IRIBA Working Paper: 01. The Economics of the Brazilian Model of Agricultural Development
Abstract
This paper analyzes the transformation of Brazilian agriculture from a backward and dysfunctional sector to one of the breadbaskets of the world, focusing on those elements that might carry over to other developing countries seeking to make a similar transition. Today, Brazil is one of the major producers of a series of agricultural commodities, such as soybeans, sugar, orange juice, maize, cotton, chicken, meat and pigs, with strong participation in a long list of others. This has been achieved not by simply incorporating more land but by dramatic improvements in productivity, led by technological research that developed methods and inputs specifically suited to the country’s conditions. Whereas the total area of land in agriculture has remained basically the same since the mid-seventies, production has increased by nearly 300%.
The success of Brazilian agriculture in increasing production and productivity in a relatively short period of time has attracted much attention to what policies and programs have been behind this transformation. Interest has centered on the fact that the transformation was achieved starting from a relatively backward agricultural setting, similar to that found in many other poor and developing countries. The Brazilian example sparked the notion that south-south cooperation in agriculture could fare better, given the similarities involved and a purported lack of colonial vestiges. The fact that the changes in Brazilian agriculture were achieved simultaneously with a significant and unprecedented drop in poverty and inequality since 1995, made the lure of a Brazilian model even more enticing for poor countries. In particular a sense arose that the Brazilian model would be particularly well suited for Africa.
This paper provides an overview of the evolution of Brazilian agriculture analyzing its transition from low productivity and backwardness to its current status as major player in international markets and role model for other developing countries. Yet, rather than simply looking back and trying to find an ex-post reasoning that explains what has taken place, the analysis highlights the fact that throughout this path policy had very limited control over what actually took place and most agents had, and still have, a very poor understanding of how thing actually work. Admitting to the fact that the Brazilian experience in agriculture is still not entirely understood does not mean that it cannot be useful for countries such as those in Africa. On the contrary, doing so may preclude making rash transplantations of policies that may not have the intended effect in different circumstances. Similarly, examining the Brazilian agricultural experience through this lens will help to sort out what elements can be usefully emulated and how that can best be accomplished.
We highlight the importance of the underlying institutional setting on the impact of agricultural policy. The remarkable transformation in Brazilian agriculture only really emerged when inclusive institutions – strong presidentialsm subject to strong checks and balances – created a fiscal, monetary and political environment in which those policies could succeed
Citation
Mueller, B.; Mueller, C. IRIBA Working Paper: 01. The Economics of the Brazilian Model of Agricultural Development. International Research Initiative on Brazil and Africa (IRIBA), University of Manchester, Manchester, UK (2014) 52 pp.
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