What explains the intensification and diversification of Brazil´s agricultural production and exports from 1990 to 2012? author-name: Carlos José Caetano Bacha

Leandro Vinicios de Carvalho

Global Development Institute Working Paper Series from GDI, The University of Manchester

Abstract: The objective of this paper is to provide a comprehensive explanation of the production and export intensification and diversification of the Brazilian agricultural sector in the period 1990- 2012. Our hypothesis is that Brazil does not have a predetermined ‘model’ calibrated for success in international agricultural markets; rather, the country has altered its agricultural policies in a responsive manner reflecting constraints and opportunities arising in both domestic and international markets, and taking advantage of Brazil’s agricultural land availability and good climate for agriculture. We identify four main noteworthy results of the study: (1) Brazil is no longer an agricultural country, despite the fact that in 2012 agriculture answered for 5.2% of Brazil´s GDP and supports a diversified and fast-growing agribusiness sector which in turn amounted to 22.2% of Brazilian GDP. (2) Agricultural and agro-industrial production and exports have increased and diversified simultaneously since the 1970s with the farming of new areas. (3) The location of the fastest-growing farming areas shifted during 1970-1990 from the South and Southeast regions to the Central-West region. Since 2000 a new agricultural frontier has emerged in the Cerrado (savannah) areas bordering the states of Maranhão, Tocantins, Piauí and Bahia (often referred to collectively by the acronyms MATOPIBA or BAMAPITO). (4) An econometric model of export supply, run using a 1991-2011 dataset, offers a number of insights. In particular, the world’s overall GDP growth and Brazilian agricultural and agroprocessed production have been the main drivers of Brazilian agricultural and agro-industrial exports, rather than international prices. Simultaneously, in the international market Brazil has taken over a share vacated by the USA and European Union countries.

Date: 2014
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