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Productivity convergence in Brazil: The case of grain production

  • Magalhaes, Eduardo
  • Diao, Xinshen

"In recent years, Brazil has become a considerable player in agricultural markets for a number of commodities. Such agricultural growth in Brazil has largely been the result of gains in productivity over the last several decades. Still, there remain some sub-national regions and states that lag behind in both agricultural productivity and levels of per capita income. In this paper, we investigate whether technological spillovers in agriculture have reached the poorer or less productive regions with focus on the evolution and patterns of land productivity. To assess such spillovers, we examine three cereal crops: maize, rice and wheat, as these crops are grown by commercial and subsistence farmers throughout the country. We first apply a generalized entropy (GE) method to assess whether inequality in productivity has changed over time. The entropy analysis indicates that the trends for overall entropy did not increase over time for all three crops. Moreover, declining trends in between-group inequality were observed for maize and wheat and remained constant for rice. This result suggests that yields in less productive micro-regions, indeed, have grown faster than yields in more productive micro-regions, at least in the case of maize and wheat. Next, two types of econometric estimations are used to measure whether convergence has occurred in yields of the three crops. The econometric findings are consistent with the GE results and suggest that conditional convergence has occurred in all three crops, which demonstrates that yields in less productive regions converge to those in productive regions, given the control of other factors. However, the process has been rather slow." from authors' abstract

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Paper provided by International Food Policy Research Institute (IFPRI) in its series IFPRI discussion papers with number 857.

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Date of creation: 2009
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Handle: RePEc:fpr:ifprid:857
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  1. Chun Kwok Lei & Shujie Yao, 2008. "On Income Convergence among China, Hong Kong and Macau," The World Economy, Wiley Blackwell, vol. 31(3), pages 345-366, 03.
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  8. Baltagi, Badi H. & Wu, Ping X., 1999. "Unequally Spaced Panel Data Regressions With Ar(1) Disturbances," Econometric Theory, Cambridge University Press, vol. 15(06), pages 814-823, December.
  9. Wan, Guang Hua, 2001. "Changes in regional inequality in rural China: decomposing the Gini index by income sources," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 45(3), September.
  10. Erickson, Kenneth W. & Moss, Charles B. & Mishra, Ashok K., 2006. "Farm Wealth Inequality Within and Across States in the United States," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 35(2), October.
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  12. Baumol, William J, 1986. "Productivity Growth, Convergence, and Welfare: What the Long-run Data Show," American Economic Review, American Economic Association, vol. 76(5), pages 1072-85, December.
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