The (other) China shock and the Brazilian soy boom: Cui bono?

Samuel Siewers

No 437, University of Göttingen Working Papers in Economics from University of Goettingen, Department of Economics

Abstract: Building upon the argument that factor endowments influence distributional outcomes, this paper examines the consequences of the China shock to global food markets for economic inequality in Brazilian municipalities from 1985 to 2020. I propose a new identification strategy that exploits plausibly exogenous variation in demand for soybeans based on fluctuations in the size of the pig stock in China and show that the proceeds of this China-driven agricultural bonanza have been rather unequally distributed. The soy boom has fueled land consolidation and economic inequality, especially in places dominated by large-scale mechanized agriculture. Income gains have been mostly limited to the top deciles of the distribution, while the poorest segments of the population have become worse off. Additionally, there is evidence that the more unequal a municipality, the more deforestation and rural conflict increase as soy expands.

Keywords: inequality; soybeans; Brazil; China shock; deforestation; conflict; sustainability; supply chains (search for similar items in EconPapers)
JEL-codes: D63 F63 O13 Q17 Q56 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-agr, nep-cna, nep-dev and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cegedp:310313

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