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Subsidies and Cattle Production in the Amazon: An Economic Policy Analysis

Author

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  • McClain, Emily A.
  • Halbrendt, Catherine
  • Sherbourne, Jennifer
  • Gempesaw, Conrado

Abstract

Cattle production has been a major source of agricultural deforestation in Brazil's Amazon rainforest. Brazilian credit subsidies have been blamed for speeding cattle expansion and thus deforestation. A stochastic coefficients regression approach was used to quantify the effects of credit subsidies and world prices on cattle numbers in five Amazon rigions for the 1963-83 period. Results show that cattle production has been positively correlated to both prices and credit. Elasticities show that these relationships strengthened over time and that production has been more responsive to credit than to world prices.

Suggested Citation

  • McClain, Emily A. & Halbrendt, Catherine & Sherbourne, Jennifer & Gempesaw, Conrado, 1992. "Subsidies and Cattle Production in the Amazon: An Economic Policy Analysis," 1992 Occasional Paper Series No. 6 197874, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaaeo6:197874
    DOI: 10.22004/ag.econ.197874
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    References listed on IDEAS

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    1. Swamy, P. A. V. B. & Tinsley, P. A., 1980. "Linear prediction and estimation methods for regression models with stationary stochastic coefficients," Journal of Econometrics, Elsevier, vol. 12(2), pages 103-142, February.
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