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

Pravin Trivedi

No 92, Policy Research Working Paper Series from The World Bank

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.

Keywords: Economic Growth; Economic Theory&Research; Environmental Economics&Policies; Crops&Crop Management Systems; Banks&Banking Reform (search for similar items in EconPapers)
Date: 1988-09-30
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www-wds.worldbank.org/external/default/WDSC ... d/PDF/multi_page.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:92

Access Statistics for this paper

More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().