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Determinants of Agricultural Diversification in Brazil: A Spatial Econometric Analysis

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  • Jose Luis Parre
  • Andre Luis Squarize Chagas

Abstract

This research has as main objective to analyze the behavior and the importance of agricultural diversification for Brazil, considering its States, for the period from 2002 to 2018. We will propose an analytical model to make it possible to identify the determinants of agricultural diversification in Brazil. Empirically, the study will proceed by estimating an SLX model using panel data and considering the spillover effects, highlighting the importance of location and neighborhood. The study's findings indicate a continued decline in crop diversity with a strong tendency to productive specialization in Brazilian agriculture, mainly in the states located in the Midwest and South regions of the country. The average rates of growth of the indexes presented negative values for the period of analysis: -0.41 % per year for the Simpson index, -0.58% per year for the Shannon index and -0.91% per year for the effective number of crops. It is important to note that some states are allocating practically the entire agricultural area to three or four dominant crops. As for the determinants of agricultural diversification, the results for 15 Brazil are in line with the specialized literature.

Suggested Citation

  • Jose Luis Parre & Andre Luis Squarize Chagas, 2021. "Determinants of Agricultural Diversification in Brazil: A Spatial Econometric Analysis," Working Papers, Department of Economics 2021_28, University of São Paulo (FEA-USP).
    • Handle: RePEc:spa:wpaper:2021wpecon28
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    More about this item

    Keywords

    Agricultural diversity; agricultural diversification indexes; model SLX; panel data panel; public research;
    All these keywords.

    JEL classification:

    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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