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A model of cocoa replanting and new planting in Bahia, Brazil, 1966-85

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  • Trivedi, Pravin K.

Abstract

In 1966, 90 percent of the cocoa growing areas in Bahia, Brazil had trees more than 30 years old. By 1985 most of the area had been replanted or supplied with new trees. Throughout most of this period there were high or rising cocoa prices, and zero or negative interest rates. High prices and low interest rates directly encouraged new planting, but their relationship to replanting is more complex. In the short term, higher prices discourage replanting, which involves uprooting and a temporary loss of revenue. But over the long run, higher prices increase expectations of future profits and encourage replanting. Lowering the interest rate beloow its real level provided cocoa growers with a subsidy that encouraged both replanting and new planting.

Suggested Citation

  • Trivedi, Pravin K., 1988. "A model of cocoa replanting and new planting in Bahia, Brazil, 1966-85," Policy Research Working Paper Series 92, The World Bank.
    • Handle: RePEc:wbk:wbrwps:92
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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