Rural credit and agricultural supply in Brazil / Crédito rural e oferta agrícola no Brasil

AUTOR(ES)
DATA DE PUBLICAÇÃO

2008

RESUMO

The rural credit program was created in the late 1960s and became one of the most important agricultural policies in Brazil. It has been subsidized throughout the years, with its interest rate becoming smaller than the market interest rate. The main objective of the Rural Credit Program was to increase technology adoption and production. However, the financial resources from the rural credit policy have decreased along the years. On the other hand, agricultural production has increased, as well as the use of technology by the rural sector. Given this situation, has rural credit been correlated to agricultural production? Analyzing the rural credit impact on agricultural production offers some difficulties due to the programs specificities and the agricultural sectors characteristics. This research evaluates the importance of agricultural sector financing, analyzing the budget restrictions faced by the farmers. The hypothesis is that farmers have limited resources to purchase inputs and need to finance their agricultural production. The objective of this research is to analyze the crop response to variations on total expenditure, from 1976 to 2005. The crops investigated are cotton, rice, bean, corn, soybean and wheat, and the inputs are fertilizers, labor and chemicals. Land is specified as fixed input. The research is based on the duality applied to the production theory and the conditioned input demands are estimated from a multi output, multi input translog profit function. Total expenditure variation is statistically significant to explain the changes in the supply of rice, bean, corn, and soybean, and the demand of fertilizers and labor. Land presents a positive impact on all crop supplies, but not on the demand for fertilizers and chemicals. This may be explained by the intensification of fertilizer and chemical use in the agricultural production. Cotton response to price is not statistically significant. The supplies of rice, bean, corn and soybean are inelastic, as expected. Wheat supply is elastic, and may be explained by the production response to the governments price policies. The input demands are also elastic. The results indicate that the agricultural sector faces budget restrictions. The conclusion is that the Rural Credit Program policy plays an important role in the agricultural sector since it allows farmers to purchase more inputs and increase the output production.

ASSUNTO(S)

agricultural supply economia agraria função translog rural credit translog function crédito rural oferta agrícola

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