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Soybean Development: The Impact of a Decade of Agricultural Change on Urban and Economic Growth in Mato Grosso, Brazil

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  • Peter Richards
  • Heitor Pellegrina
  • Leah VanWey
  • Stephanie Spera

Abstract

In this research we consider the impact of export-driven, soybean agriculture in Mato Grosso on regional economic growth. Here we argue that the soybean sector has served as a motor to the state’s economy by increasing the demand for services, housing, and goods, and by providing a source of investment capital to the non-agricultural sector. Specifically, we show that each square kilometer of soybean production supports 2.5 formal sector jobs outside of agriculture, and the equivalent of approximately 150,000US in annual, non-agricultural GDP. We also show that annual gains in non-agricultural employment and GDP are closely tied to soybean profitability, and thus vary from year to year. However, while this article highlights the potential of the agricultural sector as a driver of regional economic growth, it also acknowledges that this growth has been sustained by profits determined by externally set prices and the rate of exchange, and that future growth trajectories will be susceptible to potential currency of market shocks. We also show that while Mato Grosso’s economic growth has come at a significant cost to the environment, value added by the agriculture sector, directly and indirectly, has surpassed the value of the CO2-e emitted through land clearings.

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  • Peter Richards & Heitor Pellegrina & Leah VanWey & Stephanie Spera, 2015. "Soybean Development: The Impact of a Decade of Agricultural Change on Urban and Economic Growth in Mato Grosso, Brazil," PLOS ONE, Public Library of Science, vol. 10(4), pages 1-18, April.
    • Handle: RePEc:plo:pone00:0122510
    DOI: 10.1371/journal.pone.0122510
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    2. Stabile, Marcelo C.C. & Guimarães, André L. & Silva, Daniel S. & Ribeiro, Vivian & Macedo, Marcia N. & Coe, Michael T. & Pinto, Erika & Moutinho, Paulo & Alencar, Ane, 2020. "Solving Brazil's land use puzzle: Increasing production and slowing Amazon deforestation," Land Use Policy, Elsevier, vol. 91(C).
    3. Claudio Rafael Mariano Baigún & Priscilla Gail Minotti, 2021. "Conserving the Paraguay-Paraná Fluvial Corridor in the XXI Century: Conflicts, Threats, and Challenges," Sustainability, MDPI, vol. 13(9), pages 1-28, May.
    4. Shyamsundar, Priya & Sauls, Laura Aileen & Cheek, Jennifer Zavaleta & Sullivan-Wiley, Kira & Erbaugh, J.T. & Krishnapriya, P.P., 2021. "Global forces of change: Implications for forest-poverty dynamics," Forest Policy and Economics, Elsevier, vol. 133(C).
    5. Flach, Rafaela & Abrahão, Gabriel & Bryant, Benjamin & Scarabello, Marluce & Soterroni, Aline C. & Ramos, Fernando M. & Valin, Hugo & Obersteiner, Michael & Cohn, Avery S., 2021. "Conserving the Cerrado and Amazon biomes of Brazil protects the soy economy from damaging warming," World Development, Elsevier, vol. 146(C).
    6. Marley Nunes Vituri Toloi & Silvia Helena Bonilla & Rodrigo Carlo Toloi & Helton Raimundo Oliveira Silva & Irenilza de Alencar Nääs, 2021. "Development Indicators and Soybean Production in Brazil," Agriculture, MDPI, vol. 11(11), pages 1-15, November.
    7. Arthur Bragança & Avery Simon Cohn, 2019. "Predicting Intensification on the Brazilian Agricultural Frontier: Combining Evidence from Lab-In-The-Field Experiments and Household Surveys," Land, MDPI, vol. 8(1), pages 1-22, January.
    8. Luiz Antonio Martinelli & Mateus Batistella & Ramon Felipe Bicudo da Silva & Emilio Moran, 2017. "Soy Expansion and Socioeconomic Development in Municipalities of Brazil," Land, MDPI, vol. 6(3), pages 1-14, September.
    9. Simone Piras & Valdemar João Wesz & Stefano Ghinoi, 2021. "Soy Expansion, Environment, and Human Development: An Analysis across Brazilian Municipalities," Sustainability, MDPI, vol. 13(13), pages 1-20, June.
    10. Daniella Tiemi Sasaki Okida & Osmar Abílio de Carvalho Júnior & Osmar Luiz Ferreira de Carvalho & Roberto Arnaldo Trancoso Gomes & Renato Fontes Guimarães, 2021. "Relationship between Land Property Security and Brazilian Amazon Deforestation in the Mato Grosso State during the Period 2013–2018," Sustainability, MDPI, vol. 13(4), pages 1-20, February.
    11. Neli Aparecida de Mello-Théry & Eduardo de Lima Caldas & Beatriz M. Funatsu & Damien Arvor & Vincent Dubreuil, 2020. "Climate Change and Public Policies in the Brazilian Amazon State of Mato Grosso: Perceptions and Challenges," Sustainability, MDPI, vol. 12(12), pages 1-20, June.
    12. Michelle C. A. Picoli & Ana Rorato & Pedro Leitão & Gilberto Camara & Adeline Maciel & Patrick Hostert & Ieda Del’Arco Sanches, 2020. "Impacts of Public and Private Sector Policies on Soybean and Pasture Expansion in Mato Grosso—Brazil from 2001 to 2017," Land, MDPI, vol. 9(1), pages 1-15, January.
    13. Peter Richards & Tom Reardon & David Tschirley & Thom Jayne & Jim Oehmke & David Atwood, 2016. "Cities and the future of agriculture and food security: a policy and programmatic roundtable," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 8(4), pages 871-877, August.
    14. Peter Richards, 2018. "It’s not just where you farm; it’s whether your neighbor does too. How agglomeration economies are shaping new agricultural landscapes," Journal of Economic Geography, Oxford University Press, vol. 18(1), pages 87-110.
    15. Ferreira, Susane Cristini Gomes & Azevedo-Ramos, Claudia & Farias, Hilder André Bezerra & Mota, Pedro, 2023. "Spillover effect of the oil palm boom on the growth of surrounding towns in the eastern Amazon," Land Use Policy, Elsevier, vol. 133(C).
    16. Lisa L. Rausch & Holly K. Gibbs, 2016. "Property Arrangements and Soy Governance in the Brazilian State of Mato Grosso: Implications for Deforestation-Free Production," Land, MDPI, vol. 5(2), pages 1-16, March.

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