Relational Contracts and the Diffusion of Agricultural Technologies in Brazil

WHAT IS the role of the private sector in scaling agricultural technologies in developing countries? The Brazilian experience, with the soybean boom in the savanna and the expansion of the safrinha corn, suggests that the private sector can play a central role in technology diffusion, even in locations where credit and output markets do not function well

Technology Adoption and the Agricultural Supply Response Function

In this study, I exploit the recent technology-driven soy boom in Brazil to assess how the diffusion of different technologies, namely the genetically modified soy and biological nitrogen-fixing soy varieties adapted to the Brazilian savanna, change the agricultural supply response function. I use a novel panel dataset combining farm-level data for 1.5 million commercial farms from the 1996 and 2006 Brazilian agricultural census surveys to estimate the price effects on the expansion of the soy acreage. I find that the acreage response functions become increasingly elastic towards the agricultural frontier because of the existence of different technological diffusion processes. The large price effect on the adoption of nitrogen-fixing soy designed to convert marginal savanna pastureland into soy production explains most of the heterogeneity in the acreage supply function in Brazil. The estimated long-run price elasticity of soy acreage is 0.6 in the south and 1.8 in the savanna. On the agricultural frontier close to the savanna–Amazon border, the price elasticity of agricultural land is 0.13, implying that a 10% permanent increase in soy prices would result in the conversion of 1 million hectares of natural vegetation to farmland

The Distributional Impact of Climate Change in Brazilian Agriculture: A Ricardian Quantile Analysis with Census Data

The economic impact of global warming varies across firms because of differences in climate, technology, and adaptive capacity. Aggregate estimates of the average effect of warming are thus insufficient to model climate change vulnerability in developing countries. In this study, I measure the distributional effect of climate change in Brazilian agriculture by estimating the quantile and interquantile regressions of land value on climate, using agricultural census data for 490,000 commercial farms. The effect of a 1°C rise in average temperature on land values ranges from -5% for the most productive farmers located in the colder South region to -34% for the least productive farmers located in the warmer North region. The impact is most severe in the extreme 0.01 quantile of the land value distribution. The productivity inequality between farms in the extremes of the distribution of land values may double with marginal warming

The Adaptation of Soy-corn Double-cropping to the Brazilian Savanna

TWO REMARKABLE innovations have enabled Brazilian farmers to compete with the soy and corn exports of their US counterparts—breeding soybean varieties for low latitudes using biological nitrogen fixation (BNF) (Hungria, Campos, and Mendes 2001; Alves, Boddey, and Urquiaga 2002; Dobereiner 1997) and the adaptation of a double-cropping soy-corn system for production in the savanna

Technology Adoption and the Agricultural Supply Response Function

In this study, I exploit the recent technology-driven soy boom in Brazil to assess how the diffusion of different technologies, namely the genetically modified soy and biological nitrogen-fixing soy varieties adapted to the Brazilian savanna, change the agricultural supply response function. I use a novel panel dataset combining farm-level data for 1.5 million commercial farms from the 1996 and 2006 Brazilian agricultural census surveys to estimate the price effects on the expansion of the soy acreage. I find that the acreage response functions become increasingly elastic towards the agricultural frontier because of the existence of different technological diffusion processes. The large price effect on the adoption of nitrogen-fixing soy designed to convert marginal savanna pastureland into soy production explains most of the heterogeneity in the acreage supply function in Brazil. The estimated long-run price elasticity of soy acreage is 0.6 in the south and 1.8 in the savanna. On the agricultural frontier close to the savanna–Amazon border, the price elasticity of agricultural land is 0.13, implying that a 10% permanent increase in soy prices would result in the conversion of 1 million hectares of natural vegetation to farmland.</p

The Distributional Impact of Climate Change in Brazilian Agriculture: A Ricardian Quantile Analysis with Census Data

The economic impact of global warming varies across firms because of differences in climate, technology, and adaptive capacity. Aggregate estimates of the average effect of warming are thus insufficient to model climate change vulnerability in developing countries. In this study, I measure the distributional effect of climate change in Brazilian agriculture by estimating the quantile and interquantile regressions of land value on climate, using agricultural census data for 490,000 commercial farms. The effect of a 1°C rise in average temperature on land values ranges from -5% for the most productive farmers located in the colder South region to -34% for the least productive farmers located in the warmer North region. The impact is most severe in the extreme 0.01 quantile of the land value distribution. The productivity inequality between farms in the extremes of the distribution of land values may double with marginal warming.</p

Relational Contracts and the Diffusion of Agricultural Technologies in Brazil

WHAT IS the role of the private sector in scaling agricultural technologies in developing countries? The Brazilian experience, with the soybean boom in the savanna and the expansion of the safrinha corn, suggests that the private sector can play a central role in technology diffusion, even in locations where credit and output markets do not function well.</p

The Adaptation of Soy-corn Double-cropping to the Brazilian Savanna

TWO REMARKABLE innovations have enabled Brazilian farmers to compete with the soy and corn exports of their US counterparts—breeding soybean varieties for low latitudes using biological nitrogen fixation (BNF) (Hungria, Campos, and Mendes 2001; Alves, Boddey, and Urquiaga 2002; Dobereiner 1997) and the adaptation of a double-cropping soy-corn system for production in the savanna.</p

Using Markets to Balance Agricultural Expansion and Forest Conservation

HOW CAN we balance agricultural expansion and forest conservation in developing countries? Brazil has a productive agricultural sector with potential for expansion and a rich endowment of natural vegetation resources located on private land. According to the last Agricultural Census, Brazilian farms possessed about 98.5 million hectares of forestland (IBGE 2006), a little less than the combined land area of France and Germany. In 1975, when agricultural production was concentrated in southeast Brazil (Figure 1), about 60 percent of farmland was native vegetation. However, since then, technological change and market reforms have enabled national agricultural expansion. By 2006, the share of native vegetation within private properties had decreased to 46 percent (IBGE 1975; 2006).</p