographic Info

Paper provided by United States Department of Agriculture, Economic Research Service in its series Economic Research Report with number 127498.

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Date of creation: Jul 2012
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Handle: RePEc:ags:uersrr:127498

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Related research

Keywords: Brazilian agriculture; total factor productivity (TFP) growth; technical change; technical effi ciency; Embrapa; agricultural research; distance function; stochastic frontier; Agricultural and Food Policy; International Development; Production Economics; Productivity Analysis;

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  1. Anderson, Kym & Kurzweil, Marianne & Martin, Will & Sandri, Damiano & Valenzuela, Ernesto, 2008. "Measuring Distortions to Agricultural Incentives, Revisited," CEPR Discussion Papers 6924, C.E.P.R. Discussion Papers.
  2. Keith O. Fuglie, 2008. "Is a slowdown in agricultural productivity growth contributing to the rise in commodity prices?," Agricultural Economics, International Association of Agricultural Economists, vol. 39(s1), pages 431-441, November.
  3. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
  4. Nicholas E. Rada & Steven T. Buccola & Keith O. Fuglie, 2010. "Government Policy and Agricultural Productivity in Indonesia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(3), pages 863-880.
  5. Marasas, C. N. & Smale, M. & Singh, R. P., 2003. "The economic impact of productivity maintenance research: breeding for leaf rust resistance in modern wheat," Agricultural Economics, Blackwell, vol. 29(3), pages 253-263, December.
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