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The Evolution of Agricultural Policies and Agribusiness Development in Brazil

  • Agricultural Science
  • Economics


Choices Magazine, 2nd Quarter 2006 CHOICES The magazine of food, farm, and resource issues 2nd Quarter 2006 • 21(2) CHOICES 85 A publication of the American Agricultural Economics Association 2nd Quarter 2006 • 21(2) ©1999–2006 CHOICES. All rights reserved. Articles may be reproduced or electronically distributed as long as attribution to Choices and the American Agricultural Economics Association is maintained. Choices subscriptions are free and can be obtained through The Evolution of Agricultural Policies and Agribusiness Development in Brazil Fabio R. Chaddad and Marcos S. Jank JEL Classification: Q18, O54, O13, Q15 In the late 1980s, Brazil started to adopt liberal and mar- ket-oriented policies, which significantly impacted the performance of its food and agricultural (henceforth agri- food) sector. The agrifood sector is now among the most dynamic in the Brazilian economy. Grain production dou- bled from 58 to 120 million metric tons (MT) and meat production surged from 7.5 to 20.7 million MT between 1990 and 2005. The agrifood economy generated R$534 billion (US$183 billion) in 2004, which is equivalent to 30% of the country’s GDP. In addition, it represented 35% of total employment and 40% of total exports in 2004. Agricultural production growth and agribusiness development in Brazil are largely dependent on exports, which account for 31% of agricultural production. Total agricultural exports more than doubled from US$13-32 billion in the 1990-2005 period. Brazil is now the world’s third agrifood exporter – following the European Union (EU) and the United States (US) – and surpassed the US as the country with the largest surplus in agricultural trade, with US$29 billion in 2005. The growing competitiveness of the Brazilian agrifood sector is attributed to a number of factors, including investments in tropical agricultural research and availabil- ity of agricultural credit, which caused significant produc- tivity gains since the 1

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