Appendixes : data and methodology, Vol. 2 of 2

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Appendixes : data and methodology , Volume 2 of 2

Author:	Brandao, Antonio Salazar P.; Carvalho, Jose L.;	Collection Title:	World Bank comparative studies -- the political economy of agricultural pricing policy
Country:	Brazil;	Date Stored:	2002/09/12
Document Date:	1991/11/30	Document Type:	Publication
ISBN:	ISBN 0-8213-1947-7	Language:	English
Major Sector:	Agriculture, fishing, and forestry	Region:	Latin America & Caribbean
Report Number:	10185	Sub Sectors:	(Historic)Other agriculture
SubTopics:	Environmental Economics & Policies; Markets and Market Access; Crops and Crop Management Systems; Access to Markets; Agricultural Knowledge and Information Systems	Volume No:	2 of 2

Summary: This study covers the latter part of the 1960s, the entire 1970s, and the first years of the 1980s. During this period, agricultural policy has undergone major changes, from a period in which subsidized credit to agriculture was the most important policy instrument to one in which guaranteed prices assumed a predominant role. In addition, as Brazil's economy became more and more unstable, so did agricultural policy. A large number of direct and indirect government interventions helped distort prices in the agricultural sector. To evaluate the net effect of this array of policies, various measures of protection were calculated. In general, the agricultural sector was taxed when compared to the nonagricultural sector. Two export crops, soybeans and cotton, were taxed more heavily than import-competing food crops. Indirect causes, mainly exchange rate overvaluation, were the most important determinants of the level of taxation. Substantial losses of production were a consequence of the discriminatory policies of the government. Although the agricultural sector was taxed through price policy, this becomes less clear when all transfers to and from agriculture are accounted for. The most important of these transfers was that associated with a subsidized interest rate for agricultural credit. This compensation is highly regressive with respect to income distribution. A high degree of randomness in the behavior of the government is also seen in the econometric results.


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