The Yield Dynamics of Perennial Crops: An Application to Sugarcane in Brazil

Daniel Tregeagle and David Zilberman

No 236046, 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts from Agricultural and Applied Economics Association

Abstract: In 2011-2012 sugarcane yields in the Brazilian south-central region fell 15 percent lower than the average of the previous decade. This corresponded to the end of a decade of uninterrupted growth in sugarcane ethanol production in Brazil. Several explanations for this fall have been proposed including inclement weather, and a low field renewal rate due to the 2008-2009 financial crisis. We gather academic and journalistic evidence to demonstrate the possiblity of the crisis-renewal pathway. We develop a theoretical model of perennial crop yields as a function of the renewal rate. We theoretically derive the number of lags of the renewal rate that should be used in a reduced form specification of perennial crop yields. Using a balanced panel of yields and renewal rates in the South-Central region of Brazil from 2005-2013 we investigate the relevance of these pathways. We find that the yield effects from a renewal rate change in Brazil are consistent with the yield effects predicted by our model. We also find that both pathways are significant, but that the weather pathway is driven by temperature, not rainfall.

Keywords: Crop Production/Industries; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 42
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea16:236046

DOI: 10.22004/ag.econ.236046

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