A WORLD BANK COUNTRY STUDY BRAZIL A Review of Agricultural Policies 1'' BRAZIL A Review of Agricultural Policies This report is based on the findings of a mission which visited Brazil in November 1979. The mission was composed of: Fred Levy, chief of mission Douglas Graham, consultant Norman Rask, consultant Lucio Reca, consultant David Kyle, research assistant Latin America and the Caribbean Regional Office The World Bank Washington, D.C., U.S.A. The World Bank issues country economic studies in two series. This report is a working document and is, as such, part of an informal series based wholly on materials originally prepared for restricted use within the Bank. The tert is not meant to be definitive, but is offered so as to make some results of internal research widely available to scholars and practitioners throughout the world. A second, more formal series entitled World Bank Country Economic Reports is pub- lished for the Bank by The Johns Hopkins University Press, Baltimore and London. Titles of these and all other bank publications may be found in the Catalog of Publication., which is available free of charge from World Bank, Publications Unit, 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. The views and interpretatiens in this report are the authors' and should not be attributed to the World Bank, to its affiliated organizations, or to any individual acting in their behalf. Copyright 0 1982 The International Bank for Reconstruction and Development/The World Bank The World Bank enjoys copyright under Protocol 2 of the Universal Copyright Convention. Nevertheless, permission for reproduction of any part of this report is hereby granted provided that full citation is made. Library of Congress Cataloging In Publication Data World Bank. Latin America and the Caribbean Regional Office. A review of ;gricultural policies in Brazil. (A World Bank country study) Includes bibliographical riferences. 1. Agriculture and state--Brazil. I. Title. II. Series. HD1873.W67 1982 338.1'881 82-15973 fSBN 0-8213-0095-4 JSSA 0d 2¸3 -'.2Z3 CURRENCY EQUIVALENTS Currency Unit: Cruzeiro Exchange Rates Effective November 1. 1980 Selling Rate USS1.00 - Cr$57.59 US$1 million - Cr$57,590,000 Cr$l million - US$17,364 Buying Rate: US$1.00 Average Exchange Rates 1977 1978 1979 US$1.00 Cr$ 14.144 Cr$ 18.078 Cr$ 26.818 US$1 million Cr$ 14,144,000 Cr$ 18,078,000 Cr$ 26,818,000 Cr$1 million US$ 70,701 US$ 55,316 USS 37,288 Preface The World Bank periodically prepares economic and sector reports both as background for its technical and financial assistance to member countries and to provide a basis for the Bank's policy dialogue with government officials. Distribution of such reports is normally restricted to official representatives of member countries and to other international development organizations. When a report is thought to be of high quality and of interest to a wider community, and if the authorities of the country involved authorize waiver of the normal restrictions on distribution, a public edition can be issued. These reports should be considered working documents rather than ed.itorially polished books. The present report reviews agricultural performance and policies in Brazil in recent decades. It is particularly timely in view of the high priority being placed on the sector to expand both domestic food production and exports, as well as to provide substitutes for imported petroleum and growing employment opportunities. Particular attention is given to rural credit, which over the past decade has been the major tool by which government has sought to promote agricultural growth. Also reviewed in some detail are the minimum price guarantee program, the wheat program, foreign trade policies and the program to substitute sugar alcohol for gasoline. Although the report assesses government policies and offers some recommendations for change, it should be noted that the performance of Brazil's agricultural sector in the post-World War II period, in terms of aggregate output growth, has been among the best in the world. The recommendations offered here are aimed at sustaining that performance into the future, while achieving improved efficiency of resource use and greater distributive equity. Nicolas Ardito Barletta Vice President Latin America & Caribbean Regional Office This paper reviews the performance of Brazilian agriculture over the past two decades and the policies which have influenced it. The energy crisis and balance-of-payments difficulties have led Brazilian policymakers to give increased priori'v to agriculture and to the need of eliminating past policy distortions. Particular attention is given to rural credit, the minimum price program, subsidies to the producers and consumers of wheat, land taxation, foreign trade policies, and the program to substitute sugar alcohol for gasoline. GLOSSARY OF ACRONYMS AGF - Adquisicoes do Governo Federal Federal Government Acquisitions (Minimum Price Program) CACEX - Carteira do Comercio Exterior Foreign Trade Portfolio (Bank of Brazil) CEASA - Centro de Abastecimento, Sociedad Anonima Center of Supply, Inc. CEFER - Centro de Estudos de Fertilizantes Center for Fertilizer Studies CEPLAC - Comissao Executivo do Plano da Lavoura Cacaueira Executive Commission of the Plan for Cocoa Cultivation CFP - Comissao de Financiamento da Producao Commission for Production Financing CIBRAZEM - Companhia Brasileira de Armazenagem Brazilian Storage Company COBAL - Companhia Brasileira de Alimentacao Brazilian Food Company COFAI? - Comissao Federal de Abastecimento e Precos Federal Commission for Supply and Prices DRC - Domestic Resource Cost EGF - Emprestimo do Governo Federal Federal Government Loans (Minimum Price Program) EMBRAPA - Empresa Brasileira de Pesquisas Agropecuarias Brazilian Enterprise for Agriculture and Livestock Research EMBRATER - Empresa Brasileira de Assistencia Tecnica e Extensao Rural Brazilian Enterprise for Technical Assistance and Rural Extension FAO - Food and Agriculture Organization (United Nations) FGV - Fundacao Getulio Vargas Getulio Vargas Foundation FIBGE - Fundacao Instituto Brasileiro de Geografia e Estatistica Brazilian Institute of Geography and Statistics GDP - Gross Domestic Product GEAF - Grupo Executivo de Abastecimento de Fertilizantes Executive Group for Fertilizer Supply IAA - Instituto do Acucar e do Alcool Sugar and Alcohol Institute IBC - Instituto Brasileiro de Cafe Brazilian Coffee Institute ICM - Imposto sobre Operacoes Relativas a Circulacao de Mercadorias Tax on the Circulation of Goods IEA - Instituto de Economia Agricola Institute of Agricultural Economics INCRA - Instituto Nacional de Colonizacao e Reforma Agraria National Institute of Colonization and Agrarian Reform IPI - Imposto sobre Productos Industrializados Industrial Products Tax IPT - Instituto de Pesquisas Tecnologicas Institute of Technological Research ORTN - Obrigacoes Reajustaveis do Tesoro Nacional Indexed Treasury Bonds GLOSSARY OF ACRONYMS (Continued) PROALCOOL - Programa Nacional de Alcool National Alcohol Program PROCACAU - Programa Nacional de Expansao da Cacauicultura National Program for the Expansion of Cocoa Cultivation PRONAZEM - Programa Nacional de Armazenagem National Storage Program SEAP - Secretaria Especial de Abastecimento e Precos Special Secretariat for Supply and Prices (Ministry of Planning) SINAC - Sistema Nacional de Centrais de Abastecimento National System of Supply Centers SNAP - Secretaria Nacional de Abastecimento y Precos National Secretariat for Supply and Prices (Ministry of Agriculture) SUNAB Superintendencia Nacional de Abastecimento National Superintendency of Supply (Ministry of Agriculture) SUPLAN - Superintendencia de Planejamento Superintendency of Planning (Ministry of Agriculture) USDA - United States Department of Agriculture VBC - Valor Basico de Custeio Basic Cost of Production TABLE OF CONTENTS Glossary of Acronyms Chapter Page I. An Overview of Agricultural Policy and Performance ..... 1 A. The Historical Importance of Agricultural Exports 1 B. The Policy Environment Since World War II .......... 2 C. Agricultural Performance Since World War II ........ 4 Crop production ................................ 4 Livestock products ........................ 10 Foreign trade .......................... ....... 12 D. Outline of the Report o . ................ 14 II. Government Policies Toward Agriculture ................. 15 A. Introduction ............ ....................... 15 B. Agricultural Credit .............................. . 16 C. The Minimum Price Program .............. ...... 27 D. Wheat Subsidy Policy........... ..... 42 Introduction ............................ - 42 Production..................... ......... 42 Wheat consumption and imports . .. 44 'Wheat policies .... .................. 46 E. Other Price and Supply Interventions .........47 Price controls ................................ 50 Marketing .... . ............. o ........ 50 The milk subsidy .......... . ......... . . 51 The beef program ........................ 51 Storage capacity ............................52 F. Input Policies .............................. 52 Fertilizer ............................ 55 Tractors .........................62 Seeds .......................................65 G. Research and Extension ................... 65 H. Taxation of Agricultural Land, Incomes, and Product. 69 Rural land tax .................. 69 Income tax ............................ 71 Value-added tax............................... 71 III. Foreign Trade Policies and Agricultural Exports ......... 72 A. Export Performance ................................. 72 B. Policies Affecting Agricultural Exports ..... ....... 76 C. Soybeans .......................................... 80 Production ......................................80 Domestic consumption ............................84 Export performance and markets .......... 84 TABLE OF CONTENTS (Continued) Chapter Page IV. Sugar and the Alcohol Program ......................... 92 A. Sugar Production and Export Performance .......... ... 92 B. Alcohol Production in Brazil ....................... 97 The alcohol plan to 1985 ....................... 97 Regional 1liquid fuel needs and alcohol production possibilities ...... ................ 103 C. Food-Energy Crop Competition for Land ............. ... 105 Land use in the state of Sao Paulo ............. 106 Ownership concentration ........................ 110 V. Summary of Major Recommendations ............ ........... 112 A. Overview ......................................... . 112 B. Agricultural Policies .............................. 113 Credit. ......................................... 113 Minimum prices .. ............................. 115 Wheat subsidies ...................... o.. 116 Fertilizer costs ............................... 117 Seed improvement and dissemination ............. 118 Rural land tax ............................ 118 The promotion of processed agricultural exports. 119 The alcohol program ........................... 120 C. Concluding Observations ........................... 122 Annex: Major Crops A. Domestic Food Crops ......... .................... .. 123 1. Corn.......................................... 123 2. Rice ..... .......... . .. . .............. .. 130 3. Black beans ...o... . . . ... . e 138 4. Manioc .....g. 140 B. Export and Industrial Crop's g o........ g....gggj 143 1. Coffee gg gg ..................... 143 2. Cotton geg e.g.....e.gg g 153 3. Cocoa ........ - ....... 160 Statistical Appendix LIST OF TABLES Page 1. Structure of Crop Production, 1952/54-1977 .................. 5 2. Rates of Growth of Output, Major Crops, 1955-1977 ............. 7 3. Real Agricultural Price Trends, 1966-1980 ........ ...... 9 4. Growth Rates of Area Cultivated/Harvested and Average Yields, Major Crops, 1955-65 and 1966-77 ............. 11 5. Trade Balance - Products of Agricultural Origin, 1965-1979 .. 13 6. Growth of Agricultural Output and Total Credit Flows to Agriculture, 1969-1978 ............... ............. 17 7. Number of Loans to Agriculture, 1975-1978 ... ........ 19 8. Distribution of Production Credits by Crop, 1975-197 ....... 21 9. Distribution of Crop Credit by Region, 1977 and 1979 .......... 22 10. Distribution of Credit by Farm Size, Sao Paulo, 1977 .......... 24 11. Indexes of Sales Prices and Rents for Crop Land in Brazil and Selected States, 1969-1976 ........................ 26 12. Price Variability of Selected Crops, 1967-1976 ................ 28 13. EGF Operations by Regions, 1968/69-1977/79 ................. 30 14. Allocation of EGF Loans by Crop, 1968/69-1978/79 ....... 32 15. Distribution of EGF Loans by Type of Beneficiary, 1968/69-1979 . ....................................... 33 16. AGF Operations by Regions, 1973/74-1977/78 ................... 34 17. Distribution of AGF Purchases by Crop, 1973/74-1977/78 35 18. Average Annual Rates of Real Increase of Minimum Prices and Producer Prices During Harvest Months, Selected Crops, 1967/68-1980/81 ... ........... o ......... o ... .... o .... 37 19. Ratio of Average Producer Price at Harvest Time to Minimum Price, Selected Crops, 1967/68-1978/79 ........... ...... 39 20. Proportion of Crop Stored Under Minimum Price Program, Selected Crops, 1968/69-1978/79.................. 40 21. Wheat - Area, Production and Average Yields, 1967-1979 .....43 22. Wheat Consumption and Imports, 1967-1979........... 45 23. Wheat Subsidies Received by Wheat Producers and Consumers, 1968-1979 ...................................................... 48 24. Per Capita Consumption of Wheat, Corn, Rice and Black Beans, 1967-1978 .............................. 49 25. Estimated Costs of the Beef Storage Program, 1975-1979 ........ 53 26. Nominal Import Tariffs on Selected Agricultural Inputs, November 1979 ...................... ........................ 54 27. Apparent Fertilizer Consumption, 1960/64-1980 ................ 56 28. Domestically Produced Fertilizer as Proportion of Total Consumption, 1961-1978 ................................. 57 29. Price Indexes for Fertilizer and Agricultural Products for Selected Years, 1966-1979 .............................. 58 30. Fertilizer Prices at Farm Level in Brazil and United States 60 LIST OF TABLES (Continued) Page 31. Domestic Cost to Farmers of Fertilizer and Fertilizer Inputs Relative to Import Price, 1978 ........................ 61 32. Stock of Tractors and Area Planted, 1960-1978 ........... . 63 33. Tractor Prices in Product Terms and in U.S. Dollars .......... 64 34. Use of Improved Seeds by Region and Crop, 1978/79 ............ 65 35. Expenditures on Agricultural Research and Extension, 1974-1978 ................................... 67 36. Distribution of EMBRAPA Commodity-Specific Research, by Crop, Average 1975-77 ........... ................... . 68 37. Regional Distribution of Expenditures by EI4BRAPA State Units, 1975-1979 ............... .. .......... . ... 68 38. Brazilian Exports by Sector and Degree of Processing, 1964/68-1978 ................. ............................... 73 39. Average Annual Rates of Growth of Exports, 1969-1977 .......... 74 40. Average Annual Rates of Growth of Export Valise and Volume, 1969-1978 ................ . .............. ... 75 41. The Diversification of Agriculture-based Exports, 1964-1977 .......... .......................................... 77 42. Structure of Subsidies and Taxes Affecting Agriculture- based Exports in 1975 ...................... I ............. 79 43. Soybean Output, Area Harvested and Yields, 1969-1980 ......... 81 44. Soybean Output and Yields by Major_Producing State, 1969-1978 82 45. Comparative Costs of Soybean Production in U.S. and Brazil, 1978/79 Crop Year .................. 83 46. Producer Prices for Soybeans in Brazil and U;iited States, 1970-1978 ............................... ...... 85 47. Share of Soybeans and Total Exports and Agriculture- based Exports, 1967-1980 .................................... 86 48. Brazil's Share of World Trade in Soybean Products, 1970-1978.. 87 49. Export and Domestic Markel Shares of Total Soybean Production, 1970-1978 ............................... ..... 89 50 Average Annual Export Prices of Soybean Products, 1972-1978 .. 90 51. Sugar Export Earnings, Quantum Exported and Average Annual Export Prices, 1964/68-1980 .......................... 93 52. Relative Shares of Crude and Refined Sugar in Total Sugar Exports and Share of Sugar in Total Exports, 1964/68-1980 .... 94 53. Area Planted, Production and Yields for Sugarcane in State of Sao Paulo, 1971/72-1978/79 ..................... 95 54. Comparative Yields of Sugar Production in the Center-South and North-Northeast, 1961-1977 ............................... 96 55. Alcohol Production, by type, 1967-1979 ......-.....-. ..... 98 56. Estimated Additional Land Needed to Meet 1985 Sugar and Alcohol Targets ............................... . 99 57. Yield Levels Used to Assess Land Requirements of 1985 Sugar and Alcohol Production Targets. ............... 100 58. Additional Land Needed to Meet 1985 Sugar and Alcohol Targets -- Three Estimate Levels ........... o....... 102 59. Projected Land Needs of Alternative Levels of Alcohol Demand.. 107 60. Land Use Patterns, 1970 and 1975 ...... -.... ............ ..... 108 61. Land Use in Sao Paulo by Major Regions, 1978 ................. 109 LIST OF TABLES (Continued) Annex Tables Page A.1 Per Capita Production and Price Per Calorie of Selected Food Basket, 1962/65-1976 ......... *i ............................. 124 A.2 Corn Area, Production, Yields and Trade, 1970-1980 .......... 125 A.3 Corn - Distribution of Area Planted by Major Producing State and Size of Holding, 1975 ........ ..................... 127 A.4 Use of Corn and Mixed Feeds, 1971-1979 ........... ........... 128 A.5 Estimated Effects of the Wheat Program on Corn Output and Prices .................................................. 129 A.6 Brazil and U.S. Producer Prices for Corn, 1970-1978 ......... 131 A.7 Rice Area, Production, Yields, Imports and Exports, 1970-1980 ............................. 132 A.8 Regional Distribution of Rice Area and Output, 1971/73-1975/77 ..................... .. 133 A.9 Rice Yields by Regions, 1971/73-1975/77 .................... 133 A.10 Distribution of Area Planted in Rice, by Size of Holding, Rio Grande do Sul and Mato Grosso, 1975 ..................... 135 A.11 Brazil and U.S. Producer Prices for Rice, 1970-1978 ......... 136 A.12 Domestic Resource Cost of Rice Under Alternative Assumptions, May 1979 ............................... 137 A.13 Black Beans - Area, Production, Average Yields and Trade, 1970-1980 .. ......................... 139 A.14 Manioc - Area Harvested, Production and Yields, 1970-1980 ... 141 A.15 Exports of Coffee Products, 1964-1980 .......................... 144 A.16 Price and Quantum Indexes for Coffee Exports, 1964/68-1980 145 A.17 Production, Domestic Consumption, Exports and Annual Carry-Over of Coffee, 1968-1978 ............................. 147 A.18 Regional Pattern of Coffee Production, 1969/70-1978/79 ...... 148 A.19 Area in Coffee, Output, Yields and Real Prices Received by Coffee Growers in Sao Paulo, 1960-1970 ...................... 149 A.20 Coffee Varieties Planted and Age Distribution of Coffee Trees in Sao Paulo, 1958 and 1975 ......... .................. 151 A.21 Distribution of Capital Equipment and Labor Force Utilization on Sao Paulo Coffee Farms, by Farm Size, 1975 ............... 152 A.22 Cotton Output, Domestic Consumption and Exports, 1972-1978 .. 154 A.23 Cotton Exports by Product, 1964/68-1979 ........................ 155 A.24 Price and Quantum Indexes for Cotton Export Products and their Shares in Total Exports, 1964/68-1978 ................. 156 A.25 Cotton Output, Area Cultivated and Average Yields, by Region, 1947-1978 ........................................... 158 A.26 Rates of Profitability of Cotton and Soybeans, Sao Paulo, 1971-1979 ................................................. 159 A.27 Cotton and Soybean Cultivation in Sao Paulo and Parana, 1971/72-1977/78 .............................................. 159 A.28 Production and Export of Cocoa Beans and Derivatives, 1965/66-1977/78 ................................. ........... 162 A.29 Relative Export Value Shares of Cocoa Products, 1969-1978 ... 163 A.30 Relative Share of Cocoa Products in Value of Total Exports, 1969-1979 .................................................... 163 A.31 Export Price Indexes for Cocoa, 1970-1980 ................ 164 A.32 Indexes of Prices Received and Price Paid by Cocoa Farmers, 1966-1980 ........................................ .......... 165 A.33 Cocoa - Area Planted and Harvested, Production and Average Yields, 1969/70-1979/80 ........................................ 166 A.34 Ratios of Average Annual Export Prices for Cocoa Beans and Derivatives, 1967-1977 .................................. 168 Chapter I: An Overview of Agricultural Policy and Performance 1. Discussions of agricultural policy in the development literature are generally concerned with facilitating the long-term transfer of capital, labor, raw materials, and wage goods in favor of the secondary and tertiary sectors of the economy. Agricultural policy in practice, however, is made in the short-term context of variable weather conditions, unstable world market prices, and the shifting vectors of domestic political influences. Decisions made to resolve a short-term problem may at times diverge from the requirements of long-term objectives, and, given the administrative inertia and vested interests that slow policy reversal or change, such aberrations tend to accumulate over time, obscuring their net effect on sectoral performance. (Similar observations could, of course, be made about any area of public policy.) 2. Reflecting both a growing concern on the part of policy makers regarding the distortions that may have accumulated and a changing perception of agriculture's importance to the economy, Brazil has recently been rethinking many of its basic agricultural policies as well as the overall macro-economic framework affecting the sector. This chapter will briefly review the general policy "atmosphere" that has prevailed in recent decades, including some of the factors which have led to the current review, and describe aggregate sectoral performance over the past decade. Later chapters will treat in greater detail specific policy instruments -- trade barriers, price controls, etc. -- and their impacts on the performance of export and domestic food crops generally and on specific major crops in both subsectors. A. The Historical Importance of Agricultural Exports 3. The historical evolution of the Brazilian economy, and indeed of the society as a whole, has frequently been described in terms of a series of waves, each emanating from a specific product export boom beginning with Brazilwood in the early 1500s. 1/ With the exception of a gold and diamond boom during the 1700s, these waves have been associated with agricultural exports -- sugar, cotton and tobacco, cocoa, rubber and coffee. The Brazilian economy has obviously grown too large and diversified to be viewed any longer in this monocultural fashion, but export markets and policies geared to them have continued to play a major role in the growth and composition of agricul- tural output. Agricultural growth over the past decade, for example, has been heavily influenced by the rapid expansion of soybean production and export. Meanwhile, a new wave associated with sugar -- this time for energy import substitution rather than export -- is in preparation. 4. The impacts of successive export booms on the national economy have been far reaching, influencing such basic socio-economic characteristics as the size and degree of decentralization of government, the location of industrial activity, land tenure, regional income disparities, the inter- personal distribution of wealth, the racial composition of the population, and attitudes toward savings and consumption. Within the rural sector itself, each of the waves inevitably had an impact on the composition of output and 1/ See, for example: Ruy Miller Paiva, et al, Brazil's Agricultural Sector, Sao Paulo, 1973, Ch. 1. -2- distribution of wealth and incomes that persisted long after the original market stimulus to the boom may have passed. Each boom, for example, gave rise to associated investments and institutional developments in transport, communications, research, specialized credit, and other quasi-public support agencies, producers associations, downstream processing industries, etc., which continue to afford the benefitted crop a comparative advantage among domestic crops that can withstand wide shifts in relative product prices. B. The Policy Environment Since World War II 5. In addition to the exogenously stimulated export booms, government policies toward agriculture have been influenced by gradually shifting percep- tions regarding both the importance of the sector in national development and the resource constraints on its growth. During the 1950s and early 1960s, agriculture and exports generally were penalized by a battery of policies intended to promote import substitution. 1/ An overvalued exchange rate and direct controls to assure adequate supplies to the local market discouraged exports of both unprocessed and processed farm products, 2/ at the same time that price controls on urban wage goods inhibited the expansion of food production for the domestic market. Real expenditures on agricultural research declined during this period, and measures to stabilize farm prices were indifferent and ineffective. On the other hand, the availability of a large land frontier and the extension of the highway network into the interior, abundant labor, increasing though still modest supplies of subsidized credit, direct subsidies to fertilizer use, and preferential treatment accorded imported agricultural inputs kept production costs low to farmers having access to these benefits. 6. Price controls were eased after 1964, and quantitative export controls were eliminated. A significant liberalization of trade policy followed after 1967, and the introduction of a crawling-peg foreign exchange regime reduced the implicit taxation of exports through overvaluation of the cruzeiro. These policy changes, combined with the bouyant expansion of world trade and rising international prices for agricultural products in the early 1970s, provided a strong incentive for the rapid growth of export crops, chiefly soybeans, and resulted in a substantial shift of land use in their favor. Meanwhile, import substitution moved into the farm input sectors, and the subsidization of manufactured exports led to a sharp increase in the local processing of agricultural products for export. 7. During this period also the availability of subsidized credit for agriculture was rapidly expanded, compensating its recipients for the continued, though reduced, overvaluation of the cruzeiro and for the higher input costs associated with import substitution and rising rural wages, while also facil- itating the shift in land use and increasing farm mechanization. Agricultural research, the minimum price program, and other tools of agricultural policy 1/ For greater detail, see: Donald E. Syvrud, Foundations of Brazilian Economic Growth, Hoover Institution, 1974, Ch. IX; and Gordon W. Smith, "Brazilian Agricultural Policy," in Howard S. Ellis, The Economy of Brazil, U. of California Press, 1969, pp. 213-265. 2/ Agricultural prices were also relatively weak in world markets. -3- continued to play a relatively minor role, and credit emerged as the primary direct instrument of government policy affecting the growth and composition of sectoral output and the intrasectoral distribution of incomes and wealth. 8. The acceleration of inflation and deterioration of the balance of payments set in motion by the 1973 oil crisis resulted in a renewed tendency toward import protection, an intensified export push via the subsidization of manufactured exports, and the progressive restoratTion of price and agricul- tural export controls to slow the rise of urban living costs. Compensation for agriculture again came largely in the form of credit subsidies, although resources allocated to research were also greatly expanded and an effort has been made to widen access to the minimum price program. Consequently, the general policy bias in favor of manufacturing relative to agriculture, and within agriculture, in favor of those farmers with access to administered credit, was intensified. The favored farmers have, to a considerable degree, been those producing primarily for export (or import substitution) and gen- erally concentrated in the Southeast and South of the country. 9. The rapid expansion of manufactured exports, the substantial potential for efficient import substitution provided by its large and growing market, high international reserves and access to the increasingly liquid international financial market enabled Brazil to maintain a high economic growth rate after 1973, although somewhat reduced from the 1967-73 "miracle" years. Successive rounds of oil price hikes, however, combined with a sharply increased external debt burden and fears of rising protectionism against manufactured imports in the industrial nations, served to heighten both Brazil's sense of vulnerability to the external constraint and its appreciation of agriculture's importance to continued growth. This appreciation was enhanced also by two successive years of unusually poor harvest in 1978 and 1979, which contributed both to the acceleration of inflation and to the deterioration of the external accounts. 10. As a consequence, the present Government has placed upon agriculture a heavy responsibility for helping to dampen inflation through the expansion of domestic food production; and to alleviate the balance-of-payments constraint on overall growth, both by increasing exports and by reducing the economy's dependence on imported petroleum through the substitution of domestically produced sugar alcohol. In addition, the Third National Development Plan (1980-85) stresses agriculture's importance as a source of new employment opportunities, thus contributing to the relief of both rural and urban poverty. 11. Reflecting this increased priority, agricultural credit was again sharply expanded in 1979, and an effort was made to improve access to small and medium-sized farmers. Most price controls on agricultural products were removed during the last quarter of 1979, and the minimum price program was revamped with the intention of improving farm incentives. A new system of crop credit insurance was introduced, a special plan and incentives for the expansion of alcohol production were put into effect, a reform of land tax legislation was introduced, and increased attention was to be given to invest- ments in marketing infrastructure and research. -4- 12. Just as the appreciation of agriculture's role in overall Brazilian development has evolved, so have the domestic resource constraints on its growth. In particular, the easily (cheaply) exploited extensive frontier has largely disappeared; the incorporation of new lands into agricultural produc- tion will require larger investments in both research and infrastructure than in the past, and increased fuel prices have raised the cost of transport. Improvements in the productivity of land already under cultivation must receive increasing emphasis. Similarly, there is some evidence of growing labor scarcity in the rural areas, particularly of those labor skills required for the achievement of the desired increases in land yields. Greater invest- ments are thus also needed in human capital, irncluding the generation and dissemination of improved technology. C. Agricultural Performance Since World War II Crop Production 13. Brazil's gross domestic product has grown rapidly, averaging more than 7 percent per annum in real terms since the end of World War II. Agricultural value added over this period has expanded at an average annual rate of about 4.5 percent, its share of current price GDP declining from around 27 percent to 11 percent. Agricultural exports, including processed farm products, have grown 17 percent per year in nominal terms since 1965 and have accounted for two-thirds to three-fourths of total exports through the post-war period. Agriculture continues to employ about 30 percent of the Brazilian labor force and supports directly about 38 percent of the population. Although these proportions have, as expected, been falling through time, the. sector continues to provide expanding employment opportunities in absolute terms. 14. Aggregate agricultural performance has thus been remarkably good, and the sector has played its development role of contributing foodstuffs, savings, raw materials, labor, and foreign exchange to the secondary and tertiary sectors. There have been large variations through time, however, in the relative performances of the major agricultural product groups and among the several regions of the country. Furthermore, output gains for most products have derived mainly from the expansion of land area rather than from increased yields. While neither surprising nor deplorable for a country enjoying Brazil's vast land resources, this fact takes on increasing importance as costs rise along the extensive frontier. 15. Table 1 shows the changing structure of crop production in current value terms, from 1952 to 1977. A considerable amount of attention in recent years has been devoted to the strong growth of Brazilian export and industrial crops relative to domestic food crops since the mid-1960s. 1/ The following 1/ Any such disaggregation is necessarily oversimplified and, to a degree, arbitrary. Substantial quantities of coffee, sugarcane and soybean products, for example, are consumed domestically, while the recent growth of output of oranges has gone largely to the export of processed concen- trates. A detailed account of this issue and additional references may be found in: Jose Roberto Mendonca de Barros and Douglas H. Graham, "Agricultura brasileira e o problema da producao de alimentos," Pesquisas de Planejamento Economico, Vol. 8, No. 3, dezembro de 1978, pp. 695-726. Further observations are offered in Chapter IV of this report. 5 Table 1: Structure of Crop Production, 1952/54-1977 (Percent) Category/Crop Percent of Total Value of Principal Crops 1952-54 1966 1973 1977 (average) Cereals 29.5 30.0 25.6 20.4 Wheat 3.3 2.5 3.5 2.8 Rice 13.6 14.2 10.2 7.5 Corn 12.6 13.3 11.9 10.0 Root crops 10.3 15.6 12.7 13.6 Manioc 6.4 7.7 8.0 10.7 White potatoes 2.5 3.6 2.5 1.9 Sweet potatoes 0.9 1.3 0.8 0.5 Peanuts 0.6 3.0 1.3 0.5 Black beans 5.5 9.5 10.0 6.5 Fruits and vegetables 5.3 8.7 7.8 8.8 Pineapples 0.3 0.4 0.5 0.3 Oranges 1.3 2.0 3.0 3.5 Bananas 2.3 3.7 2.2 2.6 Tomatoes 0.7 1.7 1.4 1.7 Onions 0.7 0.9 0.8 0.6 (Subtotal: domestic food crops) (50.7) (63.8) (56.2) (49.3) Export and industrial crops 49.3 36.2 43.8 50.7 Soybeans 0.2 1.4 12.9 17.3 Cocoa 2.5 1.6 2.3 4.2 Coffee 27.5 10.6 9.3 13.1 Tobacco 1.3 1.5 1.4 1.6 Sisal 0.3 0.8 1.0 0.3 Sugarcane 6.2 10.8 7.4 8.5 Cotton 10.9 8.4 9.0 5.3 Coconut 0.6 1.1 0.4 0.4 Total 100.0 100.0 100.0 100.0 Source: Appendix Table 1.1. - 6 - chapters will also examine this issue. It is noteworthy, however, that quite the opposite trend prevailed, in terms of output value, during the preceding decade and a half. Thus, although the share of industrial and export crops in the total value of crop production rose from 36 to 51 percent between 1966 and 1977, this growth, in simple aggregate terms, only succeeded in restoring the ratio of the early 1950s. The major story within these aggregates was the dramatic relative decline in the importance of coffee and the even more dramatic rise in the importance of soybeans. Among other major crops, the relative share of cotton had by 1977 fallen by half compared to the early 1950s, while the share of sugarcane oscillated through a wide range reflect- ing its unstable world price and, more recently, the impact of the alcohol program. 1/ 16. Among the domestic food crops, the relative share of the major cereals, particularly rice, has declined steadily over the past 25 years, while that of manioc has grown rather steadily. The share of black beans (feijao), the other principal staple, grew rapidly through the 1950s and '60s but receded sharply since the early 1970s. 2/ 17. The relative decline of coffee and growth of soybean production have taken place almost entirely in the southern and southeastern states of Brazil. 3/ The shifts occurring in manioc and cotton, on the other hand, have been of major importance for the agriculture of the Northeast. Manioc is also the principal staple of the North. Sugarcane, black bean, and rice production are important for all three of the regions so far noted, the last of these products also having major significance for the farmers of the North and Center-West. 1/ Brazilian sugar growers are largely insulated from world market fluctuations by the marketing activities of the Institute of Sugar and Alcohol. Thus producer prices for sugar have been among the most stable in Brazil (see Table 12). 2/ The reliability of production data for rice, beans and manioc is probably somewhat less than for other crops because of the frequently shifting nature of their cultivation, their appearance as a temporary first crop in frontier areas as well as in mixed-crop stands in older areas, and the high proportions consumed on the farm. 3/ See Appendix Tables 1.2 and 1.3. The following regional breakdown of states and federal territories is used throughout this report: North: Rondonia, Acre, Amazonas, Roraima, Para, and Amapa; Northeast: Maranhao, Piaui, Ceara, Rio Grande do Norte, Paraiba, Pernambuco, Alagoas, Sergipe, and Bahia; Southeast: Minas Gerais, Espirito Santo, Rio de Janeiro (including the former Federal District and later State of Guanabara), and Sao Paulo; South: Parana, Santa Catarina, and Rio Grande do Sul; and Center-West: Mato Grosso (including the new State of Mato Grosso do Sul), Goias, and the present Federal District. -7- Table 2: Rates of Growth of Output, Major Crops, Selected Sub-Periods 1955-1977 (Percent) Category/Crop Average Annual Growth RatedJ 1955-65 1966-77 1966-79 Cereals 5.8 (.95) 5.8 (.93) 4.7 (.89) Wheat -5.3(-.68) 13.4 (.77) 12.1 (.81) Rice 7.5 (.97) 3.4 (.80) 2.3 (.67) Corn 5.3 (.95) 4.2 (.96) 2.8 (.78) Root crops 6.0 (.99) -0.8(-.43) -Q.7(-.47) Manioc 5.8 (.97) -0.8(-.35) -0.9(-.50) White potatoes 3.1 (.96) 2.3 (.73) 2.9 (.84) Sweet potatoes 5.7 (.98) -5.1(-.85) -7.0 (.89) Peanuts 15.8 (.93) -7.5(-.78) -7.3(-.82) Black beans 4.3 (.93) -0.8(-.29) -0.8(-.35) Fruits and vegetables 5.6 (.99) 7.2 (.99) 7.2 (.99) Pineapples 4.8 (.95) 5.5 (.94) 5.0 (.95) Oranges 5.7 (.99) 12.1 (.98) 12.1 (.99) Dananas 5.4 (.98) -0.8(-.18) -0.5(-.16) Tomatoes 8.5 (.97) 5.8 (.92). 6.4 (.95) Onions 3.1 (.80) 5.1 (.90) 6.6 (.91) (Subtoali: Domes tic food crops) 5.7 (.97) 3.8 (.95) 3.3 (.94) Export and industrial crops 9.4 (.72) 22.7 (.98) 19.2 (.96) Soybeans 17.0 (.97) 37.6 (.99) 30.4 (.96) Cocoa -0.9(-.43) 3.2 (.63) 3.8 (.75) Coffee 11.9 (.66) -4.8(-.42) -2.0(-.21) Tobacco 5.5 (.93) 3.0 (.81) 4.3 (.87) Sisal 10.9 (.98) -3.2(-.62) -3.2(-.70) Sugarcane 5.8 (.99) 3.8 (.92) 4.7 (.94) Cotton 6.2 (.90) -1.1(-.24) -1.7(-.41) Coconut 6.6 (.98) -4.8(-.94) -4.1(-.93) (Ex. soybeans) 9.3 (.71) 0.0 (.03) 1.0 (.38) Total 7.6 (.83) 14.8 (.99) 12.5 (.97) (Ex. soybeans) 7.6 (.83) 2.7 (.95) 2.6 (.96) a/ Calculated as the antilog of the slope of the least-squares trend line relating x to ln y, where x is time and y is annual output. Values given in parentheses are calculated correlation coefficients. Growth rates of aggregates are calculated using value weights of 1952-54 and 1973, respectively. Source: Appendix Tables 1.7a, 1.7b, and 1.7c. - 8 - 18. Trends in the value of production are the combined result, of course, of output and price trends. Table 2 summarizes the physical growth of output of 21 major crops during the periods 1955-65, 1966-77 and 1966-79. 1/ It can be seen that, in volume terms, the growth of output of export and industrial crops exceeded that of domestic food crops in both decades. The divergence in the growth rates of the two crop categories widened sharply over time, as the growth of domestic food crop output fell from 5.7 to 3.8 percent and that of export and industrial crops accelerated from 9.4 to 22.7 percent per annum. This divergence is due entirely, however, to the more rapid growth and increas- ing value weight of soybeans. With soybeans removed from the index, export and industrial crop growth in 1966-77 falls to virtually zero, and the average annual growth of total crop output drops from 14.8 to 2.7 percent. 19. In addition to soybeans, significant output growth since 1966 has been exhibited by wheat, oranges, and garden fruits and vegetables, while the production of beans, manioc, cotton, coffee, and bananas, among others, declined. 2/ Assuming an income-elasticity of demand for food of about 0.5, it would appear from these data that output of the major food crops, with the possible important exception of black beans, kept up with or exceeded the growth of demand during the 1955-65 period, but fell significantly below it in the following decade. 20. Although the hypothesized shortage of domestic foodstuff production since 1966 is not evident in available foreign trade statistics, except for the bad harvest years of 1978 and 1979, some shortfall of food production relative to demand is suggested by the price data summarized in Table 3. Retail food prices have risen little relative to the general price level over the past dozen years, but prices paid to the farmers have risen considerably more rapidly. 3/ The consumer in general has apparently been protected to a large extent from these price pressures by retail price controls and government subsidies. Some of the difference may also be accounted for by productivity improvements and competition in the transport, processing and marketing sectors. 1/ All growth rates used in this report, unless otherwise indicated, are calculated as the antilog of the slope of the least-squares trend line relating t to ln X, where t is time and X is the dependent variable. In the immediate case above, X is the volume of output of the respective crops. The periods 1966-77 and 1966-79 are given separately to show the impact of the two bad harvest years 1978 and 1979. The discussion that follows generally refers to 1966-77. 2/ Correlation coefficients are given in parentheses. The identified trend lines are not statistically significant in all cases. 3/ While the general purchasing power of a unit of farm output has increased, an assessment of production incentives must, of course, include an exam- ination of farm input costs. -9- Table 3: Real Agricultural Price Trends, 1966-1980-J Producer Prices b/ Wholesale prices Retail Food Prices Years Food Animal domestic Sao Rio de Crops Products foodstuffs Paulo Janeiro 1966 100 100 100 100 100 1967 95 92 98 96 96 1968 88 85 92 94 87 1969 99 85 94 97 89 1970 101 91 96 95 93 1971 111 96 103 97 95 1972 114 104 105 100 95 1973 143 129 106 104 95 1974 139 148 105 104 100 1975 150 132 106 105 99 1976 188 115 111 100 100 1977 186 117 111 97 102 1978 175 128 118 99 103 1979 163 154 121 101 108 1980 178 140 129 92 101 a/ Deflated by General Price Index (FGV No.2). b/ National averages. c/ Weights after 1972 differ from those of previous periods so that numbers are not exactly comparable. Source: Appendix Tables 3.0, 3.0a, and 3.0b. - 10 - 21. Table 4 summarizes the expansion of land under cultivation and average yields per hectare over the 1955-65 and 1966-77 periods. 1/ During the earlier period, land devoted to domestic food crops expanded more rapidly than that dedicated to export and industrial crops -- 4.4 percent and 3.6 percent per year, respectively -- despite an absolute decline in wheat area. Although data for the two periods are not exactly comparable (see footnote 1), this relationship appears to have been reversed in 1966-77, the harvested food crop area slowing to a growth rate of 3.1 percent while the export and industrial crop area increased 4.8 percent per year. The latter growth was due entirely, however, to soybeans, whose area expanded 31 percent per year; the area devoted to other export and industrial crops actually declined in absolute terms. Remarkable expansion also occurred in area under wheat (15 percent per annum) -- wheat is commonly alternated with soybeans in the off-season -- and oranges (11 percent per annum). 22. In only a few of the major crops have improved yields been an important source of output growth. Over the pasL decade, the most important yield increases have been achieved for soybeans, cocoa, and garden fruits and vegetables. Declining yields are reported for several basic food crops including manioc, black beans, wheat and rice. 2/ Livestock Products 23. The lack of consistent and reliable statistics regarding livestock production results in most treatments of Brazilian agriculture giving scant attention to this important subsector. Brazilian livestock herds are among the largest in the world (Appendix Table 1.11), and their products are an important source of protein to the domestic population. 24. Milk production (Appendix Table 1.12) was essentially stagnant between 1966 and 1972, growing only slightly more than one percent per year. From 1972 to 1976, however, production growth averaged almost 10 percent per year in response to higher producer prices and consumer subsidies. Production and prices have apparently tapered off since 1976, and the sector has occasion- ally been disrupted by producer refusals to deliver milk to the market. The composition of dairy output has also shifted sharply away from fluid milk and toward processed products--powdered milk, cheese, yoghurt and ice cream. Retail price controls on fluid milk are the primary explanation for this phenomenon. 1/ Since 1966, the crop survey has recorded land harvested rather than land cultivated. Assuming that land planted but left unharvested would typically have a lower potential yield than that harvested, the available data probably overestimate absolute average yields since 1966. 2/ In the case of the cereals, yields have been highly variable, and the calculated trend line is not statistically significant. Average yields are not a fully satisfactory indicator of agricultural productivity as they do not control for the differential application and costs of other inputs (e.g. fertilizer) or for shifts in the location of production to soils of different fertility. Table 4: Growth Rates of Area Cultivated/Harvested and Average Yields, Major Crops, 1955-65 and 1966-77 a! (Percent) Category/Crop ----------1955-65------------- ----------1966-77---------- Area Cultivated Yields Area Harvested Yields Cereals 4.2 (.97) 3.8 (.96) Wheat -4,8(-.69) -0.5(-.05) 14.9 (.95) -1.2(-.15) Rice 6.5 (.95) 0.9 (.49) 3.4 (.86) 0,0(-.03) Corn 4.5 (.97) 0.8 (.50) 2.3 (.95) 1.9 (.88) Root crops 5.6 (.99) -0.9(-.56) Manioc 4.7 (.97) 1.1 (.88) 1.1 (.80) -1.9(-.81) White potatoes 1.2 (.89-) 1.8 (.97) -l.1(-.67) 3.5 (.92) Sweet potatoes 4.2 (.97) 1.4 (.96) -3.4(-.87) -1.5(-.77) Peanuts 14.1 (.96) 1.5 (.45) -8.3(-.87) 0.6 (.29) Black beans 4.2 (.94) 0.1 (.06) 2.3 (.89) -3.1(-.82) Fruits and vegetables 5.3 (.99) 5.7 (.95) Pineapples 5.4 (.96) -0.5(-.41) -0.7(-.31) 6.3 (.98) Oraulges 6.9 (.99) -1.2(-.78) 11.2. (.94) 0.9 (.27) Bananas 4.7 (.98) 0.7 (.63) 2.7 (.95) -3.4(-.67) Tomatoes 5.4 (.96) 2.9 (.95) 2.1 (.97) 3.6 (.87) Onions 3.2 (.93) -0.2(-.11) 1.4 (.76) 3.6 (.93) (Subtotal: Domestic food crops). 4.4 (.98) 3.1 (.96) Export and industrial crops 3.6 (.96) 4.8 (.96) Soybeans 21.5 (.98), -3.7(-.78) 0.-9 (.99) 5.1 (.87) Cocoa 2.8 (.85) -3.5(-.89) -0.5(-.30) 3,7,-(.62) Coffee 1.2 (.35) 10.6 (.69) -5.4(-.79) 0.9 (.13) Tobacco 4.3 (.93) 1.1 (.65) 0.5 (.23) 2.4 (.87) Sisal. 9.9 (.99) 1.0 (.37) -1.5(-.53) -1.7(-.37) Sugarcane 4.4 (.99) 1.3 (.92) 2.9 (.95) 0.9 (.72) Cotton 4.6 (.96) 1.5 (.47) -0.3(-.14) -1.0(-.37) Coconuts 3.6 (.99) 2.8 (.91) 4.5 (.97) -8.8(-.97) Total 4,1 (.99) 3.7 (.99) CExcl, soybeans) 2,0 (.96) a/ (rowth rates calculated as the antilog of the slope of the least squares line relating x and log y where x is time and the y's are area cultivated/harvested anld yields, respecti-rely. Correlation coefficients are giyen in parentheses. Source: Appendix Tables 1.4a, 1.5a, and 1.8a. - 12 - 25. Beef production also rose rapidly in the mid-1970s, the slaughter rate reaching a peak of 2.4 million MT (carcass weight) in 1977 (Appendix Table 1.13). The slaughter fell in both 1978 and 1979, however, and Brazil became a net importer of beef, primarily from Uruguay and Argentina. 26. One of the major success stories of the Brazilian livestock subsector has been the rapid growth of the poultry industry. The slaughter rate more than doubled from a carcass weight of 373,000 MT in 1975 to 717,000 MT by 1979. The export of frozen chickens totaled more than US$72 million in 1979 as compared to less than $20 million three years earlier. The poultry industry has become an important consumer of corn, and there is some concern among poultry raisers that slow growth of corn production may impose a serious constraint on their own continued expansion. The industry is also the main consumer of soy meal in Brazil. Foreign Trade 27. The importance of the agricultural sector in Brazil's foreign trade is illustrated in Table 5. Agriculture-based exports, both processed and unprocessed, increased at an average annual rate of 17 percent (in nominal terms) between 1965 and 1977 and, although the share has tended to decline slowly over time, had never before 1978 accounted for less than two-thirds of total exports. 1/ If coffee exports, which grew relatively slowly (8 percent per year),. are excluded, other agriculture-based exports grew almost 22 percent annually. Excluding both coffee and soybeans (the latter experi- encing a 41 percent annual rate of export growth), remaining agricultural exports still show a growth rate of more than 20 percent per year. 28. The balance of trade in agriculture-based products was strongly positive throughout the period, the surplus, in current dollar terms, growing over 16 percent per year before declining in 1978. Because of the rapid growth of nonagricultural imports, however, the agricultural trade surplus tended to cover a declining share of the deficit generated by other sectors, reaching a low in this regard of 40 percent in 1973 before rebounding to 87 percent in 1977. In the future, as noted earlier, agriculture is expected to finance not only a substantial proportion of nonagricultural imports, but also to substitute for a significant fraction of the largest of these, namely petroleum. 1/ The data above include some nonagricultural products -- e.g., clothing made from synthetic fabrics. Not included are some agricultural products classified as chemicals, e.g., menthol, components of tools and machinery, e.g., handles, and other miscellaneous products or components. The values involved are small, however, and do not affect significantly the orders of magnitude and trends shown. Table 5: Trade Balance, Products of Agricultural Origin lq65-79 (Millions of U.S. dollars) Year ()(2) (3) (4) (5) (6) (7) (8) Agriculture- Agriculture- Overall (1) as (2) as (3)as % of non- (3) as % of non- based Exports based Imports (l)-(2) Trade of total of total agricultural agricultural FOB CIF Balance Exports Imports Imports deficit 1965 1,335.9 212.8 1,123.1 654.9 84 23 154 240 1966 1,502.2 280.3 1,221.9 438.0 86 22 119 179 1967 1,377.6 341.3 1,036.3 212.7 83 24 94 126 1968 1,608.2 374.4 1,233.8 26.2 85 20 83 102 1969 1,928.2 336.6 1,591.6 318.0 83 17 96 125 1970 2,142,8 357.8 1,785.0 232.0 78 14 83 122 1971 2,180.5 465.6 1,714.9 -797.5 75 13 53 68 1972 3,160.0 538.3 2,621.7 -792.1 79 11 62 77 1973 4,873.8 998.2 3,875.6 -799.8 79 14 65 83 1974 5,752.8 1,556.4 4,196.4 -6,217.0 72 11 33 40 1975 5,721.8 1,184.8 4,537.0 -4,922.6 66 9 37 48 1976 7,022.6 1,425.2 5,597.4 -3,597.7 69 10 46 61 1977 8,624.2 1,234.4 7,389.8 -1,136.8 71 9 61 87 1978 8,040.8 1,891.6 6,149.2 -2,395.4 64 13 47 72 1979 9,098.8 2.777.9 6,320.9 -4,559.9- 60 14 37 58 Source: Appendix Tables 2.1 and 2.2. - 14 - D. Outline of the Report 29. Chapter II will review some of the policies which have influenced the evolution of Brazilian agriculture over the past decade and a half. Particular attention is given to agricultural credit, the minimum price program, and the subsidization of wheat. Chapter III will review policies affecting agriculture-based exports. Chapter IV will examine the agricultural impact of the alcohol program, especially its implications for land use patterns. A summary of the report's principal findings and recommendations is found in Chapter V. A more detailed examination of specific crop per- formance is found in Annex I. - 15 - Chapter II: Government Policies Toward Agriculture A. Introduction 30. A considerable amount of attention has been given in Brazil in recent years to the impact on the agricultural sector of the import-substitution industrialization policies followed since the end of World War II. 1/ Other things being equal, these policies, which included inter alia a chronically overvalued exchange rate, export taxes, quotas and prohibitions, price controls on basic foodstuffs, and high tariff and nontariff protection of domestic industry resulted in a substantial transfer of resources from agriculture to the rest of the economy and a general reduction of production incentives to farmers. Perhaps as damaging as the policies per se to agricultural incentives were the rapidity and frequency with which they were altered, usually in ad hoc response to a balance-of-payments crisis or domestic supply shortage. 31. A gradual process of liberalization was instituted after 1964 with the reduction of export taxes, the elimination of export controls, the unification of the exchange rate and introduction of a crawling peg, and broad tariff reductions. This tendency was reversed again, however, after 1973 amid the increasing balance-of-payments difficulties associated with the rise in world oil prices. In an effort to sustain export growth and maximize its domestic value added, substantial subsidies were introduced for manufac- tured exports, and new limitations were placed on the export of unprocessed agricultural products. 32. The primary means by which recent governments have sought to repair the damage to general agricultural incentives caused by the above policies and to stimulate the sector's growth have been the provision of credit at preferen- tial interest rates and the expansion and improvement of the minimum price guarantee program. 2/ Increased resources have also been devoted in recent years to agricultural research, extension, and infrastructure. A land tax first introduced in 1964 has also been recently revamped in an effort to stimulate more efficient land use. 1/ See, for example, M. de Barros and Graham, op. cit.; Eliseu Roberto de Andrade Alves and Affonso Celso Pastore, "Import Substitution and Implicit Taxation of Agriculture in Brazil," American Journal of Agricultural Economics, December 1978, pp. 865-871; Alberto Veiga, "Efeitos da politica comercial brasileira no setor agricola," in Claudio Contador (ed.), Tecnologia e Desenvolvimento Agricola, IPEA/INPES, Rio de Janeiro, 1975, pp. 285-308, and Robert L. Thompson and G. Edward Schuh, "Po9litica comercial e exportacao: o caso do milho no Brasil," Pesquisas de Planejamento Economico, dezembro de 1978, pp. 663-694. 2/ In the cases of some specific export commodities, e.g. coffee and cocoa, the compensation has been more direct, in the form of earmarking all or a portion of export tax revenues to special programs of credit, technical assistance, price guarantees, or other support to the affected growers and their organizations. - 16 - B. Agricultural Credit 1/ 33. The National System of Rural Credit is comprised of the Central Bank, Bank of Brazil, other federal and state financial institutions, and the private commercial banks. In terms of numbers of offices, loans, and lending volumes, the Bank of Brazil is by far the most important of these, its share of total agricultural credit having risen from 47 percent in 1969 to 65 percent in 1979 (see Appendix Table 4.1). Agricultural credit policy is determined, as are monetary and credit policies generally, by the National Monetary Council, chaired by the Minister of Finance. Control over the execution of policy is vested in the Central Bank. 34. Approximately 45 percent of total credit to agriculture on average, is intended to cover short-term production costs (Appendix Table 4.3). Rlepay- ment terms range from six months to two years depending on the crop and activity being financed. Investment credits are available for terms ranging typically from five to twelve years depending on the nature of the asset or activity; these loans have accounted for about 29 percent of total credit to the sector over the last decade. Marketing credits, which have accounted for the remain- ing 26 percent of the total, are largely associated with the minimum price program and will be discussed in the following section. 35. Roughly one-fifth of total agricultural credit (one-fourth of production and investment credit) is disbursed through a large number (-.1.out 170) of special prograiis directed to particular regions, groups, or activities. These funds are administered by the Central Bank, with resources derived from federal budgetary transfers, Central Bank advances and external borrowings. Credit under the minimum price program has been the sole responsibility of the Bank of Brazil as agent for the Commission for Production Financing (CFP), the price guarantee agency, but the program was opened to private commercial bank participation in 1980. The remaining "ordinary" production, investment, and marketing credits come largely from the resources of the Bank of Brazil and the 15 percent of sight deposits commercial banks are required by law to channel to agriculture. 2/ Some part of Bank of Brazil resources originate also, in effect, from the Central Bank through the large floating debt (conta de movirento) the former holds with the latter. 36. As noted above, credit has been the principal tool with which successive Brazilian governments have attempted to compensate the sector for the discriminatory impact of other policies and to stimulate agricultural investment and output. Table 6 illustrates the extraordinarily rapid growth of credit to agriculture (18.5 percent per year in real terms) over the last decade. While the net value of agricultural output slightly more than doubled from 1969 to 1976, credit flows to the sector rose 4-1/2 times 1/ Agricultural credit in Brazil is also discussed in World Bank Report No. 2790a, Brazil: Financial Systems Review, November 1980. The present discussion borrows in part from that report. 2/ In December 1980 the National Monetary Council raised the mandatory percentage of sight deposits loaned to agriculture to 20. - 17 - Table 6: Growth of Agricultural Output and Total Credit Flows to Agriculture, 1969-1979 a/ (1969=100) Net Value of Agri- Crop Livestock Total Credit flow as % of Years cultural Output Credits Credits Total Net Value of Output 1969 100 100 100 100 45 1970 100 124 107 119 54 1971 116 143 125 137 54 1972 126 178 153 170 61 1973 159 245 230 241 69 1974 183 312 266 298 74 1975 191 445 410 434 102 1976 213 462 408 445 95 1977 256 450 281 397 70 1978 250 430 347 404 73 1979 268 532 439 503 85 a/ Deflated by General Price Index (FGV #2) Source: Appendix Table 4.1 and 4.2. in real terms. In 1975, the flow of credit to the agricultural sector actually exceeded the net value of output, as compared to a 45 percent ratio in 1969. Over the period 1969-76, real agricultural credit rose at an average annual rate of 24 percent. 1/ The growth of longer-term investment credits was particularly rapid, the real flow growing more than fivefold (Appendix Table 4.3). 37. The real flow of agricultural credit declined sharply (11 percent) in 1977, reflecting a continued high inflation rate in the face of a tightening monetary policy. The cutback was particularly sharp to the livestock subsector (31 percent) and, functionally, to investment credits (32 percent). The flow of short-term operating credit remained about constant. Total agricultural credit rose slightly in real terms in 1978, entirely as a consequence of increased credits to the livestock subsector; the flow of crop credits con- tracted. 38. In 1979, the Government declared its intention to exempt agricultural production credit from the ceilings placed on the Monetary Budget. In addition, the method of determining the amount of production credit for which a farmer was eligible was modified to untie it from the decisions regarding the levels of minimum prices. Previously the level of financing was determined by the formula: 1/ Compound rate of growth. - 18 - A . Y bP rc c where A is area planted; YrC is the expected average yield for the pertinent crop and region; b is a policy-determined coefficient; and P is the minimum price for the crop set by the National Monetary Council. Beginning with the 1979/80 crop year, the amount of production credit available for a particular crop was made a function of average production costs (valor basico de custeio - VBC) in the pertinent region, as determined by the CFP. Farmers in 1979 could borrow up to 100 percent of expected costs. Finally, an added effort was made to extend credit to the many small farmers in the more remote areas of the country who had theretofore not enjoyed effective access to institutional credit. For this purpose, the Bank of Brazil was establishing "advanced posts" in the outlying areas and was also experimenting with mobile units. Some 277 advanced posts had been set up by the end of 1979. 1/ 39. As a consequence of these measures, the real flow of agaricultural credit rose 25 percent in 1979, with production credit in particular expanding 31 percent. The volumes of credit to the livestock and crop subsectors grew at about the same percentage rates. 40. Table 7 records the numbers of loan contracts issued by the National System of Rural Credit during 1975-1979 and the first three quarters of 1980. Through 1978 the annual number of loans remained fairly constant at about 1.8 million, equivalent to slightly more than a third of the 5 million farm establishments enumerated by the 1975 agricultural census. Inasmuch as some farmers received more than one loan in a year, the actual proportion of farmers receiving credit from the formal financial system was considerably less, perhaps on the order of 20-25 percent. It is notable that the increment in the annual flow of agricultural credit between 1969 and 1976 going to this subset of Brazil's farmers was approximately equal in absolute magnitude to the increment in the net income of the entire sector. 2/ 41. Reflecting the Government's effort to widen the access to formal credit, the number of loan contracts jumped sharply to 2.4 million in 1979 and continued at slightly above that rate through the first nine months of 1980. A recent survey conducted by the Bank of Brazil suggests that about 31 percent of the nation's farmers were being reached by the formal credit system. In those municipalities where advanced posts had been established, the estimated coverage was "'l percent. 1/ This number had expanded to 513 by May 1981. In addition to a promotional function, the advanced post lowers the transport costs to the farmer of seeking and acquiring a loan. The amount of "red tape" facing the farmer has also been significantly reduced. In principle, all he now needs is a proposal for financing and the verification of an extension agent that he is a local farmer. 2/ As discussed later in para. 49, more than half of total credit to agricul- ture was accounted for by less than 5 percent of loan contracts. - 19 - Table 7: Number of Loans to Agriculture, 1975-1980 (III) (Thousands) Crop Livestock Year Contracts Contracts Total 1975 1,290 566 1,856 1976 1,320 512 1,832 1977 1,267 455 1,722 1978 1,332 564 1,896 1979 1,669 705 2,373 1980 (Jan.-Sep.) 1,396 475 1,871 Source: Central Bank 42. Interest charges on agricultural credit are heavily subsidized. Until 1979, interest rates were fixed in nominal terms. Ordinary production credits carried interest rates of 13 to 15 percent, with lower rates available for purchases of fertilizer and other inputs. Ordinary investment credits were charged nominal interest rates of 13 to 21 percent with lower rates available through many of the special programs. Interest rates on credits for storage under the minimum price program ranged from 15 to 18 percent. These rates compared with general price inflation of around 40 percent per year in 1976-78, and 77 percent in 1979. 43. Interest terms on most loans were changed for the 1979/80 crop year to include some element of monetary correction (price indexing). Specifically, financial charges on most official credits were to be calculated as: a. ORTN + i; where i is the nominal interest rate; ORTN is the monetary correction index applied to government bonds; and a is a coefficient set annually by the National Monetary Council. The intention of the new formula was to untie the passive link between the rates of inflation and credit subsidization and to provide the Monetary Council with a mechanism for gradually reducing and, perhaps, eliminating such subsidies altogether. However, the coefficient of correction (a) was set at 0.4 for most agricultural credit, and, at the same time, the ORTN index tended to fall increasingly behind the actual rate of inflation. Indeed, in January 1980 the Government pre-fixed mone- tary correction for the year at 45 percent, in effect reinstituting fixed nominal interest rates. Moreover, some of the special programs, particularly those for the Northeast, were exempted from even the partial indexing des- cribed. Thus, although some agricultural credits in 1980 carried nominal interest rates of up to 36 percent, with inflation running at around 100 percent per annum, agricultural credit subsidization, in fact, increased. 44. Several important additional measures were taken at the end of 1980 to raise the effective interest rates on rural credit. Formal indexing was dropped, but nominal rates were increased from 22.8 to 45 percent on most production credits, with the percentage of costs eligible for subsidized financing varying from 100 to 60 in inverse relation with the income of the borrower. Fertilizer credits, formerly available at zero interest, now receive the same treatment as other production credits. Interest rates on - 20 - investment credits were also increased. Machinery and equipment whose value does not exceed 100 MVR 1/ receive financing at 45 percent interest, while credits for more expensive machinery and equipment and for cattle and foresta- tion carry market interest rates. No distinction is made by size of borrower. (During 1980, small and mini-producers were charged 29 percent for investment credits, while medium and large farmers paid 38 percent.) The above-cited interest rates apply to farmers in the Center-South regions of Brazil. Pre- ferential treatment is still accorded programs in the Northeast, under which credits to small farmers are made available at interest rates as low as 12 percent. Finally, the mandatory fraction of commercial bank sight deposits devoted to agriculture was raised from 15 to 20 percent, with marketing credits no longer counted in meeting this requirement. 2/ 45. In view of the importance given to credit as the major tool of agricultural policy and the rapid expansion of its volume and level of subsi- dization over the past decade, remarkably little is known of its impact on investment and production. 3/ The very rapid growth of credit relative to output, however, raises serious doubts regarding the efficiency of this approach. Moreover, subsidization of the magnitudes being offered presents substantial incentives for the diversion of resources to other sectors as well as for distortions of resource use and income distribution within the agricul- tural sector. Table 8 summarizes the distribution of production credit among the major crops during 1975-79. About one-fifth of the value of all crop- specific production loans went to soybean producers, and 80 percent of such credit went for six crops: soybeans, wheat, rice, corn, coffee, and sugarcane. These six crops account for about 60 percent of the gross value of total crop production. Wheat and rice, in particular, have received a proportion of credit well in excess of their relative contributions to output. Striking on the other side, however, is that black beans and manioc, which together account for about 17 percent of the value of crop production, received only 4 percent of crop-specific production credit. The major export crops -- soybeans, coffee, sugarcane, cotton, and cocoa -- received credit roughly in line with their total share of output: 48 percent in both cases. 1/ Equivalent to approximately US$3-4,000 (see footnote 1, p. 23). 2/ The primary significance of this measure is to reduce the Bank of Brazil's share of rural credit and thus its direct monetary impact. Since only agricultural credits exceeding the 20 percent requirement are exempted from commercial banks' overall credit ceilings, the incremental 5 percent must be shifted from other sectors. 3/ A simple regression analysis is attempted by Denis Ribeiro (Credito Rural no Brasil: Avaliacao e Alternativas, Editoras Unidas, Sao Paulo, 1979), but the results are too aggregated to be very helpful. The mostly negative impacts of the credit subsidization on the financial system and the macro-economy are analyzed in IBRD Report No. 2790 (op. cit.). - 21 - Table 8: Distribution of Production Credits by Crop, 1975-1979 (Percent) Percent of Gross Value Crop 1975 1976 1977 1978 1979 of Crop Output b/ Wheat 13 13 11 11 10 3 Rice 18 16 16 13 14 8 Corn 11 11 8 9 10 10 Manioc 0 1 1 1 2 11 Black beans 1 2 3 3 3 6 Soybeans 18 20 20 20 21 17 Cocoa 1 1 1 2 1 4 Coffee 10 11 13 12 13 13 Sugarcane 11 10 9 9 7 9 Cotton 5 7 8 6 6 5 Other 10 9 11 14 13 14 Total a/ 100 100 100 100 100 100 a/ Excludes noncrop-specific credits. b/i 1977. Source: Appendix Tables 1.1 and 4.4. 46. To sorLie extent, these divergences can be explained by the, on average, smaller size and more remote locations (relative to credit infra- structure) of bean and manioc growers as compared to the grain and export crop producers. It also reflects the general impact on incentives to use modern inputs of other policies -- e.g., price controls, etc. -- and, hence, on the demand for credit. In addition, in determining the coefficient of credit eligibility (b in paragraph 38), there was a tendency to give less favorable treatment to the basic food crops. 1/ 1/ In order to qualify for more credit, consequently, farmers may also have systematically over-reported the area planted to such crops as wheat and soybeans and under-reported the area dedicated to beans and manioc, etc. It is notable that the data for 1976 show the areas financed for plantings of soybeans, wheat, coffee, and sugarcane exceeding the areas eventually harvested of those crops by margins ranging from 30 to 100 percent. Some of this discrepancy may be the result of land left unharvested because of crop failure or low prices, but some credit diversion, either to other crops or outside agriculture, is probably also indicated. -22- Table 9: Distribution of Crop Credit by Region, 1977:and 1979 (Percent) ----------------Type of Credit---------------- ----- Percent of Gross Region Production Investment Marketing Total Value of Crop Output 1977 1979 1977 1979 1977 1979 1977 1979 1977 North 1 3 3 5 1 1 2 3 1 Northeast 12 12 18 22 10 11 12 14 22 Southeast 33 30 34 26 35 41 34 32 32 (of which: Sao Paulo) (22) (20) (19) (17) (30) (35) (23) (23) South 44 45 36 34 50 41 44 42 38 Center-West 10 10 10 13 4 5 8 10 7 100 100 100 100 100 100 100 100 100 Source: Appendix Table 4.5(a). 47. The distribution of credit among crops is reflected also in the distribution among regions, as shown in Table 9, for 1977 and 1979. The major divergences between the shares of crop credit and the regional distribu- tion of output value are found in the Northeast and the South. The former, which accounted for some 22 percent of crop value in 1977, received only 12 percent of crop credits. At the same time, reflecting the heavy concentration of wheat and soybeans, the three states of the South received 44 percent of total crop credit, as compared to 38 percent of the value of crop production. 1/ Some shift in the direction of credit in favor of the North, Northeast and Center-West is evident between 1977 and 1979, reflecting in part the intensified effort being made through the advanced posts and the expanding rural develop- ment program. 48. The 1977 distributior. of crop credit per hectare of cropland (accord- ing to the 1975 census) was as follows (current cruzeiros): North 1,449 Northeast 1,392 Southeast 4,020 (Sao Paulo) (5,712) South 4,114 Center-West 2,338 Brazil 3,061 On average, farmers in the South and Southeast received three times as much credit per hectare as those of the Northeast. Credit use in Sao Paulo alone was four times as intensive as in the Northeast and twice the national average. 1/ When credits for livestock activities are added in (Appendix Table 4.5), the relative shares of the Southeast and Center-West are increased, while that of the South is reduced; the credit share of the Northeast, however, remains virtually unchanged. - 23 - 49. National data are not available to detail the distribution of credit by size of farm or the amount of wealth or income of the farmer. A rough idea may be given, however, by the size distribution of the individual loans in 1976: Size of loans a/ Percent of credit Percent of contracts Below 50 MS 11 72 50 - 500 MS 37 24 Above 500 MS 52 4 100 100 a/ Calculated in minimum salaries of 1976. One minimum salary was equivalent to about US$50. Loans of more than 500 minimum salaries (about US$25,000) accounted for around 4 percent of the number of contracts amounting to more than half of total agricultural credit. Loans of under 50 minimum salaries, on the other hand, accounted for more than 70 percent of contracts but totaled only 11 percent of credit flows. Loans in the largest category, moreover, had grown much more rapidly than either small or medium-sized loans. In 1969, the large loans represented only about 20 percent of total credit and 1 percent of loan contracts. 50. A recent survey carried out by the Bank of Brazil suggests that this trend has been reversed, at least as regards its own operations. According to this study, loans to "mini" and small producers accounted for 71 percent of contracts and 26 percent of credit volume in 1979, as compared to 39 percent and 14 percent, respectively, in 1977. (Through the first ten months of 1980, the shares of "mini" and small producers had risen to 80 percent of loan contracts and 30 percent the Bank of Brazil's rural credit.) 1/ 51. A study of credit use on a sample of 6,000 farms in Sao Paulo in 1977 is summarized in Table 10. Unsurprisingly, the proportion of farms using credit and the amounts of credit they used-were positively related to the size class of the farm. Although almost half of credit recipients were farmers of 30 ha or less, this group used only 17 percent of total credit. On the other hand, farmers with more than 200 ha received 10 percent of the loans amounting to 38 percent of total credit. 1/ Small and "mini" producers were defined as those with gross earnings of 400 MVR (maior valor de referencia -- higher reference values) or less. The value of an MVR in March 1981 ranged from about US$30 in the poorer states of the North and Northeast to about US$40 in the Southeast. - 24 - Table 10: Distribution of Credit by Farm Size, Sao Paulo, 1977 Farm Percent Percent Percent of Size Percent of Percent of Using of Credit Total Credit a/ (ha) Farms Farm Area Credit Users Used 3-5 7.4 0.3 12.2 2.8 0.8 5-10 14.0 1.2 23.9 10.5 2.3 10-20 21.0 3X4 27.9 18.4 6.3 20-30 14.3 4.0 35.4 16.0 7.4 30-50 14.5 6.4 35.7 16.2 10.9 50-100 13.1 10.4 37.6 15.5 18.9 100-200 7.7 12.0 42.4 10.2 15.4 200-300 2.9 8.0 41.4 3.8 9.0 300-500 2.3 9.8 40.8 3.0 9.9 500-1,000 1.6 12.5 44.3 2.3 9.8 1,000+ 1.2 32.0 38.5 1.3 9.3 Totals 100.0 100.0 31.8 100.0 100.0 a/ Average 1974-77 production and investment credit. Source: Instituto de Economia Agricola, Informacoes Economicas, Maio de 1979. 52. More surprising is the apparent fact that even in the most highly developed state of Sao Paulo, fewer than one-third of farms received credit from the formal system. The highest proportion of farms using credit in any size group was 44 percent. Secondly, although a smaller proportion of the smaller farmers took credit from the formal system, those that did, did so more intensively than the larger farmers. For example, credit-using farms of up to 50 ha accounted for only about 5 percent of agricultural area in the state but used 28 percent of the agricultural credit. Farmers in these strata who acquire credit from the formal system used, on average, roughly five times more credit per hectare than did comparable farmers having 200 or more ha. 1/ The smaller properties tended, it would seem, to be farmed more intensively. 53. To summarize the discussion thus far, credit to agriculture has been expanded rapidly over the past decade and offered at increasingly subsidized real interest rates. Little empirical evidence is available to substantiate the impact of these credit flows on output and investment. The primary beneficiaries in absolute terms, of its considerable grant element have been the larger grain and export crop farmers of the South and Southeast. Few of its benefits have reached the smaller producers of land-intensive food crops or farmers generally in the Northeast, although some shift in their favor is evident since 1979. 1/ Calculation assumes that average farm sizes of credit users and noncredit users in each size bracket are equal. - 25 - 54. The resource transfer being made to recipients of subsidized agricul- tural credit, partly as compensation for the net "tax" on agriculture imposed by other urban industry-oriented policies, is exacted from the rest of the economy in various forms: most importantly, in the reduction of fiscal resources available for other purposes, the general inflation to which the monetary expansion associated with the credit flows strongly contributes, and the increased interest charges levied on borrowers in the uncontrolled finan- cial markets. 1/ To the extent that the credits succeed in stimulating agricultural production, a part of the benefits flow back to the rest of the economy in the form of lower prices for farm output. 55. While empirical data are lacking, it cannot be assumed that the entire growth of credit has represented a net increase in the resources devoted to agricultural production. With rates of return on other financial assets, including government bonds, far higher than the cost of agricultural credit, the incentives to divert such credit -- or to borrow in substitution of one's own resources, which are, in turn, diverted -- have been enormous. It is possible that a part of the resources borrowed from the government, ostensibly for agriculture, has been loaned back to the government at substan- tially higher interest rates. Paradoxically, to the extent that subsidized credit stimulates farm output and lowers the marginal rate of return to agricultural investment, it increases the farmer's incentive to divert his own resources to other sectors. 2/ 56. The massive flow of subsidized credit to a minority of Brazilian farms may also have an important impact on the distribution of incomes within the agricultural sector. Where credit is used to improve productivity and lower production costs, and market forces pass some or all the gainis on'to the consumer in lower prices, the recipient of credit clearly benefits to the detriment of nonrecipients wilo suffer the same drop in price but without equal access to cost-reducing inputs and technology. The greater the price-inelas- ticity of demand for the product, the greater would be the fall in product price. 57. Important from an allocational point of view is the redistribution of resources among producers of different crops. If access to credit is unevenly distributed in this regard, or demand elasticities markedly different, recipients are enabled to bid inputs away from nonrecipients, thus changing the pattern of real resource use. The more price-elastic the demand for the product, the less will be the impact of expanded output on product price and, hence, the greater the incentive of the farmer to bid up the price of needed factor inputs. In general, export crops, wheat -- by virtue of the government purchasing monopoly -- and those commodities best protected by the minimum price program enjoy a higher demand elasticity and are thus most likely to bid up factor prices. 1/ See IBRD Report No. 2790, op. cit. All bank credits were subjected to interest rate ceilings beginning in September 1979. These ceilings were effectively removed in late 1980. 2/ For a theoretical discussion of this and other points introduced below, see: Gervasio Castro de Resende, "Credito subsidiado e formacao de capital na agricultura brasileira," paper delivered to 18th Brazilian Congress of Economics and Rural Sociology, July 1980. - 26 - 58. The factor price likely to respond most sensitively, because of its inelasLic supply, is land. Indeed, the availability of subsidized credit may push up the price of land regardless of the latter's utility as a productive input, because the ownership of land is in most cases necessary to qualify for credit in the first place. Thus, when credit is as highly subsidized as it is in Brazil, some proportion of the credit can be expected to be applied, either directly or through the release of the borrower's own financial resources, to the purchase of land simply to establish eligibility for still more subsidized credit and to benefit from the speculative land price increases thus generated. 59. Some indirect indication of this phenomenon can be found in the comparison of land prices and rents summarized in Table 11. Table 11: Indexes of Sales Prices and Rents for Crop Land in Brazil arnd Selected States, 1966-1979 a/ l1966 = 100) State Sales Prices Rents 1966 1973 1979 1966 1973 1979 Pernambuco 100 63 229 100 192 231 Minas Gerais 100 108 232 100 146 143 Sao Paulo 100 216 433 100 161 161 Parana 100 223 595 100 320 439 Rio Grande do Sul 100 187 377 100 266 268 Mato Crosso 100 279 635 100 152 177 BRAZIL 100 200 339 100 180 174 a! Deflated by FGV Index 2. Source: Appendix Tables 5.9 and 5.11. The rents paid by tenant farmers should, presumably, bear a reasonably close relationship to the actual productive value of the land. If the sales price of the land rises more rapidly than rents, it may indicate that nonproduction- related benefits associated with land ownership are growing more rapidly than income from productton. In Sao Paulo, for example, recorded real land values rose more than fourfold between 1966 and 1979, while real rental charges increased only 61 percent. Only in the northeastern state of Pernambuco did sales prices not rise more rapidly than rents over the entire period, although it conformed to the general pattern after 1973. Nationwide, the average real value of rents actually declined from 1973 to 1979, while land sales prices rose 70 percent. 1/ 1/ The sales price of the land also presumaably reflects the expected future income stream from production. Some or all of the rise in land values, therefore, could be attributable to optimistic expectations regarding farm product prices and rents. - 27 - 60. Subsidized credit has also influenced the use of other inputs, particularly fertilizers and machinery, as will be discussed below. Although no attempt is made here to quantify them, a selective credit system as complex, extensive and highly subsidized as the Brazilian necessarily involves very high administrative costs. Finally, the importance of subsidized credit to the success or failure of other agricultural policies should be noted. For example, the availability of storage credit at interest rates considerably below the present and expected rates of inflation provides farmers a strong incentive to withhold their product from the market, even when the market price is well above the minimum price. Also, the value that subsidized credit imparts to the ownership of land tends to undercut the effort to stimulate more productive land use via the taxation of idle land. Those examples will be discussed further in the relevant sections below. C. The Minimum Price Program 61. The Brazilian minimum price program was launched in 1943 with the creation of the Commission for Production Financing (CFP); the first minimum prices were set two years later to apply to the 1946 harvests of rice, black beans, corn, peanuts, soybeans, and sunflower seeds. 1/ The minimum price program has widened its coverage over time and now includes some 42 commodities. These range from farm products of national importance, such as black beans, rice, and corn, to localized items like carnauba wax and guarana. Sugar, coffee, wheat, and cocoa, which together account for about one-fourth of the value of total crop production, are outside the minimum price program and are administered separately by specialized agencies. 62. Minimum price guarantees are intended to reduce the uncertainties facing a farmer at the beginning of the planting season and thus induce a higher level of investment and production. 2/ Table 12 describes the year-to-year price variability at the producer level of the major crops during the decade 1967-76. The lowest variability relative to both the 10-year mean and the calculated trend line was experienced by the grains and export crops, with the notable exception of coffee. The greatest instability of price year to year was suffered by manioc, coffee, black beans, onions and potatoes, probably reflecting these products' low price-elasticity of demand. 1/ A brief history of the program may be found in: Tulio Arvelo Duran, "A politica de precos minimos no Brasil," in CFP, A Politica do Precos Minimos, Estudos Tecnicos 1949/1979, Brasilia, dezembro de 1978. 2/ It should be emphasized that minimum price guarantees as discussed here, are not intended as a mechanism for subsidizing the production of specific commodities or of transferring income to farmers. This point will be discussed further in Chapter V. - 28 - Table 12: Price Variability of Selected Crops, 1967-1976 a/ (Percent) Average Average Variation Variation Relative to Crop as % of Mean Trend Line Rice 23 21 Black beans 50 29 Cotton 33 17 Soybeans 23 18 Corn 21 11 Peanuts 25 16 Sugarcane 14 12 White potato 36 25 Onions 27 26 Manioc 64 42 Coffee 50 30 a/ Average real annual producer prices. Source: Fernando B. Homem de Melo, "Padroes de instabilidade entre culturas e agricultura brasileira," Pesquisas de Planejamento Economico, dezembro de 1979, p. 835. 63. The minimum price program and related crop storage facilities are also intended to smooth out the sharp fluctuations to which crop prices are subject over the course of the crop year. The executive agency for the pro- gram is the CFP, which was originally subordinate to the Ministry of Finance but later moved to the jurisdiction of the Ministry of Agriculture. The Bank of Brazil was, until recently, the exclusive financial agent of the CFP. Beginning in 1980, however, private commercial banks may also participate in the program's operations. Minimum prices are fixed annually by the National Monetary Council and announced prior to the beginning of the planting season. Adjustments may be made later in the season, but this has occurred very infrequently. Under the current system, the CFP determines each year a "basic cost of production (VBC)" for each of the covered crops and regions. The minimum price is then determined as the VBC adjusted for expected inflation, plus a profit margin, the latter reflecting government investment priorities. 64. Farmers and farm cooperatives have the option of selling their covered products to the market at the going price, selling to the CFP at the guaranteed minimum price, or borrowing from the CFP against the minimum price value of the stored crop for later sale to the market or to the government. 1/ Truckers and processors are also eligible to participate in the program on the condition that they have paid at least the minimum price for the crop to the farmer. 1/ In the past, the minimum price also determined the level of production credit for which a farmer was eligible. This direct linkage was formally broken in 1979. Now both the level of production credit and the minimum price are independent functions of the VBC (see para. 38). - 29 - 65. Operations under the sales option are referred to as the Federal Government Acquisitions Program (AGF), while the more heavily used storage credit option is known as the Federal Government Loan Program (EGF). There are two types of EGF loans, depending on whether the borrower retains a subsequent option to sell the crop to the government. In the first case, the farmer or other owner of the crop -- e.g., a cooperative or a processor -- is eligible for a loan equivalent to 100 percent of the minimum price for a variable period of time, usually four to six months depending on the crop. If market prices are above the minimum during the period of the loan, the borrower can sell the crop in the market and repay the loan plus interest and storage charges. If, alternatively, the market price remains below the minimum, the borrower cancels his obligation by "selling" the crop to the CFP at the minimum price. In this particular case, neither interest nor storage costs are paid. The grain is stored in government-approved warehouses, either publicly or privately owned. A variant of the EGF program is the rural promissory note which, when discounted, allows for credit in excess of the minimum price and requires that repayments be made during the loan period. The purpose of this latter scheme is to provide financing at a level closer to market values. Soybean growers and processors have apparently been among the major users of this facility. 66. The second type of EGF loan provides the borrower 80 percent of the minimum price. The commodity being financed is not classified and is stored by the farmer, who, at the end of the loan, must repay principal plus interest even if the market price is below the minimum. 67. A new program (pre-EGF) was started in 1978 to reach small farmers and eventually replace the "second type" of EGF loans. 1/ The pre-EGF provides "bridge" credits to small producers facing financial difficulties during the period required to classify the grain, deliver it to the cooperative or storage facility, and process the EGF loan. These steps could easily take a month or more and involve a series of intermediaries, and were believed to inhibit many small farmers' entry into the program. The pre-EGF program channels its resources to cooperatives or other small farmer associations, which can pre-finance their members on the promise of immediate delivery of the grain. Once the cooperative or association receives the grain', it is classified and deposited in an authorized warehouse. At this point the pre-EGF becomes a regular EGF, freeing resources for a new pre-EGF loan. More than 40% of pre-EGF funds thus far have gone to the Northeast, representing about 5% of that region's total EGF allocations. 68. The EGF program experienced a tremendous expansion in the 1970s, crop storage growing from 0.9 million MT in 1968-69 to 7.9 million MT in 1975-76, before declining to 5.8 million MT in 1977-78 and 6.8 million MT in 1978-79 (Appendix Table 4.11). In real value terms, the program expanded at a trend rate of 30 percent per year over the period (Table 13). The major 1/ The pre-EGF was actually initiated in the 1975/76 crop year for producers of jute. It was not until after 1977 that it was extended to other crops, including inter alia black beans, cotton, corn, sisal, garlic, rice and manioc flour. A companion program, "Bonus Colheita" (Harvest Bonus), was introduced for individual small farmers in 1980. 30 - Table 13: EGF Operations by Regions, 1968/69 - 1978/79, (Millions of 1965-67 cruzeiros) Crop Value of Operations Center-South % year Center-South North-Northeast Total of total 1968/69 106 28 134 79 1969/70 149 24 173 86 1970/71 170 16 186 91 1971/72 270 19 289 93 1972/73 205 33 238 86 1973/74 506 28 534 95 1974/75 1054 185 1239 85 1975/76 1170 146 1315 89 1976/77 1237 182 1419 87 1977/78 908 163 1071 85 1978/79 953 173 1126 85 Source:. Appendix Table 4.10. - 31 - growth occurred between 1972 and 1974, when the real value of EGF loans jumped more than fivefold. The bulk of EGF resources, averaging almost 90 percent, have gone to the three subregions of the Center-South. The North and Northeast, which together account for about 23 percent of the value of crop output, received only 10 percent of EGF resources over the past decade. 69. Most of the EGF program is concentrated in four products (Table 14). Among the major domestic foodstuffs, rice, and corn absorbed about 33 percent of EGF resources during the period, the share, particularly of rice, however, falling sharply after 1973/74. The two export-oriented crops in the program, soybeans and cotton, used 57 percent of total resources. Soybeans are the single most important component, taking more than one third of total real resources over the past decade and accounting for most of the growth. 70. The distribution of EGF funds between producers and cooperatives, on the one hand, and processors and distributors, on the other, fluctuates widely as a function of crop and regional distribution (Table 15). Over time, the nationwide average has been about half and half. Producers and coopera- tives use almost 70 percent of EGF credit in the Center-South, as opposed to less than 40 percent in the North-Northeast, where most of the credit goes to processors. On a product basis, 60 to 70 percent of rice and 80 to 90 percent of corn loans are channeled to producers and cooperatives, while only 15 to 25 percent of cotton loans are used by these two groups. 1/ 71. As in the ca8e of other rural credits, EGF interest rates have been heavily subsidized. In early 1981, the rate charged on ordinary EGF loans was raised from 29 percent to 45 percent for producers and cooperatives and to 50 percent for processors. At the same time, the rate charged on the dis-' counting of crop titles was raised from 33 to 73.8 percent. Finally, the eligibility for EGF credit was limited to 60 percent of the previous year's financing for processors of cotton and to 70 percent for processors of corn and soybeans. 72. Government crop acquisitions result either from direct application of the AGF program or from unpaid loans obtained under the EGF program. (No information was available on the relative importance of the two sources of government acquisitions.) In the five-year period 1974-1978, total real crop purchases under the AGF program (Tables 16 and 17) were equivalent to only 10 percent of the loans made via the EGF program. 2/ Even though AGF is less important at the aggregate level than EGF, it does have considerable weight for some regions and commodities. Between 1969 and 1976 the Northeast accounted for 40 percent of AGF purchases as compared to only 14 percent of EGF credits. For the South the corresponding figures were 14 and 15 percent, respectively. Almost 80 percent of AGF operations in the North-Northeast in recent years has gone to support the incomes of producers and marketers of sisal and carnauba wax (Appendix Table 4.12) and can be regarded largely as welfare 1/ See Appendix Tables 4.7a and 4.8a for details. 2/ The figure shown for 1978 excludes substantial corn imports channeled through the AGF program. - 32 - Table 14: Allocation of EGF Loans by Crop, 1968/69 - 1978/79 (Millions of 1965 - 67 Cruzeiros) Crop Cotton Rice Corn Soybeans Other Total Year Value % Value % Value % Value % Value % Value 1968/69 39 29 60 44 7 5 12 9 16 13 134 1969/70 34 19 80 46 20 12 20 12 19 11 173 1970/71 41 22 61 33 10 6 49 26 25 13 186 1971/72 75 26 92 32 19 7 82 28 21 7 289 1972/73 61 26 120 50 32 13 1 0 24 11 238 1973/74 121 23 107 20 82 15 186 35 38 7 534 1974/75 230 19 192 15 96 8 550 44 171 14 1239 1975/76 128 10 366 28 157 12 534 41 130 9 1315 1976/77 338 24 245 17 148 10 596 42 92 6 1419 1977/78 341 32 149 14 50 5 407 38 124 12 1071 1978/79 384 34 140 12 84 7 374 33 144 13 1126 Source: Appendix Table 4.10. Table 15:Distribution of EGF Loans by Types of Beneficiary, 1968/69 - 1979 (Percent) Crop Center - South North - Northeast T 0 T A L Year Producers and Producers and Producers and Processors Cooperatives Processors Cooperatives Processors Cooperatives 1968/69 54 46 9 91 45 55 1969/70 67 33 17 83 59 41 1970/71 52 48 21 89 50 50 1971/72 53 47 15 85 51 49 1972/73 56 44 9 91 50 50 w 1973/74 52 48 13 87 50 50 1974/75 67 33 34 66 62 38 1975/76 68 32 36 64 65 35 1977 64 36 37 63 61 39 1978 48 52 34 66 46 54 1979 50- 50 27 73 46 54 Source: Appendix Tables 4.8a and 4.9a. - 34 - Table 16: AGF Operations by Regions, 1973/74 - 1977/78 (Millions of 1965-67 Cruzeiros) Crop Value of Operations Center-South Year Center-South North-Northeast Total % of Total 1973/74 76 2 78 97 1974/75 26 121 147 18 1975/76 198 90 289 69 1976/77 225 34 259 87 a! 1977/78 35 31 66 53 Totals 561 278 839 67 a/ Does not include AGF purchases of imported corn. Source: Appendix Table 4.13. - 35 - Table 17:Distribution of AGF Purchases by Crop, 1973/74 - 1977/78 (Millions of 1965-67 Cruzeiros) Crop Cotton Rice Corn Sisal Other Total Year Value 1973/74 56 1 20 - 1 78 1974/75 4 1 13 109 20 147 1975/76 - 160 40 66 23 289 1976/77 2 105 127 / 4 21 259 1977/78 9 19 3 5 30 66 Totals 71 286 203 184 95 839 Percent- 1973/74 72 1 26 - 1 100 1974/75 3 0 9 74 14 100 1975/76 - 56 14 23 7 100 1976/77 1 41 49a/ 2 7 100 1977/78 14 29 4 7 46 100 Totals 8 34 24 22 12 100 a/ Does not include purchases of imported corn charged to the AGF account. Source: Appendix Table 4.13. - 36 - transfers. As in the case of EGF, producers of two principal staples, black beans and manioc, have derived relatively little benefit from the program. Practically none of the resources has gone to producers of these commodities in the North and Northeast, despite their importance in regional output. 73. Finally, a Special Purchase Program (POVOC) was introduced during the 1979/80 crop year to supplement the marketing services available in the recently settled frmoltier areas. In addition to the minimum price guarantee, POVOC als.o provides drying, grading, storage and bagging services, subsidized shipping', and simplified procedures for more rapid disbursement of funds to the farmer. Indirectly, the entry of CFP into these activities is expected to bWlnefit producers by putting competitive pressure on the private marketing services. The principal beneficiaries of the program in 1980 were rice |,)roducers in the frontier areas of Mato Grosso, Goias, Para, and Rondonia (slae Appendix Table 4.15). 74. As in, the case of agricultural credit, little is known empirically about the effects of the minimum price program. During much of its history, lack of adequate storage capacity and late announcement of the minimum price severely reduced the program's usefulness. Large variations in the real minimum price from one year to the next, reflecting changing economic priorities of the government, also probably inhibited commitments to a new crop or technology. A recent econometric study of the relationship between minimum prices and farmer supply decisions in the cases of rice, corn and soybeans in the Center-South for the period 1968-76 found no statistically significant relationship between the minimum prices announced for those crops and farmer decisions in that crop year. 1/ 75. Minimum prices were increased rapidly during the 1967/68-1973/74 period (Table 18), a time of rapid general economic growth and falling inflation rates preceding the first round of massive oil price hikes. This was also a time of rapidly increasing farmgate prices for most food crops, as shown previously in Table 3. During the rest of the 1970s, however, minimum prices were allowed to decline in real terms in the face of an accel- eratirng general inflation. Concern for the potential monetary impact of an aggres-ive minimum price program, exacerbated by the existing linkage between the minimum price and the disbursement of production credit (para 38), was probably an inhibiting factor during this period. Reflecting the increased priority being given to agricultural production, and to basic food crops in particular, minimum prices were again raised significantly in real terms for the 1980/81 crop year. Especially large increases were indicated for black beans, corn, and manioc. 1/ Tulio Duran, op. cit. A major weakness of this analysis is the use (for lack of data) of area harvested rather than area planted as the proxy for the farmers' supply decision. Area harvested is logically more related to the market price (or minimum price, if higher) at harvest time. The analysis also took as its independent variable the real value of the minimum price in the following year, implicitly assuming that the farmer correctly f6resees future inflation. (This was believed preferable to an alternate assumption of perfect money illusion.) An earlier study of rice, corn, and black beans derived similar results but showed a positive relationship in the case of peanuts. See: Gordon W. Smith, "0 programa de precos minimos para productos agricolas basicos," in CFP, op. cit. - 37 - Table 18: Average Annual Rates of Real Increase of Minimum Prices During Harvest Months, Selected Crops, 1967/68-1980f81_aJ (Percent) Crop 1967/68-1973/74 1973/74-1979/80 1979/80-1980/81 Cotton, unginned 8.4 (.86) -4.2 (-.70) 6.4h/ Rice 5.0 (.90) -2.9 (-.65) 1.7k/ Manioc flour 18.2 (.92) 12.1 (.77)c/ 11.0j'/ Corn 8.4 (.91) -6.3 (-.98) 15.6b! Soybeans 8.2 (.93) -5.2 (-.68) -5.3b/ Peanuts 8.1 (.95) -3.8 (-.84) -16.1 Black beans 7.9 (.87) -0.2 (-.06) 39.2 a/ Deflated by General Price Index (FGV #2); Correlation coefficients are given in parentheses. b/ Deflated by March 1980-March 1981 inflation rate. (Other deflations compare inflation rates between annual harvest periods specific to each crop.) c/ 1973/74-1978/79. d/ Manioc, unmilled. - 38 - 76. A preliminary notion of the extent to which the program has been effective in setting a useful floor to farmers' price expectations can be inferred from a comparison over time of the minimum prices set and the subse- quent course of market prices. If the guarantee price is chronically well below the relevant market price, the program's influence on resource allocation decisions is likely to be small. 1/ Table 19 shows the relationship since 1970 between the minimum prices and the average farmgate prices at harvest time of five major crops constituting more than half the value of total crop production and 90 percent of the value of crops covered by the minimum price program. It will be noted that in virtually all cases the minimum price was set signifi- cantly below the eventual market price. By far the largest discrepancy and greatest variability has occurred in the case of manioc, whose market price to the farmer at harvest averaged almost three times the minimum price. It is not surprising, therefore, that manioc producers have participated marginally in the program, storing less than one percent of their annual crop. It will also be recalled that manioc, of the major crops, suffers the greatest year- to-year price variability (para 62). 77. More surprising is the extensive use of EGF credit by soybean producers, who have consistently stored about one-third of their crop under the program in recent years despite substantially higher market prices (Table 20). This has probably been the result of their previously noted use of the rural promissory note (para 65), which has made available significantly larger amounts of subsidized -redit. In the case of black beans, the market price at harvest time has averaged 33 percent above the minimum price with a variability in the relationship second only to manioc. 2/ Even when the market price has fallen below the minimum price, however, as occurred in 1974/75 and again in 1977/78, only a small proportion of the crop received EGF support, suggesting the relatively more difficult access of bean farmers to the program. The low degree to which corn producers have taken advantage of the program, despite comparatively favorable and stable price ratios, must also reflect difficulties of access, probably as a result of the wide dis- persion of corn growers and limited storage facilities. 78. Given the wide spreads that have typically existed between the minimum price and the market-determined producer price at harvest time, the question arises why farmers or processors would choose to make use of the EGF facilities. 3/ The answer is apparently the expectation that market prices will rise faster than the interest charged on the storage credit. 1/ Were a farmer's sales truly guaranteed at the minimum price, the farmgate price would never fall below the minimum price. Imperfect access to the program and limited storage capacity, however, make this result possible. 2/ This variability in both cases is reflective primarily of the greater volatility of the market price, given their low demand elasticities. General conclusions regarding black beans are weakened, by the hetero- geneity of the product. 3/ The price differential easily explains, of course, the low level of use of the AGF program. Table 19: Ratio of Average Producer Price at Harvest Time to Minimum Price, Selected Crops, 1967/68-1978/79 Ct,a! b/ C/ d/ b/ df Crop Year otton- Rice- Manioc Flour- Cor- Soybeans- Black Beans- 1967/68 1.16 1.47 4.07 1.04 1.58 0.82 1968/69 1.20 1.14 2.69 0.98 1.43 0.96 1969/70 1.13 1.03 1.98 0.95 1.34 2.07 1970/71 1.38 1.13 3.71 1.06 1.33 1.03 1971/72 1.20 1.27 2.83 1.18 1.26 1.04 1972/73 1.37 0.93 1.58 1.07 2.26 1.26 1973/74 1.34 1.22 1.50 1.01 1.42 1.96 1974/75 0.97 1.39 2.38 1.02 1.18 0.96 1975/76 1.60 1.16 4.95 0.97 1.16 1.52 1976/77 1.27 0.93 2.33 0.89 2.22 2.08 1977/78 1.20 1.14 1.69 1.31 1.84 0.89 1978/79 1.20 1.27 n.a. 1.27 1.94 1.08 Mean 1.25 1.17 2.70 1.06 1.58 1.31 Standard deviation .15 .16 1.06 .12 37 .46 Variability - % 12.0 13.7 39.3 11.3 23.4 35.1 a/ Type 5 unginned cotton, Sao Paulo b/ Rio Grande do Sul c/ Minas Gerais d/ Parana Source: Appendix tables 3.1.a and 3.2.a. - 40 - Table 20: Proportion of Crop Stored Under Minimum Price Program, Selected Crops, 1968/69-1978/79 (Percent) Crop Year Cotton Rice Corn Soybeans Black Beans 1968/69 2.9 7.5 1.1 11.4 0.2 1969/70 3.0 7.8 2.5 13.5 0.3 1970/71 2.7 6.7 1.3 20.0 1.0 1971'/72 8.3 2.0 19.7 1.2 1972/73 3.4 9.9 2.9 0.1 0.2 1973/74 6.8 9.3 4.7 19.0 1.3 1974/74 21.0 10.9 5.4 33.3 3.4 1975/76 15.1 20.5 9.3 32.1 0.5 1976/77 21,6 15.5 8.3 33.2 2.1 1977/78 26.5 12.1 4.2 33.8 7.4 1978/79 34,4 12.7 7.2 33.2 6.5 Source: Appendix tables 1.7a and 4.11. - 41 - The rapid growth of EGF credit use and related crop storage in recent years appears more related to the growing divergence of the nominal interest rates charged and the accelerating inflation than to improvements in the minimum price per se. It is the availability of credit at negative real interest rates that has induced farmers to withhold crops from the market at harvest time. 1/ The expectation of future price increases combined with the avail- ability of subsidized credit induces, in effect, a leftward shift of the supply curve, which in turn contributes to the fulfillment of the expectation. The end-result may indeed be greater price fluctuations than might otherwise have occurred. 2/ 79. In summary, storage credit under the minimum price program (EGF) has, like other farm credit programs, grown extremely rapidly, as have the interest rate subsidies associated with it. It has indeed been the availabil- ity of subsidized credit rather than the minimum price, per se, which accounts for whatever price stabilization and production incentive benefits the program may have provided. Despite the widening of product coverage over time and efforts to improve small farmer access, the program's benefits are highly copcentrated by both crop and region in much the same way as agricultural credit generally. The minimum price program cannot by itself overcome the long-standing intercrop and interregional differences in infrastructure, technology, education, other institutional supports, etc., which help to explain inequalities of access to the program. On the contrary, however, quite apart from what might have been the intentions of the policymakers, the program has tended in the past to reinforce these disparities. 80. If it is the Government's objective to influence producer expectations, and hence the flow of investment resources via the minimum price program, the minimum price itself, rather than the credit subsidies currently associated with it, should be made the effective policy variable. The new system of determining minimum prices in accordance with the VBC and the current effort of CFP to build a realistic inflation factor into its price recommendations are positive steps in this direction. Given the difficulty in the present macroeconomic context for either the farmer or the policymaker to predict prices confidently even six months into the future, however, it is recommended that the minimum price, currently fixed in nominal terms, be indexed to provide a more secure price floor upon which to base planting decisions. 3/ This could serve to compensate for the withdrawal of credit subsidies. 1/ The withholding of supply, of course, pushes up the price in the market and redounds also to the benefit of the producers of that proportion of the crop which is sold immediately. 2/ This appears to be the case particularly for coffee. Though outside the formal minimum price program, coffee growers have long had access to a special line of heavily subsidized credit for on-farm storage which facilitates speculation on frost-induced price movements. The large fluctuations in on-farm storage, incidentally, may lead to an exaggeration of reported production fluctuations. 3/ A system of indexing has been announced for the 1981/82 crop year. - 42 - D.' Wheat Subsidy Policy 81. Introduction. Wheat represents a very special situation in Brazilian policy. Productivity is low and highly variable, especially in the extreme south (Rio Grande do Sul), where until recently most of the wheat has been produced. The crop is not ideally suited to ecological conditions in Brazil, and the technology of production, especially the combating of pests and diseases, is very demanding. Consequently, significant producer subsidies have been required in times of low world wheat prices. On the positive side, wheat is an off-season (winter) crop in Brazil and conflicts little with the labor, land, machinery and other input needs of the main in-season crop, soybeans. Soybean-wheat double-cropping provides the pattern of year-round production in most wheat areas. 82. Wheat policy derives from several national goals including self- sufficiency in wheat supply, the control of inflation, and lowering food costs to the urban population. These are not mtutually exclusive goals; a su'bstantial consumer subsidy on wheat consumption in recent years has led to significantly increased demand, which, combined with several years of poor harvests, has resulted in expanded wheat imports. Thus, in spite of increased acreage planted to wheat, imports still provide more than one-half of consump- tion needs. 83. Wheat policy is fairly easy to implement and control, since the government serves as the only buyer for both domestic production and imported wheat. An above-market price has typically been paid to the domestic farmer, the government then selling below cost to the millers. Finally, the govern- ment also determines the price for wheat products at the retail level, thus fixing also the margin earned by the millers. The calculation of the subsidy and its distribution among producers and consumers depends on the selection of the "free market" price used as a base of reference. The estimates provided in this report are determined on the basis of the CIF cost of imported wheat. That is, the producer subsidy is the amount by which the producer price exceeds import price; the consumer subsidy is that amount by which the import price of wheat exceeds the price paid by mill operators. 84. Production. Wheat has long been produced in Brazil. Rio Grande do Sul, the southernmast state in Brazil, has traditionally been the major wheat- producing area and as late as 1968 accounted for 93 percent of national production. Since 1973, however, wheat production has expanded rapidly in the state of Parana and, to a lesser extent, in Sao Paulo and Mato Grosso. Currently, Rio Grande do Sul and Parana each supply about 45 percent of domestic wheat production. 85. A record 2.9 million metric torLs was harvested in 1979, a fivefold increase over production in 1965. Annual production fluctuates widely, however, because of great variations in weather during the growth and harvest seasons and the high incidence of pest and disease problems. Year-to-year average yield fluctuations of 50 percent for the entire country are not uncommon, and many individual farmers and regions periodically incur even greater variations (Table 21). - 43 - Table 21: What - Area, Production.and Average Yields .,l9k6 7-19 79 Area Harvested Production Average Yield Year (1,000 ha ) (1,000 t) (kg/hectare) 1967 831 629 757 1968 970 856 883 1969 1,407 1,374 976 1970 1,895 1,844 973 1971 2,269 2,011 886 1972 2,320 684 424 1973 1,839 2,031 1,104 1974 2,471 2,858 1,156 1975 2,932 1,788 610 1976 3,540 3,216 908 1977 3,153 2,066 655 1978 2,811 2,691 957 1979 3,831 2,927 764 Source: Appendix Tables 1t5a and 1.7a. 86. As noted, wheat is produced almost exclusively as an off-season crop on soybean land, soybeans being produced in the summer and wheat in the winter. The chronologies of the two crops do not fit perfectly, however, and soybean production is reduced about 15 percent, on average, because of the delay in spring planting while awaiting the wheat harvest. In the northern part of Parana, Sao Paulo and Mato Grosso, the overlap period is in the fall, the soybean harvest delaying wheat planting. Because of the periodic losses in wheat production and the penalty to soybean yield when double-cropped with wheat, a great annual variation in area planted to wvheat occurs, as individual farmers adjust their plantings to changing conditions. In recent years soybean plantings have increased more rapidly than wheat, as some farmers have opted to plant soybeans alone and not accept the risk of potential failure of a wheat crop. 87. The machinery, labor and some chemical inputs applied to wheat are complementary with soybean production, and there appears to be little negative impact on other commodities or factor use as a result of the stimu- lation given to wheat production. The few alternatives to wheat in the off- season include pasture, oats, flax and rapeseed. Pasture requires an asso- ciated livestock enterprise and is not a viable alternative for all soy producers. Oats and flax have limited markets. Rapeseed is a new crop being tested at the experimental station; if viable, it would have a market similar to soybeans with possible application as a substitute for diesel oil. 88. There are few constraints to increasing further the area planted to wheat. The Brazilian Agricultural Research Enterprise (EMBRAPA) estimates that up to 11 million hectares of land are favorably adapted to wheat produc- tion, compared to the estimated 3.9 million hectares planted to wheat in 1979. Nevertheless, wheat is one of the most technologically demanding crops produced in Brazil, and high risk is associated with its production. Researchers at the Passo Fundo National Wheat Research Station have developed a rotation system that promises higher wheat and soybean yields but requires one or more additional crops. They are suggesting that wheat be planted on the same land only every three years, with an alternative winter crop, such as rapeseed or flax, during the intervening two years. Experimental results suggest that wheat yields could eventually be more stable and average as much as two times present yields under such a system. Soybean yields would also be greater, since the yield reductions from seasonal overlap would be eliminated in two of the three years. The problems of implementing the new system rest in finding or developing markets and appropriate production technology for the alternate winter crop and in modifying incentive policies to encourage the new rotation. 89. Wheat consumption and imports. A major obstacle to self-sufficiency in wheat production is the greater use of wheat products stimulated by consumer subsidies. Thus, although domestic production of wheat has increased five- fold since 1965, consumption has grown by a factor of 2.4 over the same time period (Table 22). Per capita consumption, whicb was reasonably stable at just over 30 kg per person during the 1960s, increased more than 5 percent per annum over the past decade and now exceeds 50 kg per person. As a conse- quence, imports still supplied an average 60 percent of domestic consumption during the second half of the 1970s. - 45 - Table 22 Wheat Consumption and Imports, 1967-1979 Consumption Imports as % of Year Total Imported Domestic Total Cftsump (000 MT) 1967 2655 2433 222 91 1968 2866 2417 449 84 1969 2908 2286 622 78 1970 3034 1937 1097 64 1971 3208 1527 1681 48 1972 3375 2000 1375 59 1973 3797 3011 786 79 1974 4116 2165 1951 53 1975 4437 2300 2137 52 1976 5064 3183 1881 63 1977 5600 2864 2736 51 1978 5850 4200 1650 72 19791/ 6010 3780 2230 63 1/ Estimated. Source: SUNTAB. - 46 - 90. Consumption levels vary widely by region (Appendix Tau-e 6.1). The highly urbanized and developed states of Sao Paulo and Rio de Janeiro, along with the principal wheat producing state of Rio Grande do Sul, enjoy per capita consumption levels half again as large as the national average. Yet even these states experienced rapid increases in per capita wheat consumption during the 1970s. 91. Wheat policies. As seen earlier, wheat has been a primary benefi- ciary of the rapid growth of subsidized credit. The principal vehicle by which the government seeks to affect wheat specifically, however, is the setting of prices. As the sole purchaser of both imported and domestically produced wheat, the government is the only supplier of wheat to the processing mills and also controls the retail price. 92. Since wheat costs make up a significant portion of the cost-of- living index (13 percent on food costs and 5.5 percent of general living costs), the pricing of wheat and wheat products is both a sensitive policy issue and seen as a policy tool itself for fighting inflation. Ceilings on consumer prices are also intended to assure the accessibility of wheat products to the low-income population. Thus, although the cost of domestic and imported wheat increased significantly in recent years, nominal wheat prices to the mills were allowed to change little. At the same time guaranteed producer prices have been used to stimulate domestic production as part of a general policy of self-sufficiency first initiated in 1963 and reaffirmed after international wheat prices increased in the mid-1970s. 93. A comparison of the local costs of imported and domestic wheat and the price of wheat to the mills provides an indication of the degree to which policy tools have been used to affect production and consumption (Appendix Table 6.2). The price paid in real terms to the domestic wheat farmer declined steadily from 1967 to 1974, was raised significantly in 1975, and, albeit with considerable variation, has remained at higher levels since. This trend coincided with a generally low level of international wheat prices until 1972 and a somewhat higher and more variable price level since. Prior to 1972, when world prices were low, a substantial producer price subsidy was used to stimulate domestic production. In 1973 and 1974 domestic producer prices actually fell below international prices (which had risen dramatically following the Russian wheat purchases); in 1975 domestic producer prices were raised to approximately international levels and have remained roughly at international levels since. Thus, in most years since 1972 there has been little producer price subsidy. 94. Prices paid the governnent by the mills are a good proxy for determining the consumer subsidy, since the mills are then allowed a fixed processing charge. This price series shows a steady decline in real terms and two distinct phases. Until 1972 the cost of wheat to the mills was roughly equivalent to the combined (average) cost of imported and domestic wheat. Thus, in this time period the consumer was, in large part, paying the producer subsidy. When international prices increased in 1972, however, the government was reluctant to pass the inflationary impact of these price increases along to the consumer. Consequently, while higher international prices removed the need for a producer subsidy, consumer welfare and the - 47 - dampening of inflation became the dominant objectives of wheat policy. By late 1973 it had evolved into a consumer subsidy much greater than any historic producer subsidy. As seen above, this large consumer subsidy has sti,nulated consumption to the point where the drive toward wheat self-sufficiency has been stalled and actually reversed in recent years. 95. Given the low productivity of wheat cultivation in Brazil, the high annual production risk, and the relatively modest producer subsidy (based on costs of imported wheat), farmers do not appear to be receiving a very large surplus over average production costs. An attempt has been made in Table 23 to quantify the value of producer and consumer subsidies for the years 1968-1979. Over this period, consumers received about 90 percent of the subsidy. The total subsidy program increased steadily after 1972, reaching the equivalent in 1979 of almost US$1 billion. In the years prior to 1972, the volume of subsidy to producers was greater than that given to consumers. However, while the level of producer subsidy did not change greatly during the 1970s (though domestic production increased substantially), the consumer subsidy increased dramatically. 96. The distortion of the cost of wheat and wheat products to consumers in tutn affects competitive product demand. Low wheat prices resulted in per capita growth in wheat consumption of 55 percent during the 1970s, including some diversion to livestock feed. Consequently, traditional food (and feed) sources, such as corn and manioc, became more expensive flour sources than wheat. Manioc and corn are traditionally small-farmer crops. Thus, to the extent that substitution by wheat has led to reduced demand and lower prices for these crops, small-farmer incomes have been adversely affected by the consumer subsidy. I/ 97. Per capita consumption data for these products over the period 1967-78 show a slight increase in corn consumption, while rice remained relatively stable, and the per capita consumption of black beans declined (Table 24). Data are not available for manioc consumption trends, but it is widely believed that the greatest substitution may have, in fact, occurred with that crop. E. Other Price and Supply Interventions 98. In addition to minimum prices and the wheat program, the Brazilian government operates a large and continually shifting network of price controls at the producer, wholesale, processing, and retail levels. It also regulates commodity supplies through the maintenance of stockpiles, export and import controls, and via its own network of wholesale and retail outlets. The purpose of these interventions has been primarily to dampen inflationary pressures and assure, at least in the short run, a low-cost supply of food- stuffs and industrial raw materials to the urban market. Such controls have also sometimes been justified as required in the face of a high concen- tration of private market power in the distribution and marketing sectors. 1/ The resultant losses of corn and rice production are estimated in the Annex to this report. - 48 - Table i3': Wheat Subsidies Received by Wheat Producers and Consumers, 1968-79 (Millions of 1977 Cruzeiros) Consumer Subsidy Total Producer National Consumer Total Year Subsidy Production Imports Subsidy Subsidy (million (3) (2)(4)=(2)+(3) (5)=(l)+(4) _1977 US$) 1968 322 41 222 263 585 36.6 1969 501 99 363 462 963 60.1 1970 1,025 - 178 - 314 - 492 533 33.3 1971 1,476 - 504 - 458 - 962 514 32.1 1972 72 707 1,028 1,735 1,807 113.0 1973 - 415 824 3,156 3,980 3,565 222.8 1974 -1,473 2,967 3,293 6,260 4,787 299.2 1975 344 3,821 4,112 7,933 8,277 517.3 1976 758 2,242 3,794 6,036 6,794 424.6 1977 2,145 1,242 1,300 2,542 4f6P, 292.9 1978 25 3,184 8,106 11,290 11,315 707.1 1979 1,084 4,516 7,654 12,170 13,254 828.4 Sources: Adapted from Renato Zandonadi, Observacoes Sobre o Subsidio do Trigo Consumido no Brasil, CFP, Bras!lia, 1979; Mission estimate. - 49 - Table 24: Per Capita Consumption of Wheat, Cr.Rice and Black Beans. 1'967-197 (Kg per year) Black Year Wheat Corn Rice Beans 1967 30.96 127.70 53.42 1968 32.71 130.17 49.47 26.84 1969 32.04 153.42 47.13 23.66 1970 32.48 136.00 39.47 23.21 1971 33.42 137.92 47.35 28.02 1972 34.19 136.33 38.11 27.07 1973 37.43 135.75 46.24 22.11 1974 39.46 146.40 42.86 21.47 1975 41.41 144.72 41.58 20.82 1976 45.98 146.87 45.16 17.19 1977 49.47 150.17 46.62 21.25 1978 50.27 153.81 47.04 21.06 Source: Ministry of Agriculture; Bank of Brazil; FIBC-E. - 50 - 99. Price controls. The Federal Commission for Supply and Prices (COFAP) was established in 1951 with wide discretionary powers to fix prices of food and raw materials and to prevent "excess profits." This commission was succeeded in 1962 by the National Superintendency of Supply (SUNAB) with still greater authority including, in addition to price setting at the whole- sale and retail levels, the establishment of import and export quotas on agricultural products, the promotion of investments in storage capacity and the maintenance of commodity stockpiles, and the direct intervention of private firms in the transport and commercial sectors. The price control mechanisms used by SUNAB,' varying over time and by product, have included specific price determination and the setting of ceilings on prices, retail mark-ups, and/or profit rates. During the mid-1960s, SUNAB instituted a number of programs, which, through the offer of various tax and credit incentives, liberation from direct price controls, and special discounts on food products wholesaled by public sector agencies, sought to induce voluntary adherence to its price guidelines. 100. Since its inception, SUNAB has undergone repeated restructurings and redefinitions of its role and authority. Originally attached to the Presidency of the Republic, it currently falls under the jurisdiction of the Ministry of Agriculture. Since late 1979, however, all price determination authority has been centralized in the Special Secretariat for Supply and Price (SEAP) of the Ministry of Planning, and SUNAB's role has diminished to one of inspection, supervision, and technical studies. Similarly, several other agencies concerned with the supply of agricultural products were initially created as administratively subordinate to SUNAB but currently function as independent agencies. Among these are the Brazilian Food Company (COBAL), the Brazilian Storage Company (CIBRAZEM), and the Commission for the Financing of Production (CFP). The latter's role in administering the minimum price program has been described above; the other two agencies are mentioned below. 101. Marketing. COBAL was established in 1962 to enter directly into the retail marketing of agricultural commodities in competition with the private sector. Over time it has shifted its emphasis from direct participation to one of support to small, private operators. During the fiscal year July 1978-June 1979, COBAL operated 176 fixed and 43 mobile retail outlets with sales totaling Cr$ 3.5 billion (about US$163 million). 102. In 1972 COBAL was made the executive agency for the establishment and coordination of a National System of Supply Centers (SINAC). This network currently consists of 20 state-level Supply Centers (CEASAs), nonprofit corporations jointly owned by COBAL and parallel agencies of the state and municipal governments. As of June 1979 the CEASAs were operating 31 fruit and vegetable marketing centers, which provided stalls, weighing and grading services, packing materials, and price information from other markets. The CEASA does not enter into the sales transactions directly. The private wholesalers and retailers pay a fee which covers most of the current costs of the services provided; the overhead, however, is financed by government transfers. - 51 - 103. The large wholesale and retail marketing centers are linked to 20 rural producer markets located in horticultural areas where marketing infrastructure has been a key bottleneck impeding both quality and quantity of production. Technical assistance is provided to the farmer regarding the grading and packaging of his product, and price information is transmitted from nearby towns and cities. 1/ Thus, the supply centers and producer markets have helped to improve marketing standards and information and increase competition among intermediaries and merchants to the benefit of both farmers and consumers in the vicinity. They are still few in number, however, and access is limited in many parts of the country by distance and poor roads. 104. Finally, many of the CEASAs assist retailers in poor urban neighbor- hoods by providing small community markets and low-cost foodstuffs purchased below cost from the CFP. Some of these are marketed under COBAL's own brand name, SOMAR. The cost of the subsidy is divided between the federal and state governments. 105. The milk subsidy. Fluid milk prices are fixed at the retail level, and milk distributors are paid a subsidy by the government equivalent to about 10 percent of the retail price. If all fluid milk had benefitted from this program, the total subsidy paid would have averaged about US$70 million per year between 1976 and 1979. One consequence of this policy seems to have been the diversion of milk away from the fluid milk market and toward the processing of powdered milk, cheese, butter, and yoghurt, whose prices were not con- trolled. While 50 percent of total milk output was marketed as fluid milk in 1975, this proportion had fallen to 33 percent by 1978. 106. Subsidized credit is also provided for the seasonal stockpiling of powdered milk to stabilize prices over the course of the year. Some US$110 million of credit was directed to this purpose in 1979 at a monthly interest rate of 1.9 percent. Assuming an average loan of four months maturity, the subsidy element was on the order of US$16 million. 107. The beef program. Maximum prices are set on beef at the retail level. In addition, in order to avoid seasonal variations in beef prices, a program to store frozen beef for off-season release was inaugurated in 1975 under the direction of COBAL. 2/ The meat-packing plants sell half-carcasses to COBAL, which freezes and stores them for later resale, usually back to the original processors. Frozen beef is used to supply Rio de Janeiro, Sao Paulo and Brasilia; no fresh meat is permitted to be sold off-season in the three cities. Up to 1979 COBAL sold the meat at the same nominal price at which it had earlier bought. A simple calculation of the financial loss caused by 1/ The services provided in the producer markets substitute to some extent for the typical functions of a marketing cooperative. These are still relatively few and poorly organized in Brazil. 2/ Because of the uneven distribution of rainfall and hence the availability of natural grasses, most cattle slaughter takes place during the first semester of the year. - 52 - inflation between 1975 and 1978, when some 180,000 MT carcass weight were bought by COBAL, indicates that the cost of the program was equivalent to about US$25 million per year (Table 25). Adding operating costs of storing, freezing and defreezing of about US$115/MT, the program cost an average of some US$40 million per year, without taking into consideration capital charges on the freezing plants. 108. It is difficult to assess the benefits of the beef storage program. It has unquestionably helped the meat-packing plants by indirectly furnishing operating capital during the slaughter season. It has also defended cattle growers against falling prices in the same period. On the other hand, by ensuring a protected market during the "harvest" months, the program may have discouraged the search for more efficient counter-seasonal techniques of beef cattle production, e.g., more use of hay and silages. In the long run, beef prices at the consumer level increased despite controls, as supply failed to keep up with a growing demand. 109. Storage capacity. Brazil's storage capacity in 1979 was given as 50.3 million metric tons, with an additional 650,000 MT of cold storage for meats and fish. Capacity had increased some 30 percent since 1975, more than a third of the increment accounted for by the activities of CIBRAZEM. Public sector facilities now account for slightly more than half of total capacity. Approximately 60 percent of static capacity provides for conventional sack- type storage in warehouses (Appendix Table 5.4); this capacity is used inter- changeably for agricultural and nonagricultural products, is highly inefficient and leads to substantial product losses. Almost 60 percent of capacity is located in the South with an additional 28 percent in the states of the Southeast (Appendix Table 5.5). 110. CIBRAZEM was established in 1963. It originally played only a coordinating role for a number of unrelated state commissions and agencies with activities in the area of storage construction. Under guidelines estab- lished in 1974 under the National Storage Program (PRONAZEM), CIBRAZEM is now responsible for planning and financing all but a fraction of public investment in new storage capacity. It also owns a network of units which are rented to agricultural producers. In addition to rents, the company receives funding from the Central Bank and from the state and federal governments. (The Central Bank also makes subsidized credit available to the private sector for the construction of storage facilities open to the public.) 111. In addition to relieving storage deficits in the poorer regions and frontier areas, CIBRAZEM's program calls for the expansion of capacity along the "export corridors" of the South and Southeast. It also intends to promote, via credit subsidies, the expansion of on-farm storage capacity, which remains very low in Brazil (about 2 percent of the total). F. Input Policies 112. The implications of import-substitution industrialization policies for Brazilian agriculture have been referred to several times and are treated further in Chapter 3 with particular regard to the evolution of agricultural exports. These policies, however, have also importantly influenced the use and costs of modern inputs. As background to the discussions that follow, Table 26 presents the tariff structure in place in late 1979 on imported Table 25: Estimated Costs of the Beef Storage Program, 1975-79 Change Subsidy Total Buying in Financial Exchange in US$ Cost of Program Year Quantity Price Total Value Prices Subsidy rate million Storage c/ Cost ( 000 MT) (Cr$/kg) (million Cr$) (million Cr$) (Cr$/US$) (US$ million) 1975 159 8.90 1415 28 132 8.10 16 17 33 1976 209 10.90 2278 41 311 10.70 29 22 51 1977 208 13.20 2745 43 393 14.15 28 22 50 1978 149 26.00 3874 39 503 18.00 28 16 44 1979 190 43.80 8322 70 - 30.00 20 20 a/ The annual change of FGV price index no. 2. b/ The subsidy was estimated for 4 months and considering that the selling price was equal to the buying price in nominal terms for all years except 1979. c/ Freezing, defreezing and operating costs for four months estimated. at US$115/MT. Source: COBAL and mission estimates. - 54 - Table 26: Nominal Import Tariffs on'Selected Agricultural Inputs, November 1979 (Percent) Nominal Tariff Rate 1. Chemicals Insecticides 37 Fungicides 37 Herbicides 37 2. Machinery and Equipment Plows (various types) 30 - 45 Planters 30 - 45 Combines 30 - 45 Seed and bean cleaning imachines 35 - 45 Dairy equipment (creamers, butter makers, cheese makers, milk separators, etc.) 15 - 45 Crushing and grinding machines 15 - 20 Cocoa crushers 15 - 45 Equipment for sugar extraction 30 - 45 3. Tractors Two- and four-wheel tractors 30 Source: Tarifa Aduaneira Brasileira - November 1979. ~~~~~~~~~~~~~~~..... . ,.,, .,...........i ...... ........ ........... . . - 55 - inputs to the agriculcural sector. The tariffs levied on chemicals, farm machinery, and tractors are substantial and significantly increase input costs to farmers seeking to adopt modern production practices. This negative effect is offset, however, for those farmers who have access to subsidized credit. 113. Fertilizer. Brazilian agriculture relies heavily on the use of fertilizers, consumption reaching approximately 4 million MT of nutrients per year in 1980 (Table 27). Almost 50 percent of fertilizers consumed are phosphoric, 30 percent are potassic, and the remaining 20 percent are nitrogen products. This relatively atypical distribution reflects the acute lack of phosphorous in Brazilian soils as well as the importance of soybeans which demand little nitrogen. Since 1965, fertilizer consumption has expanded at an extraordinary rate of 20 percent per year, with phosphorous use growing 21 percent per year, and nitrogen at 19 percent annually. 114. Six crops absorbed almost 75 percent of total fertilizer consumption during 1975-1977 (Appendix Table 5.2). Soybeans were the main user, account- ing for 21 percent of the total. Sugarcane was second (15 percent), followed by wheat (11 percent) and coffee (10 percent). Rice and corn consumed 8 percent each. Demand for fertilizer thus comes primarily from the farmers who produce grain and export crops, although growing use by other producers is evident over the period. Regionally, fertilizer use is concentrated in the Southeast and Center-West, with more than 60 percent of total consumption (rice, coffee, sugarcane), and the South (soybeans, wheat) which absorbs over one-fourth (Appendix Table 5.3). The remaining 10 percent is used in the North and Northeast. The rapid growth of fertilizer use in the South since the early 1960s is almost entirely associated with the soybean boom. 115. The fertilizer industry has been a major target of Brazil's import- substitution policies since the late 1960s. As a consequence, domestic fertilizer production, stagnant through the 1960s, has grown rapidly in recent years, the output of nitrogen-based fertilizers and phosphates, both measured in terms of nutrient volume, jumping more than 13-fold and 7-fold, respectively, over the past decade. By 1978 almost 40 percent of nitrogen fertilizer con- sumption and three-foUrths of phosphate fertilizers (by nutrient content) were domestically produced (Table 28). In terms of value added, the share of domestic industry was about 54 percent in the case of nitrogen fertilizers and 27 percent for phosphates 1/. As the industry expanded, it moved also into more sophisticated final and intermediate products. 116. The rapid growth of fertilizer consumption was a consequence, in part, of the favorable evolution of its cost to the farmer relative to the prices of farm products. 2/ Table 29 traces the evolution of these variables for Sao Paulo since 1966. Through 1973 farmers benefitted from strong internal and 1/ The composition of value added is estimated in Jose Roberto Mendonca de Barros, et al; General Technical Economic Survey of the Brazilian Fertilizer Sector, Instituto de Pesquisas Tecnologicas do Estado de Sao Paulo, Sao Paulo, 1980. This document also provides a history and anaLysis of the sector's development. For lack of domestic raw material, all potassium fertilizer is imported. 2/ Also important were the rapid growth of credit and the expansion of state extension services. - 56 - Table 27: Apparent Fertilizer Consumption, 1960/64-1980 (Thousands of metric tons) Year Nitrogen Phosphates Potassium Total 1960-64 (ave.) 57.7 134.3 81.8 273.8 1965 66.5 120.1 99.7 286.3 1966 71.2 116.7 93.2 281.1 1967 103.4 204.6 136.9 444.9 1968 144.3 273.1 184.3 601.7 1969 164.5 265.7 200.3 630.5 1970 275.9 415.9 306.7 998.6 1971 278.4 534.9 350.8 1164.1 1972 411.6 875.6 460.0 1747.2 1973 346.1 804.6 528.5 1679.1 1974 396.4 914.2 521.3 1831.9 1975 406.2 1013.8 557.6 1977.6 1976 498.3 1308.3 721.5 2528.1 1977 700.5 1545.5 962.9 3208.9 1978 707.6 1523.1 990.9 3221.6 1979 p/ 785.0 1567.0 1085,0 3437.0 1980p/ 888.0 1849.0 1269.0 4006.0 pl Preliminary Source: Appendix Table 5.1. - 57 - Table 28: Domestically Produced Fertilizer as Proportion of Total Consumption, 1961-1978 (Percent) Year Nitrogen Phosphates Total-/ 1961 24 69 40 1962 26 73 42 1963 20 63 36 1964 14 75 42 1965 22 69 34 1966 9 72 32 1967 8 53 26 1968 6 45 22 1969 4 48 21 1970 7 41 20 1971 25 45 27 1972 22 33 22 1973 33 41 27 1974 40 41 29 1975 40 51 34 1976 40 67 43 1977 33 68 40 1978 39 74 44 a/ Includes potassium, which is entirely imported. Source: GEAF; Appendix Table 5.1. - 58 - international prices for their products alongside falling world fertilizer prices, so that by that year a unit of farm output in Sao Paulo purchased, on average, 45 percent more fertilizer than in 1966. This situation was sharply reversed in 1974, as world fertilizer prices shot up abruptly and farm product prices weakened. The government intervened in 1975 and 1976 to restore the earlier trends by offering a direct 40-percent subsidy to fertilizer purchasers.l/ Bolstered further by rising farm prices, the parity index peaked in 1976 and has remained high, falling slowly since. Table 29: Price Indexes for Fertilizer and Agricultural Products for Selected Years, Sao Paulo, 1966-1979 (1966=100) Prices Paid Prices Received Ratio Year for Fertilizers for Agric. Prod. (2/1) (1) (2) (3) 1966 100 100 1.00 1969 157 185 1.18 1972 259 351 1.36 1973 342 497 1.45 1974 850 638 0.75 1975 583 a/ 881 1.51 1976 612 a! 1,413 2.29 1977 1,101 2,183 2.00 1978 1,455 2,601 1.78 1979 2,719 4,599 1.69 a/ Adjusted for subsidy of 40 percent of purchase price. Source: Instituto de Economia Agricola. 117. Despite the trends shown above favorable to the farmer, fertilizer prices in Brazil have been chronically above the international prices of equivalent products. Fertilizer prices are controlled at the retail level with the joint but conflicting objectives of stixmulating both farm demand and industrial expansion. The profit margins available to domestic fertilizer producers at the various stages of production are also affected by the government-determined "contingency ratio" setting the maximum proportions of imported inputs and components. In general, profit margins have tended to be more volatile than prices to the farmer, as price controls and the contingency ratio have been used to insulate the farm sector somewhat from the volatility of international fertilizer prices. 2/ Consequently, the degree to which the Brazilian farmer has been "taxed" by the protection given the domestic fertilizer industry has varied sharply from year to year with world prices. 1/ The subsidy was paid by the Bank of Brazil to the fertilizer suppliers on the basis of receipts to the farmer, who, in addition, was given a six-month credit for the remaining 60 percent. The annual cost of this subsidy program has been estimated at US$500 - 600 million. Amid reports of numerous misallocations and fraudulent sales receipts, the program was discontinued. 2/ See Appendix Table 5.4. - 59 - 118. Differences between fertilizer prices to the farmer in Brazil and the United States during 1977-79 are reported in Table 30, and Table 31 compares the cost to the farmer of selected domestic and imported fertilizers in 1978. In 1977-79 urea prices in Brazil averaged 54 percent above those in the U.S., while the price differential for phosphates averaged more than 80 percent. Brazilian farmers in 1978 were paying, on the average, 40 percent above the import price for phosphate products and 12 percent above for nitrogen products. These substantial price differentials, which increased sharply after 1974 with the decline of world fertilizer prices, were partially compen- sated by the generous financing granted by the Ban k of Brazil. U7ntil recently, fertilizer loans were offered at zero interest. Assuming a six-month loan, covering 100 percent of the fertilizer cost, and an annual rate of inflation of 50 percent, the subsidy would amount to 20 percent of the value of the loan. Fertilizer loans currently carry interest charges at the same rate as other agricultural production credit but, with the acceleration of inflation, continue to be heavily subsidized (para 44). 119. There appear to be four principal reasons for the higher cost of locally produced fertilizers in Brazil. In the first place, the national fertilizer industry is located near the ports (especially Santos) as a consequence of its origins as an industry primarily mixing imported components. The recently discovered domestic raw material (phosphate rock), however, is located in the interior in Minas Gerais. The high transport cost of moving this raw material to the factories raises the overall cost of using it some 25 to 30 percent above the level of imported phosphate. Reduction of these costs would entail an expensive use of resources either to improve the rail system or to relocate the industries. Secondly, while fertilizer plants in the industrial countries are fully utilized throughout the year, producing for their own farming community in the spring and summer and for the interna- tional market in the fall and winter, in Brazil the plants produce for only part of the year, servicing only the local market. This idle capacity in the off-season raises the capital costs per unit of output substantially and increases the burden of amortizing the original investment costs. Thirdly, the lack of an ample supply of natural gas requires the use of more expensive processes. Finally, the low level of phosphate concentration in the local phosphate rock also increases the costs of achieving the desired level of nutrient in the final product. 120. Several modifications to the present import-substitution strategy are suggested by the preceding discussion. With regard to phosphates, Brazil should concentrate its efforts in the area where it would appear to enjoy a comparative advantage, i.e., simple super phosphates. This product can use the local supply of phosphate rock and does not require expensive imports of phosphoric acid. It also uses very little sulphur, which is needed by the more complex compounds. In addition to foreign exchange savings, this sim- pler process does not require large-scale investments to produce efficiently, thereby reducing capital coscs significantly. Finally, this simpler concen- trate is associated with higher plant response than the more conmplex concen- trates and contains more micro-nutrients. On the negative side, higher - 60 - Table 30: Fertilizer Prices at Farm Level in Brazil and United States (US dollars per metric ton) -------------------------Fertilizers ------------ Year Month Urea Ammonium di- Superphosphate 5-20-20-- 15-15-15- phosphate (46-48%) 1977 May USA 171 180 148 128 149 Brazil 250 375 282 215 236 December USA 167 183 151 127 147 Brazil 249 375 281 214 235 1978 May USA 170 186 153 131 154 Brazil 273 349 289 212 233 December USA 168 186 153 128 152 Brazil 269 345 285 217 238 1979 May USA 175 250 172 141 167 Brazil 271 355 289 246 266 a/ Numbers indicate the percentages of active components of nitrogen, phosphorous, and potassium in that order. Source: GEAF, Ministry of Agriculture. - 61 - Table 31: Domestic Cost t6'Farmer'of'Fertilizers and Fertilizer Inputs Relative to Import Price, 1978 Price Ratio: A. Fertilizers 'Domestic/Imported Superphosphate Simple .89 Superphosphate Triple 1.64 Mono-Ammonium Phosphate 1.47 Di-Ammonium Phosphate 1.31 Urea 1.15 B. Fertilizer Inputs Phosphoric Acid 1.65 Losp'horic Rock 1.22 Ammonium 1.74 Source: Adapted from Instituto de Pesquisas Tecnologicas do Sao Paulo, Centro de Estudo de Fertilizantes, "Perfil Tecnicc Economico do Setor de Fertilizantes," Sao Paulo, 1979, p. 114. - 62 - transportation cost (due to lower content of active material) must be taken into account. 1/ 121. Plans for future plants to expand production of the higher-cost complex phosphate intermediate products (super triple, super thirty, DAP and MAP) should be reconsidered. These products are highly dependent on foreign inputs such as sulphur and phosphoric acid. Furthermore, their processes are geared to U.S. technology, which demands a higher concentrate than found in the local supply of phosphate rock. The economies of large scale in these processes raise the costs of investment substantially and reduce the possibil- ity for efficient industrial relocation in the future. 122. Given the unsatisfactory experience of allocating fertilizer sub- sidies through the instrument of rural credit, future subsidies, if any, should be allocated directly to the industry. In this way, all farmers potentially could benefit instead of only those with access to formal credit lines. Finally, it should be noted that the substantial economic incentives given to fertilizer use in the past may have pushed their consumption beyond the optimum, at least for some crops. By transforming fertilizer into a relatively "cheap" input, it may have been used with some degree of careless- ness, particularly in the South. This possibility should be explored, given the present importance of fertilizer in the production matrix of Brazilian agriculture and the fact that further increases in fertilizer use will put additional pressure on the demand for foreign exchange. 2/ 123. Tractors. The stock of tractors in Brazil grew close to 11 percent per year between 1960 and 1977 (Table 32). The use of mechanical power in agriculture increased at a still faster rate, inasmuch as the average size of tractors has also grown. The area planted per tractor fell from 520 ha in 1960 to 130 in 1977. In the latter year, the number of arable hectares per tractor was only slightly above that of Australia and below that of Argentina. 3/ 1/ For the acid, low phosphate soils of the Amazon and the Cerrado, long-term gains are possible from the application of finely ground rock phosphate or a material in which only part of the phosphate has been converted to superphosphate. Rock phosphate could thus be shipped directly from the mine without the costly transportation to the processing plants in the South. Rock phosphate could also be adequate to meet the quick uptake needs of near-term crops if a high proportion of its phosphate content is in citric acid soluble form. Otherwise, the more complex phosphate products may be called for. 2/ A projection of the domestic demand-and-supply balance through 1983 may be found in J.R. Mendonca de Barros, ot. cit. 3/ FAO, Production Yearbook, Vol. 32, Rome, 1978. Such figures have to be taken with some caution, however, given the aggregate nature of the data. In addition, a tractor's life in Brazil may be shorter than in other areas because of the relative lack of skilled labor for driving and maintenance, and the heavy use of machinery for opening up new lands. - 63 - Table 32: Stock of Tractors and Area Planted, 1960-1978 Year Stock of Tractors a/ Area Planted Ha/Tractor 1960 55.3 28,712 520 1970 146.3 33,984 232 1975 284.5 33,803 137 1977 346.1 44,840 130 1978 377.3 a! Tractors of 10 IIP and more. Source: Ministry of Agriculture. 124. Much of the tractor stock is concentrated in the South and South- east. In 1970 Sao Paulo and Rio Grande do Sul had 65 percent of all tractors in Brazil; their share decreased to 50 percent in 1977. Between the same two years, the combined share of Parana and Minas Gerais increased from 18 to 29 percent of the total stock. The proportion of tractors in the rest of the country increased slightly from 17 to 20 percent. 125. Tractor prices, measured in product terms, show a clear decline between the early 1970s and the last two or three years (Table 33). The decrease has been greatest for coffee (reflecting high world prices), but it was also important in sugarcane, beans (until 1978) and corn. The average corn price equivalent of a medium-sized tractor (36-45 HP) in Brazil in 1973-1975 was 88 MT of grain, while the price of a tractor of the same size in the United States was equal to 49 MT of corn. In 1976-1978 the same tractors cost the equivalent of 92 and 86 MT of corn, respectively, a substantial closing of the inter-country gap. Such comparisons can give only a general idea of the cost situation. The information available does not specify the implements included with each unit. Nevertheless, the general conclusion is that Brazilian industry is supplying tractors at prices roughly approaching the international, and, when measured in product terms, domestic prices for tractors have generally been declining. 126. Tractors, as well as other agricultural machinery, are financed with four- to five-year credits. With nominal interest rates lagging well behind tn2 inflation rate, the implicit subsidy grew in importance over time. A four-year credit granted in 1975, at an annual rate of interest of 15 percent and due in four payments of equal value, resulted in a subsidy equivalent to 54 percent of the original principal. The subsidy element of Bank of Brazil loans for tractors in 1976 amounted to roughly US$250 million. Recent modifi- cations of agricultural credit terms, however, should significantly reduce the subsidy to machinery investments (para 44). - 64 - Table 33: Tractor Prices in Product Terms and in US Dollars- Year Rice Beans Corn Su arcane Coffee US dollars ----------------(Metric tons equivalentY---------------------- (Current) 1970 59 32 145 12.Q3 20 4408 1971 39 30 127 1119 21 4283 1972 36 30 104 1075 20 4688 1973 43 15 98 1153 15 5754 1974 34 21 85 823 14 5888 1975 40 24 83 1183 13 7889 1976 41 11 78 699 6 6237 1977 46 16 98 703 5 6572 1978 45 33 101 958 10 10345 1979w/ 36 25 87 8 a/ 39-45 HP four-wheel tractor. P/ Preliminary. Source: Ministry of Agriculture. - 65 - 127. Seeds. The production of improved seed has grown fairly rapidly in recent years (Appendix Table 5.0) but application remains limited to a few major crops. Table 34 summarizes the wide disparity among crops and regions in the use of improved seeds. Beans are at the bottom of the distribution with only 4 percent of area planted with improved seeds in 1978/79, while, on the other hand, 90 percent of the area planted to wheat benefited from the use of improved seeds. Cotton and soybeans were relatively advanced in terms of using better seeds, while corn and rice used a lower proportion. These differences broadly reflect past decisions on research priorities in agricul- ture, the wide disparities in the technological sophistication of Brazil's farmers, and differences of access to credit and other public services. Table 34: Use of Improved Seeds, by Region and Crop, 1978/1979 (Percent of area planted) Country Crops Northeast Southeast South Center-West Average Cotton 20 90 91 75 50 Rice 8 50 42 30 41 Beans 4 2 8 1 4 Corn 4 70 35 40 40 Wheat - 67 100 40 90 Soybeans 67 90 40 70 Source: SNAP. 128. The more intensive use of improved seeds in crops like corn and beans constitutes a potentially important source of growth. The low rate of use of improved seeds and the low levels of national yields in both crops suggest the existence of a wide margin for improvement. Given the large amount of land committed to these two crops (12-14 million ha), a modest increase in yields would produce an important increase in aggregate food supply. 129. Research and extension to develop and disseminate improved seed should thus be given high priority. For some crops, such as hybrid corn, the seed for which farmers must acquire annually, the profit incentive should be sufficient to stimulate private seed development and commercial distribu- tion. 1/ The problem is to assure the availability of financing and technical know-how to the widely scattered small farmers. For other crops, such as black beans, in which the plant once grown produces its own improved seed on the farm, the government itself should undertake, directly or via subsidiza- tion, the necessary research, development, and distribution. G. Research and Extension 130. Policies intended to improve technology have had important impacts on Braziliarn agriculture. Prior to looking at this experience, however, it is useful to recall the history of developed countries with open land frontiers. In general, most of the poor countries of the world had built only rudimentary research systems by 1965, and even today few have truly high quality systems. 1/ During some periods, however, an inhibiting ceiling has been placed on the ratio of the price of seed corn to the price of ordinary corn. - 66 - Brazil also had not developed a strong research system prior to 1965, in spite of its relatively advanced stage of development. However, most developed countries with open land frontiers have similar histories. When land expansion has been possible at low cost few countries historically have built strong research systems to achieve rapid crop yield increases. Thus the United States, too, was slow in building its research system relative to several European countries and Japan. 131. With the creation in 1973 of the Brazilian Agricultural Research Enterprise (EMBRAPA) and the Brazilian Enterprise for Technical Assistance and Rural Extension (EMBRATER), Brazil launched a massive program to reorganize basic investments in agricultural technology. Both institutions are connected to the Ministry of Agriculture. EMBRAPA is the central coordinating agency of a Cooperative System of Research comprising both federal and state research institutions, the universities, and private entities. The research is carried out through eleven National Centers for Product-Specific Research, 1/ three regional Resource Centers, 2/ the Center for Agriculture and Food Technology, the National Center of Genetic Resources, the National Service for Soil Testing and Conservation, the Service for the Production of Basic Seeds, the Regional Unit for Forestry Research in the Center-South, federal research units operating at the state level, and state research institutions. Most important of the latter is the research carried out under the aegis of the Secretariat of Agriculture of the State of Sao Paulo, long the national leader in this area. Finally, several specialized institutions, such as the Sugar and Alcohol Institute (IAA), the Brazilian Coffee Institute (IBC), and the Executive Commission for the Planning of Cocoa Cultivation (CEPLAC), devote substantial resources to research and extension services within their partic- ular sectors, financed largely out of taxes on the growers. 132. Table 35 provides a rough estimate Qf public expenditures on research and extension. The increase in total real resources allocated for these 1/ The eleven Product Centers and their locations are: Cotton - Campina Grande, Pernambuco; Rice and black beans - Goiania, Goias; Goats - Sobral, Ceara; Beef cattle - Campo Grande, Mato Grosso do Sul; Dairy cattle - Coronel Pacheco, Minas Gerais; Manioc and fruit - Cruz das Almas, Bahia; Corn and sorghum - Sete Lagoas, Minas Gerais; Rubber - Manaus, Amazonia; Soybeans - Londrina, Parana; Swine and poultry - Concordia, Sta. Catarina; and Wheat - Passo Fundo, Rio Grande do Sul. 2/ The three regional centers by location and specialization are: Brasilia, Federal District - Agriculture of the cerrados; Belem, Para - Humid, tropical agriculture; and Petrolina, Pernambuco and Juazeiro, Bahia - Semi-arid, tropical agriculture. - 67 - Table 35: Expenditures on Agricultural Research and Extension 1974-1978 (Millions of 1965/1967 cruzeiros) 1974 1975 1976 1977 1978 A. Total Country Research 80 122 158 178 223 Extension 141 141 229 250 285 Total 221 263 388 428 508 B. EMBRAPA. and SIBRATER Research 33 67 100 117 143 Extension 62 58 158 182 213 Total 95 125 258 299 356 C. Secretariat of Agriculture, S. Paulo Research 24 25 24 21 33 Extension 54 61 50 45 45 Total 78 86 74 66 78 D. Other Agencies Research 23 30 34 39 47 Extension 25 22 21 23 27 Total 48 52 55 62 74 Source: Adapted from G.L.S.P. da Silva,et al., "Investimento na Gera§ao e difusao de tecnologia agr'cola no Brasil," Sao Paulo, 1979, mimeo. - 68 - purposes between 1974 and 1978 was impressive, with average annual growth on the order of 23 percent. Public research expenditures are currently equivalent to about one percent of agricultural value added, a substantially higher propor- tion than is spent by other Latin American countries. The rapid growth of research expenditure is largely accounted for by the expansion of EMBRAPA, whose estimated share of the total rose from 41 to 64 percent over the period. 133. The distribution of EMBRAPA's commodity-specific crop research during 1975-77 is shown in Table 36. Table 36: Distribution of EMBRAPA Commodity-Specific Research, by Crop, AvJerage 1975-77 (Percent) Crop Rice 17.5 Potatoes 2.8 Black beans 13.3 Manioc 6.7 Corn 18.8 Soybeans 22.2 Wheat 18.7 100.0 Source: EMBRAPA, FGV. Attention to the basic food crops has grown considerably, both absolutely and relatively, in recent years, although EMBRAPA allocates only about half of its research budget to specifir. commodities. 1/ Table 37: Regional Distribution of Expenditures by EMBRAPA State Units, 1975-1979 (Percent) South and Year Southeast Northeast North Center-West Total 1975 62.7 5.3 4.9 27.1 100.0 1976 49.1 15.3 12.4 23.2 100.0 1977 45.0 17.7 14.5 22.8 100.0 1978 44.1 20.2 12.2 23.5 100.0 1979 40.2 18.2 12.1 29.5 100.0 Source: EMBRAPA. 1/ Data are not available to describe the commodity breakdown of total agri- cultural research in Brazil. It is suggestive, however, that of research published between 1970 and 1977, 28 percent dealt with coffee; wheat and soybeans each accounted for 13 percent; and sugarcane, corn, rice, and black beans each represented 8 percent. - 69 - 134. Table 37 shows the regional distribution of EMBRAPA research expen- ditures at the level of the state units. Although expenditures via these channels accounted for less than 60 percent of EMBRAPA resource applications over this period, there was a clear effort to achieve a redistribution of the historical pattern of research in favor of the Northeast. Inasmuch as non- federal research tends to be heavily concentrated in the Southeast and South,, however, those regions continue to be the primary beneficiaries of research in total. H. Taxation of Agricultural Land, Incomes, and Product 135. Rural land tax. The Brazilian Land Statute of 1964 established four instruments --- regularization of titles, colonization, expropriation in the social interest, and the rural land tax -- for rationalizing the owner- ship and use of agricultural land. The land tax, levied annually, was based on the unimproved value of the land as declared by the landowner and subject to spot verification by the National Institute of Colonization and Agrarian Reform (INCRA), the collecting agency. Exempted were farms of 25 ha or less, cultivated by the farmer and his family, provided they did not own other property. Eighty percent of the tax collected was earmarked to the local municipal governments, the remainder staying with INCRA. 136. The tax rate was a complex function of (i) farm size, (ii) distance from consuming centers, (iii) social conditions on the land, defined as the nalure of land tenure and the adherence to proper labor contracts, and (iv) the level of productivity as compared to specified norms. Multiplication of the various coefficients of progressiveness and regressiveness gave a theoretical range for the tax rate of 0.024 to 3.455 percent. The tax thus calculated could be reduced by half, if the farmer had a farm development plan approved by INCRA. 137. In practice, the land tax proved far less progressive than had been intended. The average tax per hectare per taxpaying landowner in 1978 amounted to 1.60 cruzeiros (about US$.09). The smallest farmers paid Cr$ 1.71, the average dropping to Cr$ 1.51 and 1.47 through the next two size classes before rising to Cr$ 1.75 per ha for the largest landowners. Moreover, the tax base reported by landowners was far below actual market values. Land tax collections in 1978 totaled only Cr$ 2.1 billion, or approximately 0.7 percent of agricultural value added. 1/ 138. In December 1979, in an effort to enhance the impact on agricultural incentives and to dampen land speculation, the Government received Congressional approval for a reform of the land tax. The new tax, on the one hand, increases the number of farms exempted altogether from taxation, while, on the other hand, also significantly increases the progressiveness of the tax as an inverse func- tion of the efficiency of land utilization. The projected net impact is a substantial increase in total tax collections (estimated at 30 percent on the 1978 base), the bulk of the additional revenues accruing to the municipal governments. 1/ The Cr$ 2.1 billion cited includes, in addition to the land tax per se, fees collected by INCRA for the annual cadastral survey, a small surcharge earmarked for INCRA, and taxes collected by INCRA for the support of rural trade unions, the National Confederation of Rural Workers and the National Confederation of Agriculture, a landowners' organization. - 70 - 139. Under the new tax system, a standard unit of farm size, known as a "fiscal module" is defined for each municipality, its size depending on local ecological conditions, the predominant agricultural activities of the area, distance from markets, adequacy of existing infrastructure, etc. -- in short, a rough index of the parcel size deemed necessary to provide a minimum subsistence and prospects for future progress to the farmer and his family. The tax base continues to be the landowner's declared value of the unimproved land. 140. Farms of one module or less are exempted from the tax; tax rates on farms of more than one module graduate from 0.2 percent for the smallest taxable bracket (1-2 modules) to 3.5 percent for farms larger than 100 modules. Starting from the basic tax rate thus established, the farmer can earn a reduction of his tax liability, or alternatively suffer a multiplication of it, depending on (i) the degree of land utilization, defined as the ratio of area effectively utilized to the farm's total exploitable area; and (ii) the efficiency of utilization, measured as the yields achieved on the farm relative to a set of regularly updated regional standards. Application of these two criteria could result in a reduction of up to 90 percent of the applicable tax rate. 1413 Prolonged failure to meet minimum utilization standards, however, will result in sharply increased tax rates. Specifically, minimum utilization rat'ios are set as a function iL" the size of the regional fiscal module, as follows: Size of fiscal module (ha) Minimum degree of utilization (%) Up to 25 30 25-50 25 50-80 18 More than 80 10 Any farm falling below the r,iinimam degree of utilization for the size class of the fiscal module in it6 area will have its tax rate doubled in the first year such a situation prevails, tripled in the second year, and quadrupled in the third year and thereafter. The tax rate could thus rise as high as 14 percent. This progressiveness over time can be suspended for up to three years in the presence of approved farm development projects. 142. The effectiveness of the tax reform will, of course, depend in the first instance on the seriousness with which it is viewed by landowners and administered by INCRA. 1/ In the past, the auditing of returns has been prac- tically nonexistent. INCRA has indicated its intention to devote greater resources to inspection and enforcement, taking advantege of the cross-checks possible from income tax returns (filed jointly with the land tax forms) and credit applications to the Batik of Brazil. Heavy penalties are to be assessed for discovered underreporting. Manpower and budget cornstraints, however, may continue to hinder INCRA's performnance in this regard for the foreseeable future. 1/ The tax is based on the premise that land is being uced unproductively. Overzealous application, on the other hand, could result in the cultiva- tion of land better left idle if the tax thereby avoided exceeded the financial losses from production. - 71 - 143. Even if the tax is fully collected, moreover, the continued avail- ability of heavily subsidized credit, access to which often depends in practice on title to land, will undercut the objectives of prompting productive land use and. discouraging land speculation. At the proposed maximum tax rate, a land speculator would break even with a 14 percentage point ,:`fferential between the arniual rise in land prices and the annual intereL: rate. In recent years, that differential has been substantially greater. 144. Income tax. Investments in agriculture are encouraged through an extensive system of tax incentives, by which an individual farmer's net income may be reduced by up to 80 percent, with a three-year carry-forward provision for investments exceeding this limit. Taxable net income is then calculated as 50 percent of net income less incentives. A farmer taking full benefit of these deductions, therefore, would ay tax on only 10 percent of his total net income from agriculture. The maximum net taxable income is, in any event, limited to 15 percent of gross agricultural receipts. In the case of corpora- tions, agricultural net earnings are taxed at a flat rate of 6 percent, compared to a 30-percent rate in other sectors. 145. A total of 3,470 declarations were filed in 1978 based on agricul- tural incomes in 1977. (There are about 5 million farm establishments in Brazil.) Of these, 1,772 declarations showed positive net taxable income. The tax levied on agricultural income totaled some Cr$ 208.4 million, which was equivalent to less than 0.1 percent of sectoral value added, 1.1 percent of the sector's reported gross operating revenues (excluding capital gains and earnings from nonfarm activities) and 14.8 percent of declared net taxat'1e income. 146. Value-added tax. Agricultural products, excluding basic foodstuffs, are subject to the state-levied value-added tax (ICM). Prior to 1975, state goli--ments enjoyed considerable latitude to alter tax rates on a product-by- proi,-t basis, giving rise to considerable geographical disparities. Because of the sizeable revenues generated by its strong industrial base, the Southeast, particularly Sao Paulo, was able to set lower tax rates on farm goods than the fiscally weaker states of the Northeast. In Pernambuco, for example, about half of ICM revenues come from sugarcane, a crop that is not taxed at all in Sao Paulo. 147. Since 1975, ICM reductions have been possible only if agreed to by all the states. The inter-state differences inherited from the past, however, remain. Further differentiation arises as a result of each state's freedom to set legal reference prices (pautas) on some commodities for ICM purposes; these are justified as a needed administrative simplification for products subject to significant market volatility. Reference prices may lag consider- ably behind market trends, however. Finally, it may be noted that actual tax collections fall well below the level suggested by application of the relevant tax rates, indicating a high degree of tax evasion. 148. With these caveats in mind, the general ICM rate on goods in intra- state commerce is 14 percent in the states of the Center-South and 15 percent in the North and Northeast. Goods moving between states are taxed 11 percent, and exported commodities are taxed at a 13-percent rate. Only processed agricultural exports are eligible for ICM tax rebate, providing one element of a general policy to encourage the processing industries (see Chapter III). - 72 - Chapter III: Foreign Trade Policies and Agricultural Exports A. Export Performance 149. Tables 38 and 39 summarize the growth 'of total exports and agriculture-based exports since the mid-1960s. Agriculture-based exports, which are broken down into crops in natura, semi-processed, and manufactured, grew at a nominal rate of 25 percent per year between 1969 and 1973, slowing to about 15 percent per year from 1/73 to 1977, and declining as a consequence of the bad harvest in 1978. 1/ At the same time that the overall growth of farm-based exports was quite satisfactory, a significant change occurred in the relative export shares of crops in natura and processed and industrial- ized agricultural products. Whereas in 1964-68 raw crop exports accounted for 72 percent of all exports and 85 percent of agriculture-based exports, by 1977 semi-processed and manufactured agricultural exports accounted for 28 percent of all exports and 42 percent of agriculture-based exports. Most of this shift occurred during the rapid growth period up to 1973, when semi-processed and manufactured agricultural exports expanded at an average annual rate of almost 47 percent. 150. That the highest average growth rates were enjoyed by the relatively more industrialized products is not surprising, given the higher income- elasticities of demand for processed goods. Nevertheless, as discussed below, a part of this growth appears to have been artificially stimulated by Brazil's own trade policies. The unusually high growth rates for cotton textile products and livestock-based manufactures (shoes, processed meats, etc.) stand out. The rapid growth of soybean bran and cake was the major element in the high growth of crop-based, semi-processed products. 151. In the 1973-1977 period, average growth rates declined, and year-to- year changes were somewhat more volatile for all export categories. The unusually high growth rates of 1968-73 could probably not have been expected to continue on a larger base. At the same time a bad crop year in 1975 affected the results, as did the general decline in world trade during this period. Export performance after 1974 also reflects the greater instability of agriculture production in Brazil during those years. 152. Table 40 breaks down the growth rates of the various categories of agriculture-based exports in terms of value and volume. During the rapid export expansion of the early 1970s, price increases contributed importantly to the value of crop exports in natura; nevertheless, volume growth averaged a quite reputable 9.5 percent per annum. The quantum rates of growth for crops in natura fell to only 2.7 percent per year from 1973 to 1977, however, while total value grew at a rate of almost 15 percent per year. 1/ The classification of exports used here is slightly different from that applied in Table 5 and Appendix Table 2.1. The trends noted, however, are the same. Table 38: Brazilian Exports by Sector and Degree of Processing, 1964/68-1978 (Millions of US dollars) 1964-68 1969 1973 1974 1975 1976 1977 1978 Export Category Value % Value % Value % Value % Value % Value 7 Value % Value Z I. Total Exports $1,660.4 100.0 2,311.2 100.0 6.199.2 100.0 7.951.0 100.0 8,669.9 100.0 10,128.3 100.0 12,120.2 100.0 12.658.9 100.0 II. Total Agricultural Exports 1,412.1 85.0 1,915.7 82.9 4.716.9 76.1 5.665.7 71.2 5.520.0 63.7 6,756.6 66.7 8,201.7 67.7 7.482.8 59.1 1. Agricultural Raw Materials (in natural 1,204.1 72.5 1,574.4 68.1 3,132.0 50.5 3,524.6 44.3 3,413.2 39.4 4,163.7 41.1 4,778.8 39.4 3,787.7 29.9 2. Processed and Industrialized Agricultural Products 207.9 12.5 341.3 14.8 1,584.9 25.6 2,141.1 26.9 2,106.8 24.3 2,592.8 25.6 3,422.8 28.3 3,695.1 29.2 A. Semi-processed Agricultural Products 151.7 9.1 235.9 10.2 966.3 15.6 1.193.6 15.0 1.196.6 13.8 1,472.1 14.5 1.962.2 16.2 1,898.0 15.0 a) Crop based (oils, brans, cakes, cocoa butter, "crystal" sugar, molasses) 75.3 4.5 132.8 5.7 799.4 12.9 1,008.1 12,7 1,025.4 11.8 1,288.1 12.7 1,799.6 14.7 1,677.8 13.3 b) Livestock based (cured leather and skins) 6.0 0.4 11.7 0.5 40.1 0.6 37.8 0.5 48.2 0.6 88.5 0.9 92.8 0.8 99.3 0.8 c) Extractive based (wood products, wax, pulp) 70.4 4.2 91.4 4.0 126.8 2.0 147.6 1.9 123.0 1.4 95.5 0.9 89.9 0.7 120.8 0.9 B. Manufactured Agricul- tural Products 56.2 3.4 105.3 4.6 618.6 10.0 947.4 11.9 910.2 10.5 1,120.8 11.1 1,460.7 12.1 1,797.2 14.2 a) Crop based (refined sugar, instant coffee, processed fruit juice, orange juice concen- trate, refined soybean oil) 17.7 1.1 43.9 ±1.9 176.3 2.8 241.6 3.0 292.3 3.4 453.4 4.5 645.4 5.3 827.6 6.5 b) Cotton textiles and wool pzoducts (incl. clothing; excl. syntheticsl 6.0 0.4 7.2 0.3 179.2 2.9 255.7 3.2 212.7 2.4 208.2 2.1 268.9 2.2 282.1 2.2 c) Livestock based (processed meats, meat extracts, leather products, and shors) 11.8 0.7 17.7 0.8 174.8 2.8 242.2 3.0 266.7 3.1 317.9 3.1 336.0 2.8 425.0 3.4 d) Extractive based (wood products, furniture, rubber products, sisal, essential oils and paper products) 20.7 1.2 36.5 1.6 88.2 1.4 207.8 2.7 138.5 1.6 141.4 1.4 210.2 1.7 262.4 2.1 III. Unprocesse, Mining Products 127.0 7.6 178.9 7.7 585.0 9.4 670.9 8.4 1.096.9 12.7 1,118.2 11.0 970.7 8.0 1,095.0 8.6 IV. Nonagriculturally based Manufactured Products 123.1 7.4 223.5 9.7 897.3 14.5 1.614.4 20.4 2,053.0 23.7 2.253.5 22.2 2.947.8 24.3 4.081.1 32.2 Sources: Annual Reports of the Carteira do Comercio Exterior (CACEX), Banco do Brasil, and Banco Central do Bresil. - 74 - Table 39: AVerage Annual Rates'of Gt&oth of Exports, by Category, 1969-1977 (Percent). Average Annual Growth Rate al Export Category 1969 to 1973 1973 to 1977 I. Total Exports 28.0 18.2 II. Total Agricultural Exports 25.2 14.8 1. Agricultural Raw Materials 18.8 11.1 2. Processed Agricultural Products 46.8 21.2 A. Semi-processed Products 42.3 19.4 1. Crop-based 56.6 22.1 2. Livestock-based 36.1 23.4 3. Extraction-based 8.5 - 8.3 B. Manufactured Agricultural Products 55.7 24.0 1. Crop-based 41.6 38.3 2. Cotton. Textile and Wool Products 123.4 10.7 3. Livestock-based 77.3 17.7 4, Extraction-based 24.7 24.2 III. Unprocessed Mining Products 34.5 13.5 ."V Nonagricultural Manufactured Products 41.6 34.6 a/ Compound rates of growth between end years. Source: Table 38. Table 40: Average Annual Rates of Growth of Export Value and Voltite,'19691978a/ (Percent) 1969 to 1973 1973 to 1977 1977 to 1978 Export Category 'US$ Value In Tons US$ Value in Tons US$ Value In Tons 1. Total Exports 28.0 20.7 18.2 6.3 4.4 6.9 2. Total Agricultural Exports 25.2 14.2 14.8 9.6 -8.8 -19.3 (a) Agricultural Raw M4aterials 18.8 9.5 11.1 2.7 -20.7 -43.3 (b) Semi-processed Agricultural 42.3 22.2 19.4 17.3 -3.3 -0.5 Products (c) Manufactured Agricultural 55.7 51.8 24.0 26.0 23.0 16.4 Products 3. Unprocessed Mining Products 34.5 20.8 13.5 6.1 12.8 13.8 4. Nonagricultural Manufactured 41.6 59.7 34.6 0.1 38.4 16.5 Products a! Compound rates of growth between end years. Tource: CACEX. - 76 - 153. The physical growth of the semi-processed and manufactured agricul- tural exports was most impressive in both periods, averaging 22 and 52 percent per year, respectively, from 1969 to 1973, and 17 and 26 percent per year between 1973 and 1977. Indeed, in the later periods, the physical growth of processed agricultural exports was significantly higher than that for nonagri- cultural manufactures. Obviously, any appraisal of Brazil's agricultural export performance must take into account the structural shift which has occurred and not look only at the performance of exports in their raw state. Under a different set of objectives and policies, Brazil presumably could have processed a smaller proportion of its farm output and exported more in unpro- cessed form. 154. Another significant dimension of Brazil's agricultural export growth has been its remarkably rapid diversification. Table 41 shows the number of agricultural export crops earning more than US$100 million per year; the number of agriculture-based export products whose exports, when accumulated by rank size, are required to account for at least 50 percent of total exports; and the number of agriculture-based products which individually account for at least one percent of total exports. 1/ During the mid-1970s only two products earned US$100 million, two products accounted for 50 percent of total exports, and twelve products earned one percent or more of total export earnings; by 1977, however, 16 agricultural products earned over US$100 million, 11 were needed to sum 50 percent of total exports, and 19 agricultural products earned at least one percent of total export earnings. Furthermore, more than half of these products by 1977 were processed or manufactured goods. 155. The following section will discuss the policy environment which encouraged the dramatic shift toward the greater domestic processing of farm products for export. A more detailed look will then be taken at soybeans, whose dramatic expansion has been perhaps the single most important element in Brazil's agricultural performance over the past 15 years. Sugar, a tradi- tional export now turning inward as a substitute for imported petroleum, is discussed in Chapter IV, while other export crops are treated in the Annex to the report. B. Policies Affecting Agricultural Exports 156. The anti-export and anti-agriculture bias of the general policy framework favoring the industrial sector and urban consumer was described in Chapter II. The differential impact of "compensatory" credit subsidies was also noted, the benefits being enjoyed primarily by grain farmers and those producing for export or local industry. The competitiveness of Brazilian agriculture-based exports has also been influenced over time by a wide array of product-specific government market interventions, including taxes and subsidies on farm inputs and outputs; export taxes, quotas, quality controls and prohibitions; market guarantees for local input manufacturers; and supply guarantees for local agroirtidustries. 1/ The individual products comprising at least one percent of total exports are listed in Appendix Table 2.5. - 77 - Table 41: The Diversification of Agriculture-based Exports, 1964-1977 A. Number of Agricultural Export Products Earning More than US$100 Million 1964-68 1973 1977 No. of Products 2 10 16 B. Number of Agricultural Export Products (by rank size) Comprising 50 Percent of Total Exports 1964-68 1973 1977 No. of Products 2 5 11 C. Number of Agricultural Products Comprising at least One Percent of Total Exports 1964-68 1973 1977 No. of Products 12 17 19 Source: CACEX, - 78 - 157. Table 42 shows for 1975 the calculated net effect on various agriculture-based products of the state value-added tax (ICM), the federal industrial products tax (IPI) and credit subsidies available under Central Bank Resolutions 71 and 296. Agricultural export crops in natura experienced a net taxation resulting from the incidence of the ICM. Net subsidies were received by processed farm products, however, and the more sophisticated the processing activity, the greater the net subsidy enjoyed. Semi-processed products were granted net subsidies ranging from 9 to 25 percent, while more completely processed manufactured goods with an agricultural base received subsidies of from 25 to 50 percent. (Excluded from these calculations are import duty exemptions allowed for many inputs used by exporting industries.) 158. In addition to these quantifiable interventionis, as of November 1979 some 60 agricultural products, including all major export crops and their derivatives, were subject to prior export authorization; specific quota restrictions were applied to a large number of commodities including beef products, soybeans and their derivatives, beet and cane sugar, cocoa, cattle hides and skins, coffee, sisal, and cotton yarn; some 30 products were subject to quality controls; and the export of some 25 products, including unprocessed castor beans, babassu nuts, Brazil nuts, rice, cattle hides, and sugarcane were prohibited. These interventions were applied primarily to raw farm products with the purpose of assuring supplies to the domestic market -and promoting a higher level of processing. The lists of goods subject to export controls of various kinds is frequently modified in response to short-term shortages or balance-of-payments objectives. Indeed, the variability of these interventions may be more destructive of production incentives than the interventions, per se. 159. In support of these policies it is commonly argued that processed goods enjoy more buoyant export markets, earn more foreign exchange, and suffer less price instability than do primary commodities. Vis-a-vis other industries, agroindustries are claimed to have stronger linkages to the rest of the economy, are less capital intensive, conform more closely to domestic comparative advantage, produce goods of benefit to the lower-income groups and lead to a more balanced regional pattern of industrial activity. Substantial benefits along these lines have undoubtedly been achieved, as the processing of agricultural products has progressed. To the extent that the industries promoted are indeed efficient, however, it should no longer be necessary to provide the levels of subsidization noted. That all such industries are operating efficiently, moreover, is questionable. In recent years there has been evidence of growing idle capacity, especially in those industries processing cocoa and soybeans. Such a result is not surprising when the private cost of capital is lowered and the competitive calculation of costs is weakened or relaxed. This situation creates a two-phased problem: the original misallocation of resources and the subsequent pressures to guarantee cheap supplies of raw materials to utilize the excess capacity. Also in question in some cases is whether the processing activities have in fact provided more net foreign exchange than would have been earned through the expansion of raw crop exports. Evidence will be offered below that in the specific case of soybeans such has not been the case. 1/ 1/ Similar evidence regarding cocoa is presented in the Annex. - 79 - Table 42: Structure of Subsidies and Taxes Affecting Agriculture-based Exports in 1975 Subsidy (+) or Tax (-) 1. Agricultural Raw Materials in natura -13.0 2. Semi-processed Products (a) Hides and skins 9.2 (b) Lumber products 10.4 (c) Refined sugar 10.5 (d) Brans, cakes and flour 15.0 (e) Preparations of fruits, vegetables, etc. 23.8 (f) Fats, oils and waxes 25.1 3. Manufactured Agricultural Products (a) Rubber products 29.4 (b) Footwear 30.6 (c) Furniture products 30.9 (d) Manufactured leather products 31.0 (e) Preparations of meats, fish products 31.6 (f) Paper and paper products 36.9 (g) Cotton textile products 45.0 to 50.0 Source: A. C. Pastore, J. A. A. Savasini and J. de Azambuja Rosa, Quantificagao dos Incentivos as Exportagoes, Estudo l1 Funda§ao Centro de Estudos do Comercio Exterior, Rio de Janeiro, 1978 (pp. 51-55). - 80 - C. Soybeans 160. Production. Soybeans constitute the major success story of Brazilian agriculture in the 1970s. Soybean area harvested grew at a trend rate of 31 percent per year from 1966 to 1977 (Table 4), making soybeans the second largest crop in Brazil in terms of land use. Yields per hectare over the same period grew at a remarkable annual rate of 5 percent. As a consequence, output expanded from around 2 million MT in the early 1970s to a record crop of 12 million MT in 1977. Despite unfavorable conditions, output averaged almost 10 million MT in 1978 and 1979. Area planted in 1979-1980 was estimated at 8.6 million ha, bearing a record crop of about 15.2 million MT of soybeans. 1/ Brazil's share of world production increased from 9 percent of world output in 1970-74 to 14 percent in 1976-78. 161. Table 43 highlights the large increases in output and acreage devoted to soybean activity since 1969. 2/ The most rapid expansion occurred in the first half of the decade with slower rates of growth of output and acreage from 1975 to,1978 partly attributable to bad weather in 1977 and 1978. Table 44 shows the evolving regional pattern of production as soybean culture spread north from Rio Grande do Sul. Although the latter's output rose almost six times over the decade, its relative share of total soybean production fell from 70 to 45 percent. The geographical shift in production appears to have been an important source of rising productivity, as both Parana and Sao Paulo, the major new areas of production, have recorded higher average annual yields than Rio Grande do Sul. More recently, soybean culture has been spreading into the Center-West (campo cerrado), where a bumper crop was achieved in 1980. 162. Soybeans are primarily cultivated on medium and large holdings; some 62 percent of total soybean outDut is produced in holdings between 20 and 500 ha. In the case of Parana, the shift into soybean production du:ing the 1970s helped to alleviate the decline in rural incomes associated with the demise of coffee production in that state. However, the shift out of an unusually labor-intensive crop resulted in a net displacement of labor in rural Parana and a rise in the seasonal and nonresident labor force. 163. No special institution has been created to promote soybean cultiv- ation, as occurred in the cases of other major export crops, but soybean farmers have been major beneficiaries of the credit expansion, as noted in Chapter II, including storage credits under the minimum price program, even though the minimum price itself has had little apparent influence on producer decisions. The expansion of the EGF program in the 1970s was strongly cor- related with the increasing importance of soybeans. A major factor favoring at least informal preferential treatment of soybean growers was the 1973 U.S. embargo on soybean exports and the consequent "courting" of Brazil by importing countries seeking an alternate source of supply. 164. The average cost of soybean production in Brazil, relative to that of its major competitor, the United States, is shown in Table 45. The data refer to the crop year 1978-79. It appears that Brazilian farmers produce 1/ Present estimates suggest a harvest of 15-16 million MT in 1981. 2/ As noted in Chapter II, soybeans are commonly planted in conjunction with wheat, the latter grown as the off-season crop. A .t!r ,x s > W lA,. , ....... ,:^ ...... .. , + .... ,............. ..... .. ............... .. - 81 - Table 43: Soybean Output, Area Harvested and Yields, 1969-80 % Chg. % Chg. Area Harvested from Output from Ave. Yield Year (1,000 hectares) Prevy Year (l,Q0O MT) Prev. Year (kg/ha) 1969 906 25.5 1,057 61.4 1,166 1970 1,319 45.6 1,508 42.7 1,144 1971 1,716 30.1 2,077 37.7 1,210 1972 2,191 37.9 3,223 55.2 1,471 1973 3,615 65.0 5,012 55.5 1,386 1974 5,143 42.3 7,876 57.2 1,531 1975 5,824 13.2 9,893 25.6 1,698 1976 6,417 10.2 11,223 13.5 1,749 1977 7,070 10.2 12,513 11.5 1,769 1978 7,782 10.1 9,541 -23.8 1,225 1979 8,256 6.1 10,240 7.3 1,240 1980 8,600 '4,2 15,153 48.0 1,762 Sources: Appendix Tables 1.5a, 1.7a, c, d, 1.9a. p| Preliminary. - 82 - Table 44: Soybean Output and Yields by Major Producing State, 1969-78 Years 1969 1973 1975 1976 1977 1978 1. Rio Grande do Sul Output (1000 MT) 744.5 2,872.0 4,688.5 5,107.0 5,678.0 4,568.8 % of total 70.5 57.3 47.4 45.5 45.4 47.9 Yield (Kg/ha) 1,147 1,395 1,505 1,549 1,626 1,217 2. Parana Output (1000 MT) 213.6 1,326.0 3,624.9 4,500.0 4,700.0 3,150.1 % of total 20.2 26.5 36.6 40.1 37.6 33.0 Yield (Kg/ha) 1,239 1,622 2,221 2,160 2,136 1,341 3. Sao Paulo Output (1000 MT) 61.1 330.4 678.0 765.0 768.0 745.5 % of total 5.8 6.6 6.9 6.8 6.1 7.8 Yield (Kg/ha) 1,295 1,639 1,733 1,941 1,709 1,334 4. Sta. Catarina Output (1000 MT) 31.7 253.5 467.2 409.9 476.4 354.7 % of total 3.0 5.1 4.7 3.7 3.8 3.7 Yield (Kg/ha) 988 1,211 1,292 1,207 1,358 868 5. Mato Grosso Output (1000 MT) 3.4 103.2 272.6 290.4 695.2 479.1 % of total 0.3 2.1 2.6 2.6 5.6 5.0 Yield (Kg/ha) 1,077 1,195 1,403 1,519 1,687 959 Source: FIBGE and CFPF - 83 - Table 45.:. Comparative Costs of Soybean Production in U.S. and Brazil,' 1978-79 Crop Year U.S. Brazil Cost Items (Cr$) (Cr$) (1) (2) A. Variable Costs 1. Machines & Equipment $ 737 $ 672 2. Labor (temporary labor) 457 241 3. Inputs a) Seeds 350 525 b) Fertilizers 193 767 c) Defensive Chemicals 386 769 d) Corrective Chemicals 35 238 4. Transport - 161 5. Other Variable Costs - 70 6. "Caixa Media Vari.avel" 62 173 Total Variable Costs $2,220 $3,617 B. Fixed Costs 1. Depreciation (mach. & Equip.) $ 78i 427 2. Interest on Fixed Capital 293 141 3. Permanent Labor Costs 449 170 4. Land 2,029 937 5. Other Fixed Costs 365 15 6. "Caixa Media Fixa" - 36 Total Fixed Costs $3,315 $1,727 C. Ave. Total Costs (A&B) (Cr$/ha) $6,136 $5,343 D. Yield (kg/ha) 1,900 1,920 E. Unit Costs (Cr$/ton) 3,229 2.783 F. Commercialization Costs 138 1,100 G. Port Costs (Cr$/ton) 3,368 3,882 a/ Exchange rate Cr$ 17.16/US$ - April 1978. Source: USDA. - 84 - soybeans quite competitively with those of the United States as indicated by both unit costs and yield measures. With regard to on-farm costs, capital, land and labor all represent higher charges for U.S. farmers than for Brazilian farmers, whereas variable input costs associated with the adoption of modern technology (e.g., seeds, fertilizers and chemical sprays) are considerably higher in Brazil. A striking rise in Brazilian relative costs occurs at the marketing stages, i.e., transport, storage and port handling. Any present limits to the competitiveness of soybean production in Brazil apparently lie not at the farm level but rather at the marketing end of the process. 165. Another crude indication of Brazil's comparative advantage in soybean production is presented in Table 46, which shows the average producer price of soybeans in Brazil consistently well below the comparable U.S. price. The difference would be even greater if account were taken of the overvaluation of the cruzeiro during much of this period. 166. Domestic consumption. Even though soybeans developed as an export crop, they are now an important factor in domestic food supply. The consumption of edible oils, which has been subsidized through the setting of maximum prices, is growing at a rate of 8 percent per year and has become an important part of the diet of the low-income population. Current vegetable oil consump- tion is of the order of 11 kg per person per year and is 90 percent supplied by soybean oil, whose consumption in substitution of other oils has been growing at almost 28 percent per year. This per capita rate of consumption requires about 1.3 million MT of oil or the equivalent of 7 million MT of soybeans, i.e., some 50 percent of the 1979-80 crop. 167. The fast-growing poultry industry is also an important user of soy meal. An estimated 2.4 million MT of soy meal, requiring 3 million MT of beans, was consumed in 1980. The demand for meal has been expanding at a rate of about 20 percent per year. 168. Export performance and markets. Soybeans grew more rapidly than any other export during the post-1968 period, having been introduced into Brazil only a short time before. Table 47 illustrates the importance of soybean exports to total export performance in recent years. At the end of the 1960s, soy products still represented a small share of both total exports and total agriculture-based exports. By 1977, however, they had risen to almost 18 percent of total export earnings and 25 percent of agriculture-based exports. Soybean meal and oil combined accounted for 42 percent of all processed agricultural exports in 1977, as compared to only 5 percent a decade earlier. Viewed from a different angle, raw and processed soybeans accounted for 20 percent of the increment to total exports and 29 percent of the increment to agriculture-based exports between 1967 and 1977. 169. This extraordinary performance resulted in a rapidly increasing share for Brazil in world soybean trade, as summarized in Table 48. In a period of rapid increase in the world trade of soybean products, Brazil's relative share of the market increased in all three product categories. Its rapid expansion in the processed end of the market is particularly striking; Brazil now accounts for about one-half of all qoy meal trade and one-third of the soy oil market. Raw soybean exports fell sharply, both absolutely and relatively, after 1975, reflecting the emphasis given to the promotion of industrial capacity and exports. - 85 - Table 46: Producer Prices for Soybeans in Btazil and United States. 1970-78 Brazil USA Year Producer Rate of Producer Producer Relative Price Price Exchange Price Price Brazil/USA (Cr/NTf) (Cr/US$) (US$/t4T) (US$/WI) 1970 360.00 4.90 73.50 1971 476.70 5.30 89.90 111.3 .81 1972 561.70 5.98 93.90 160.5 .59 1973 986.70 6.10 161.70 208.7 .78 1974 1100.00 6r85 160.50 243.9 .66 1975 1233.30 8.28 148.90 180.7 .82 1976 1905.00 10.75 177.20 253.5 .70 1977 2701.70 14.20 190^20 216.0 .88 1978 3390.00 18.50 183.20 244.3 .75 Source: CFP, FVG, USDA. - 86 - Table 47: Share of .Soybeans in Total Exports and Ariculture-ased Exports. 1967-1980 Soybean Product Exports Soybean Product Exports as Year as percent of total percent of Agriculture- Exports based Exports 1967 2.4 2.9 1968 1.3 1.6 1969 2.3 2.7 1970 2.6 3.3 1971 3.7 5.0 1972 7.4 9.3 1973 15.3 19.5 1974 11.2 15.5 1975 15.0 22.8 1976 17.6 25.3 1977 17.7 24A8 1978 12.0 18.8 1979 10.8 18.1 1980 11.2 n.a. Source: Appendix Tables 2.1 and 2.3. - 87 - Table 48: Brazil's Share of World Trade in Soybean Products, 1970-78 (Percent) Year Beans Meal Oil 1970 2.9 12.5 -- 1971 2,2 18.2 -- 1972 9.5 28.0 4.5 1973 14.4 26.3 11.6 1974 19.7 29.2 1.2 1975 24.6 44.4 16.5 1976 22.7 46.2 31.0 1977 14.0 54.7 25.5 1978 3.1 46.6 32.9 Sources: CACEX; USDA; Oil World. - 88 - 170. By 1977 Brazil's soy meal exports were double its bean exports (in value terms) compared to an equivalent ratio of about one to four in United States exports. 1/ It is difficult to interpret this contrast as reflecting a differential comparative advantage. More likely it reflects the incentive given to building up processing activity to service Brazil's domestic market for soy oil and the general promotion of manufactured exports.2/ Incentives to the processors have included subsidized credit and the deduction of ICM and IPI value-added taxes for processed exports. In addition, farmers are subject to price controls and quotas to guarantee a supply of beans to local processors before they can export their remaining beans at the world market price. 171. Table 49 summarizes the allocation of total soybean production among domestic and foreign markets. Domestic consumption of soy oil apparently rose extremely rapidly from around 214,000 MT in 1970 to about 1.2 million MT in 1977 , a per capita growth of 25 percent per year. 3/ This rapid increase in demand in substitution of other vegetable oils is partly attributable to a consumer subsidy resulting-from price controls at the-retail,level.. The growing domestic market and the guaranteed supply of raw material inputs and other investment incentives stimulated large investments in processing facilities, and the industry is now generally understood to have substantial excess capacity. 172. Since 1975, there have also been significant increases in the amount of soy oil processed for export. A cursory analysis of the relevant price data, however, suggests that these oil exports and the related export of the by-product meal together may have generated less gross foreign exchange earn- ings than would have been earned by exporting the raw soybeans. Table 50 shows the average unit prices of soybeans, soy meal and soy oil from 1972 to 1980. In 1976, according to these data, a ton of soybeans exported in natura would have sold, on average, for just under US$217 (FOB, Rio Grande do Sul). Those same beans processed into meal and oil were valued at only US$211. This negative relationship existed also in 1977 and 1978. The above data do not take into account the additional costs oF soybean processing, and 1974 appears to be the only year in which those costs may have been covered by increased earnings from the processed products. 1/ In the poor-harvest year 1978, the value of Brazilian soy meal exports was about eight times its bean exports. 2/ For every ton of oil, roughly four tons of meal are produced as a by- product. Since cattle in Brazil are largely grass fed, the local soy meal market has been limited to feed for swine and poultry. 3/ It should be noted that local consumption has been calculated as a residual and is subject to considerable error. - 89 - Table 49: Export and Domestic Market Shares of Total Soybean Production 1970-78 Relative Shares (percent) Total Bean 'Output Domestic Marketb/ Export Market Year ('000 metric tons)Totl Qj=LgA/ Meal Oil Beans Meal Oil 1970 1,508 100.0 9.8 22.0 14.2 19.2 34.8 0.0 1971 2,077 100.0 10.3 23.1 16.0 9.6 41.0 0.0 1972 3,223- - 100.0 9.1 3.4 11.7 '32.2 43.6 0.0 1973 5,012 100.0 8.9 12.8 9.9 35.6 31.6 1.2 1974 7,876 100.0 9.0 19.3 11.2 34.7 25.8 0.0 1975 9,893 100.0' 8.9 14.2 8.8 33.7 31;7 2.7 1976 11,223 100.0 9.1 8.0 7.7 32.4 38.8 4.0 1977 12,513 100.0 12.3 11.0 9..5 20.7 42.6 3.9 1978 9,541 100.0 10.3 10.6 11.6 6.8 55.7 5.0 Notes: a/ "Others" consists of that part of bean production kept for seeds; estimates of marketing and processing losses and local production of the additive lecithin. b/ Data for the domestic market are derived as a residual (i.e.. the total amount processed minus meal and oil exports), Technical coefficients used to determine the mix of total output derived from domestic processing: meal output represents 76 percent of total crushed beans and oil 19 percent. Source: FIBGE; CFP; CACEX. - 90 - lable 50: Average Annual Export Prices of Soybean Products 1972-1980 (US dollars per metric ton) Bean Equivalent Years Beans Meal Oil of Bran and Oil a/ 1972 123.33 108.62 266.67 132.97 1973 276.66 268.04 387.70 278.12 1974 214.72 149.24 830.04 268.47 1975 205.47 148.67 579.22 221.63 1976 216.66 181.75 385.62 211.29 1977 274.31 215.00 562.81 269.67 1978 257.97 193.78 580.45 256.59 1979 281,15 219,88 625,61 285.05 1980 254.33 220.15 565.98 274.22 a/ Calculated as 0.77 Pm + 0,185 PO, in accordance with estimated average yields of sQyme-al and soy oil, respectively, from a ton of soybeans. Source; CACEX; mission estiliates. - 91 - 173. It appears, therefore, that the incentive structure in place through 1980, including price controls on local soy oil consujmption, credit subsidies and tax exemptions to the processing industries and quota restrictions on raw soybean exports, has resulted in an uneconomic diversion of resources into the processing end of the soybean sector, a net loss of foreign exchange earnings, and a reduction of the incomes of soybean farmers. These conclu- sions do not allow for the offsetting effects of credit and other subsidies received by soybean farmers, the possibility that additional Brazilian raw soybean exports might depress the world market price, or for the differential future world market prospects of beans, meal, and oil. They do suggest, however, the urgent need to review the confusing and frequently contradictory multiplicity of objectives being pursued by fore'ign trade and agricultural polizies to clarify Brazil's current priorities and the most efficient means of achieving them. - 92 - Chapter IV: Sugar and the Alcohol Program A. Sugar Production and Export Performance i AL, .ia ,1 , .1 - ...I.... ** , - a.. j., ai . -. .. A AS A .. iI 174. Brazil has long been one of the world's major producers of sugar, accounting in recent years for about 9 percent of world production from all sources and ranking first among cane producers. Table 51 shows the 19-fold increase in Brazil's export earning from sugar products, from US$70 million in the mid-1960s to' $1.3 billion in 1974. Tne sharfe o-f'sugar eiports in total export earnings rose from 4 to almost 17 percent"over't1ii's'period (Table 52). A rapid rise in world sugar prices through the first'half.'of the 1970s, particularly in 1974 and 1975, was the principal factor behind this jump in earnings, but the supply response was also substantial, quantum exports rising from an average of about 800,000 MT in the mid-1960s to almost 2 million MT by 1973, a 3.5-fold increase in seven years. 175. Export earnings fell sharply in the second half of the 1970s as a consequence of the abrupt decline in world prices and, to a lesser extent, in the quantum exported. The falling export-volume was the result partly of bad weather and partly the increasing allocation of cane to the production of alcohol to substitute for gasoline. The world sugar price more than doubled in 1980 and, combined with a sharp increase in the export of refined sugars, brought exports back up to the US$1.3 billion level. In 3hort, the large swings evident in sugar export receipts have been principally the consequence of price volatility, but export volumes have also shown a significant supply response to changing economic opportunities. 176. Another feature of the export performance of sugar, paralleling the findings for the other major export:crops during this period, was the rapid shift from crude or "demerara" sugar exports to the various forms of refined sugar. Up to 1970 refined products constituted, at most, only one percent of th-. total value or quantum of sugar .exports. By the end of the 1970s this share averaged over 40 percent of value and an almost equal propor- tion of export volume. A large part of the rise in export earnings from sugar up to 1974-75 was related to the shift into refined products. 177. Table 53 highlights the recent expansion of cane area and production in Sao Paulo, the principal producing state. Since the early 1970s land planted to cane in Sao Paulo increased 50 percent, and the harvest of raw cane rose from 42 to 66 million MT. This expansion was associated with significant increases in average yields. Although so rapid a growth rate would probably not have been justified in terms of the international market, a substantial share of the sugar produced in Brazil is consumed domestically. 178. As shown in Table 54, cane growers in the Center-South, and in particular Sao Paulo, enjoy substantially higher 'average yields per hectare than in the Northeast. On the average %he Center-South record's yields almost 40 percent higher than the Northeast. With the exceptions of the 1975-76 crop year in the Center-South and 1976-77 in the Northeast, there has been a steady increase in yields.in the South from the early 1960s to,,the present., ,alongside relatively constant yields over this' period in the Northeast. Table 51! Sugar Export Earnings, Quantum Exported-and nnual ort Prices, a964L-8 to 1980 Value (U.S. $ millions)1 Quantity (1,000 MT) Annual Average Price (U.S. $ per Ton) Year Demerara Refined Total- Demerara Refined Total Demerara Refined Total 1964-8 69.6 0.5 70.1 798 .8 10.0 808.8 87.13 53.76 86.72 1969 115.0 - 115.0 1,099.0 - 1,099.0 104.68 - 104.68 1970 126.5 0.1 126.6 1,125.2 1.0 1.126.2 112.45 120.00 . 112.46 1971 146.6 6.4 153.0 1,190.6 70.7 1.261.2 123.10 90.53 121.29 1972 314.1 89.4 403.5 2,054.5 480.5 2,534.9 152.91 186.07 159.19 1973 454.9 103.8 558.7 2,353.6 466.4 2,820.0 193.26 222.56 198.12 1974 978.3 343.6 1,321.9 1,767.4 589.3 2,356.7 553.53 583.41 560.85 1975 769.9 329.9 1.099.8 1,235.1 495.7 1,730.8 623.34 665.06 ; 635.34 s 1976 152.5 154.1 306.5 600.8 566.5 1,167.3 253.79 272.20 262.67 1977 276.5 186.2 462.7 1,536.2 918.4 2.454.6 180.01 202.80 188.47 1978 195.9 154.1 350.1 1,164.0 797.5 1,961.5 168.32 193.39 T 178.51 1979 247.0 116.8 363.8 1,282.9 546.4 1,829.2 192.54 213.76 > 198.88 1980 624.5. 663.3 1,287.8 1,382.0 1,180.8 2,562.8 451.87 561.74 502.50 a/ Excludes inedible molasses. Source: Appendix Tables 2.3 and 2.4. - 94 - Table 52:. Relative Shares of-Crude and Ref'ned Sugar in Total SugAt 'Expc6tts ad dShare'of'StugAt 'it"T&tal1 -Exportt_,-'1l964-68 to 1980 Percent of Sugar Export Value Sugar Exports as Percent Year Demerara Refined of Total Exports 1964-8 99 1 4.2 1969 100 0 5.0 1970 99 . 1 4.6 1971 96 4 5.3 1972 78 22 10.1 1973 82 18 8.9 1974 74 26 16.6 1975 70 30 12.7 1976 49 51 3.0 1977 60 40 398 1978 56 44 2.8 1979 68 32 2.4 1980 48 52 6.4 Source: Appendix Tables 2.1 and 2.3. - 95 - Table 53: Area Planted. Production and Yields for Sugar Cane in the State of Sao Paulo, 1971/72 to 1978/79 Area Raw Cane Planted Production Yields. Harvest Year (1,000 ha) (1.000 memtric tons) (lT per hectare) 1971/72 759.0 42,300 55.7 1972/73 740.0 40,000 54,0 1973/74 790.0 34,000 43.0 1974/75 802.0 35,600 44,4 1975/76 932.0 47,500 64.1 1976/77 1,011.0 55,300 66e3 1977/78 1,146.5 58,070 64,9 1978/79 1,153.4 65,920 69,7 Source: Instituto do Economia Agricola, Prognostico,79/80, Sao Paulo, p. 112. - 96 - Table 54:. Comparative Yields of Sugar Production in the Center-South and the North-Northeast. 1961-77 (Metric tons per ha) Harvest Year Center-South North-Northeast 1961/62 59.4 1962/63 59.8 - 1966/67 61.9 45.7 1967/68 62.0 46.0 1970/71 62.6 45.9 1971/72 64.0 46.6 1972/73 63.7 47.3 1973/74 62.9 47.2 1974/75 63.7 47.0 1975/76 56.0 44.4 1976/77 62.2 57.1 Source: Ministry of Agriculture, SUPLAN. - 97 - B. Alcohol Production in Brazil 179. Brazil has long produced alcohol as a spin-off from its substantial sugar industry. Molasses has been the primary feedstock for alcohol production. Annual production of alcohol in the early 1970s averaged about 650 million liters per year (Table 55) with installed distilling capacity abouit double this production level. High world sugar prices were largely responsible for the low production of alcohol. In 1975 a National Alcohol Program (PROALCOOL) was established with the objective of partially replacing gasoline. The feasibility of diesel and fuel oil substitution and the expanded use of alcohol as a chemical feedstock are also being studied. New distilleries, production incentives, and low world sugar prices combined tc raise alcohol production almost sixfold between 1975 and 1979. 180. The alcohol plan to 1985. The alcohol production target for 1985 is 10.7 billion liters, of which 9.2 billion would substitute for gasoline, and 1.5 billion would be used as'chemical feedstock. Of the 9.2 billion liters that is to substitute for gasoline, 2.7 billion, or 29 percent, is to be produced as anhydrous alcohol and blended with gasoline at a ratio of up to 20 percent. This amount will be produced in existing distilleries, mostly in combination with sugar mills. The remaining 71 percent is to be produced as hydrous alcohol, which cannot be used in combination with gasoline and hence requires engines adapted to 100-percent alcohol. The above production ratios are considered flexible and can be modified depending on the relative prices of alcohol, gasoline, and sugar, and the availability of alcohol engines. 181. The 10.7 billion liter target for 1985 represents a tripling of the 1979 production level. To achieve this target, additional land area for both sugar and alcohol production must be brought under sugarcane. 1/ The initial plan estimated the needed land expansion (sugarcane and manioc) at 1.4 million hectares (Table 56), as compared to about 900,000 ha producing cane for alcohol in 1979. This estimate assumes productivity increases in both sugarcane production and processing. Sugarcane yields are assumed to increase from a current level of 55 tons to 60 tons per hectare on existing plantations (new areas are estimated at 50 tons per hectare), and processing efficiency from 70 to 80 liters of alcohol per ton of cane. These combined productivity increases would result in an increase in alcohol production per hectare of 25 percent over 1979/80 levels (from 3,850 to 4,800 liters per hectare), for existing plantations (Table 57). 1/ The target plan calls for 95 percent of the 1985 alcohol production to come from sugarcane and 5 percent from manioc. Problems in implementing a manioc-based program make the 5 percent estimate appear overly optimis- tic at this time. - 98 - Table 55: Alcohol Production by type, 1967-1979 (Millions of liters) Year Hydrous Anhydrous Total 1967-69 (ave.) 340.8 234.0 574.8 1971-73 (ave.) 282.7 371.2 653.8 1975 359.8 220.3 580.1 1976 369.8 272.4 642.2 1977 297.7 1087.9 1385.6 1978 392.6 1943.5 2336.1 1979 618.2 2832.0 3450.2 Source: FIBGE. - 99 - Table 56. Estimated Additional Land Needed to Meet 1985 Sugar and Alcohol Targets Alcohol Land Production Required (Billion Liters) (1,000 hectares) Sugar Production 1985a/ 96 million tons of cane -- 1,600 Alcohol Production from Sugarcane 1985 Residual production (molasses)b/ 1.44 -- Direct Production Existing cane areasc/ 3.36 700 Expansion-existing plantations.S/ 2.20 460 Expansion-new plantationsd/ 2.80 700 TOTAL - sugar cane 9.80 3,460 From Manioc.e/ .9 225 Total initial 1985 target 10.7 3,685 Present sugar cane area 2,300 New area needed 1,385 a/ 1985 sugar demand estimated at 9.6 million tons (7.2 internal and 2.4 export). Assumes production of 60 tons of sugar cane per hectare and 100 kg sugar per ton of sugar cane. b| Assumes 15 liters per ton of sugar cane. c/ Yield estimate of 4,800 liters per hectare based on 60 tons of cane per hectare and 80 liters of alcohol per ton. d/ Yield estimate of 4,000 liters per hectare based on 50 tons of cane per hectare and 80 liters of alcohol per ton. e/ Yield estimate of 4,000 liters per hectare based on 25 tons of manioc per hectare and 160 liters of alcohol per ton. Source: PROALCOOL, September 1979. - 100 - Table 57: Yield Levels iJ6Ted to Assess Land 'Requirements of 1985 Suear and Alcohol Ptoduction Targets 1979/80 Mission Proalcool Productivity Estimate 1985 Levels 1.985 Projections Sugar Cane Sugar cane per hectare 46,a/tons 50 tons 60 (estab- lished areas) 50 (new areas) Sugar per tcn of cane 92 Kg 95 Kg 100 Kg Sugar per hectare 4.23 tons 4.75 tons 6 tons Residual alcohol per ton of cane 12 liters 13 liters 15 liters Direct alcohol per ton of cane 70 liters 70 liters 80 liters Alcohol per hectare: Residual 552 liters. 650 liters 900 liters 750 liters Direct 3220 liters 3500 liters 4800 liters 4000 liters Manioc Manioc per hectare 12.5 t6ns 15 tons 25 tons Alcohol per ton 160 liters 160, liters 160 liters Alcohol per hectare 2000 liters 2400 liters 4000 liters a/ Based on commercial yields of 65 and 55 tons per hectare harvested in the Center- South and Northeast (60 and 40 percent of production, respectively), with 75 percent of the land harvested each year. - 101 - 182. These productivity assumptions appear quite optimistic, inasmuch as a substantial portion of the incremental output will come from new land and under new management. Land needs were also underestimated by failure to include the 20-25 percent of total area under cane that is not harvested during the planting year of the crop's normal four-year cycle. Early results from new cane areas in western Sao Paulo and northern Parana, however, are demonstrating good yields. On the basis of these results, and stepped up research and development efforts on regionally adapted varieties and other cultural practices, it appears that modest productivity gains of about 8-9 percent by 1985 are possible. New land requirements to meet 1985 production targets would thus be on the order of 2.2 million hectares over and above the 1979 level 1/ (Table 58). (If productivity were to continue at present levels, then new land requirements would be on the order of 2.7 million hectares.) 183. The new land area for sugarcane production will come from a combina- tion of the expansion of area by existing sugar mills, new projects already approved and projects yet to be approved. Brazilian estimates in 1979 were that land availability and hauling distance limitations would restrict the expansion of the area of existing mills to 460,000 ha. This component of total expansion was expected to be the easiest, inasmuch as management and most of the infrastructure investments were already in place. The additional 700,000 ha would come from new projects already approved and expected to be implemented shortly. These two sources together (1.16 million ha) would provide slightly more than one-half of the additional land estimated here to be needed to reach the 10.7 billion liter target. The remaining one million hectares to be brought under sugarcane (and/or manioc), if 1985 targets are to be met, was still to be planned. 2/ 1/ Of this, about 400,000 ha were added to production in 1980. 2/ By mid-1980, expansion had occurred in about two-thirds of the existing mill area, and another 100,000 ha of projects were approved, leaving 850,000 ha yet to be planned. Table 58: Additional Land Needed to Meet 1985 Sugar and Alcohol Targets--Based on Sugarcane as the Basic Feedstock with Three Estimate Levels Using Current (1979/80) Productivity and Mission and Proalcool Productivity Estimates for 1985a7 Land Requirements (1,000 hectares) Sugar Alcohol 1979/80 1985 Production Production Productivity Mission Proalcool Item (million tons) 109 Liters Levels Estimate Estimate Sugar Production-1985 9.6 2,280 2,030 1,610 Production-1979/80 6.6 (1,560) Net addition 3.0 720 470 50 Alcohol Production-1979/80 .8 Residual 3.0 (930) Direct 3.8 1985 Target Residual 1.26 (1.32) (1.44) Direct 9.44 2,930 (9.38) 2,680 9.26 2,050 10.7 (10.7) (10.7) Total land area 1985 5,210 4,710 3,660 - Total land area 1979/80 2.490 2,490 2.490 Total Net Addition 1985 2,720 2,220 1,170 a/ See Table 53 for specific productivity assumptions. - 103 - 184. This is a significant quantity, particularly since lead times of several years are required to bring sugarcane into production. Harvest is only possible at the end of the second year following planting, and four years are needed for complete use of the total land area. If the land must first be cleared, an additional year is added to the initiation schedule (Appendix Table 8.6). Therefore, about 500,000 ha of new sugarcane production must be established each year to meet the 10.7 billion liter alcohol target; this is more than triple the 1976-79 annual expansion of sugar land but well below the experience of soybeans. 185. Expansion thus far has occurred principally in and near the tradi- tional sugarcane production areas of the Center-South and Northeast. Pressure will be strong to continue expansion in these traditional areas, though approval of new projects is to be based partly on proximity to liquid fuel consumption areas and an effort to avoid displacement of land use from food and export crops. It is likely that overproduction of alcohol relative to local demand and some crop substitution will occur in Sao Paulo. The Northeast will also produce an alcohol surplus. The extreme South and other regions will be net importers of alcohol. 186. Regional liquid fuel needs and alcohol production possibilities. A regional and state breakdown of gasoline use and sugarcane, manioc, and alcohol production is presented in Appendix Table 8.7. 1' The Southeast region, and principally the state of Sao Paulo, produces about 60 percent of sugarcane and alcohol and consumes 60 percent of liquid fuel. Indeed, since alcohol production in Parana occurs in the extreme north of the state, on the border with Sao Paulo and the southern extremity of the commercial sugarcane area, about three-quarters of alcohol production can be attributed to the greater Sao Paulo area. The Northeast accounts for almost 40 percent of sugarcane production and 23 percent of alcohol, but only 13 percent of gasoline consumption. Thus the Northeast also produces a surplus of alcohol relative to regional demand. The major alcohol deficient areas are the southern states of Santa Catarina and Rio Grande do Sul (11 percent of gasoline consumption and no alcohol production) and the Center-West (with 7 percent of gasoline consumption and 2 percent of alcohol production). The North produces and consumes very little liquid fuel. 187. The major reason for the concentration of alcohol in the Southeast and Northeast, of course, is the location of the sugar industry, which has been developed for the specific conditions of these regions and has continued there in part through a quota-subsidy system. The challenge is to look beyond the existing system to incorporate alcohol deficient areas into the alcohol 1/ Gasoline, fuel oil and diesel are produced and consumed in approximately equal quantities in Brazil, and regional distributions are similar. Therefore, gasoline provides a reasonable proxy for describing the geographical distribution of liquid fuels generally. Although the above discussion focusses on the effort to substitute for gasoline use, substantial research is also being carried out in Brazil to develop agricultural substitutes for diesel oil. Various palm and vegetable oils are being tested. - 104 - plan and to define more clearly the economic and other trade-offs in terms of transportation costs, food production, resource use, and regional income and employment impacts. Anmong other issues, this review should include consideration of alternative energy crops, such as manioc, wood and sweet sorghum, that are more widely adapted to regional soil, moisture and climate conditions; the adaptation of sugarcane varieties to new areas; the development of processing plants of different scale to reflect the supply characteristics of different crops and regions; and the coordination of processing plant scale and design to incorporate varying feedstock sources in combination in order to allow a longer processing season. 188. Of the alternative crops, manioc is now widely grown in Brazil (see Annex), typically in poorer and small-farm agricultural areas outside of the greater Sao Paulo region. The Northeast and South are the major producing areas. Manioc can be harvested year-round in some areas or chipped, dried and stored for off-season processing. It can be grown under a wide range of soil and moisture conditions. For making alcohol, it requires a separate heat source which varies by region (coal, surplus bagasse, wood, etc.). Since manioc is grown principally as a subsistence crop on small plots and with little improved technology, the potential productivity under commer- cial conditions is unknown. Experimental work in Brazil and elsewhere, however, suggests that substantial increases over current Brazilian productivity levels are possible. 189. The probable expansion areas in which manioc can serve as a principal energy feedstock are the Northeast (in the agreste or semi-arid region), the Center-West on the cerrado soils where productivity is presently quite low, and the South where considerable manioc is now produced on small farms. It is unlikely that manioc will compete successfully with sugarcane as an energy feedstock in traditional sugar areas in the near future. The North can produce both sugarcane and manioc, but its liquid fuel market is small. 190. Within each region, specific systems can be developed. For example, in the Northeast the agreste and sugarcane areas are in close proximity to one another. In the agreste zone the farms are small, and manioc is probably the least risky crop enterprise. Lack of market is the principal factor limiting production. In the sugar zone of the Northeast farms are medium to large and to some extent use migrant labor from the agreste during sugar harvest. Sugar mills are limited to about six months' operation because of the seasonality of the harvest. A mutually beneficial system might be developed including manioc production, chipping and drying on the small farms of the agreste for use by distilleries in the sugar zone during the off-season. Drying of manioc chips would not only lengthen the processing season but would also allow procurement to extend over a larger geographical area and make use of excess sugarcane bagasse as an energy source for the processing industry. 191. Combinations with sweet sorghum and manioc totally within the semi- arid zone, small manioc distilleries alone, and sorghum-cane combinations also appear to be possibilities worth further exploration and development. Given the resource possibilities for producing alcohol and the relatively small demand for liquid fuel in the Northeast, it may be desirable to phase in 100-percent alcohol cars in this region first. Another possibility would be to produce more sugar and less alcohol, letting the growth in sugar demand, especially for export, be served by the Northeast. - 105 - 192. In the South, yields of sugarcane on mountain farms along the coast (small plots of 4-5 ha) have been equal to Sao Paulo yields when produced commercially. itanioc is also produced on farms in this region. Perhaps smaller-scale distilleries, using one or both of these crops in combination, could provide an alternative for bringing alcohol production to this currently deficit area. Costs of production need not be equally low in all regions; the difference in costs must only be less than the cost of alcohol transport between the surplus and deficit regions. 193. From a planning perspective, a regional approach has some added cost. One simple production-processing technology (i.e., large-scale sugar- cane distilling) will tnot suffice. Resources must be allocated to research and development rather than almost exclusively to the expansion of existing technologies. Lead times will thus be longer and results somewhat slower. However, regional income disparities, which are likely to be increased by the present focus of the aleohol plan, could be lessened, pressure on food crop production could be more evenly distributed, and incomes and employment in the poorer agricultural areas could be increased. C. Food-Energy Crop Competition for Land 194. Brazil has one of the more favorable man-land ratios in the world. Yet, even at current alcohol production levels, concerns are being raised regarding the impact of the alcohol plan on land use, particularly the substi- tution for food crops. Two characteristics of the present sugar industry prompt this concern: the scale of individual enterprises which absorb almost all land within the proximity of the mill into sugarcane production, and the geographical locations of the principal sugarcane-producing areas, namely the state of Sao Paulo, where the expansion of sugarcane production is proceeding into major food producing areas and raising concerns about food availabilities and prices, and the Northeast where it is feared that many small farmers may be displaced by the further spread of sugar culture. As noted in Chapter I, the national production of some basic food crops (beans, manioc, rice) has lagged significantly behind population growth in recent years. 195. While the food-alcohol question is serious and must be considered as part of the total evaluation of the viability of the alcohol plan, one must be careful not to constrain the analysis within the context of current land use. Clearly, if major increased demands are put on the land resource, some adjustments will be required. These potential adjustments must be viewed within the totality of land use and availability, and within the poten- tial for expansion of land use at both the intensive and extensive margins. A thorough analysis of these issues is beyond the scope of this report; however, some perspective can be gained from looking at potential energy crop needs, land availability, and recent changes in land use. 196. First, some assessment of the full potential substitution of alcohol for petroleum products can be made. Brazil used approximately 50 billion liters of petroleum derivatives in 1978. Assuming that 80 percent of petroleum is imported, that alcohol could substitute for all imported petroleum, and using Brazilian estimated substitution rates of 1.1 liters of alcohol per liter of gasoline, the upper limit for alcohol production would be 44 billion - 106 - liters. At an estimated alcohol yield of 3,500 liters per ha, about 12.6 million ha would be required. (Using Brazilian estimates of alcohol yield for new areas -- 4,000 liters/ha -- would give a land requirement of 11 million ha.) A comparison of these upper-limit estimates with the present 1985 targeted land needs of 3.1 million ha is shown in Table 59. Growth in liquid fuel demand and improvements in alcohol yield per ha will change these esti- mates somewhat. However, they do provide some order of magnitude of the land needs to be matched against competing food crop needs and total land availability. 197. Land use in Brazil is relatively extensive as shown in Table 60. The 1975 Agricultural Census indicated a total. of about 324 million ha in farm establishments, with 40 million ha in crops. Given the expansion occur- ring in the second half of the decade, particularly of soybeans and sugar, it seems reasonable to assume that the 1979 area of land under crops was of the order of 46 million ha. 1/ Of this, about 2.5 million ha, or about 5.4 percent, was already dedicated to sugarcane. To meet the 1985 target will require 4.8 percent, approximately, of the 1979 cropped area (para. 182) and, if all imported petroleum at 1978 levels were to be substituted for by alcohol, the land need would be increased to slightly greater than one-fourth of the land now under crops. 198. Land substitution of this magnitude would have a serious impact on food production, if the land base were constrained to the 46 million ha now used. However, as noted in Table 60, a total of 166 million additional ha was being used in 1975 for pasture, of which 40 million ha was planted. 2/ An important question is how much of the area under pasture is suitable for more intensive cultivation, either for energy crops or for the food or export crops displaced by energy crops. Over much of the semi-arid portions of Brazil, the pasture land is certainly not suited for intensive crop production. However, in Sao Paulo, where some 30 percent of the alcohol capacity so far approved occurs and the food-alcohol issue is now seriously joined, substantial crop-pasture substitution can occur. Because of data availability and the urgency of the issue in Sao Paulo, this state is used to evaluate the substitu- tion question. It must be recognized, however, that Sao Paulo conditions cannot be generalized to all of Brazil. (The quite different conditions and problems of the Northeast, from which a third of the additional alcohol production is expected to come, are not discussed in this report.) 199. Land use in the state of Sao Paulo. At the national level, the ratio of land under crops to total agricultural land is one to five. In Sao Paulo the ratio is one to three. That is, of all land farmed in Sao Paulo, one-third is used for crops and two-thirds for pasture (Table 61). In addition, 70 percent of the pasture land (46 percent of land farmed) is "seeded" or improved pasture, indicating that the land has been cultivated. 1/ The area totals shown in Appendix Table 1.5a are for area harvested, which is presumably less than area cultivated. On the other hand, the totals given there also involve some double-counting of intertilled and multiple-cropped lands. 2/ Not quantified here, but said to number in the tens of millions of hectares, are the fertile soils as yet unexploited for any agricultural use found in Brazil's many flood plains (varzeas). - 107- Table 59: Projected Land Needs of Alternative Levels of Alcohol Demand Level of Demand (billion liters) Hectares Needed (millions) 1985 Target 10.7 a. 3500 liters/hectare 3.1 100% subst'tution of 1978 imported petroleum4-' 44 a. 3500 liters/hectare 12.6 44 a. 4000 liters/hectare .11.0 a/ Estimated at 40 billion liters of petroleum derivatives to be substituted for by 44 billion liters of alcohol. - 108 - Table 60: Land Use Patterns, 1970 and 1975 (Millions of hectares) Land Use 1970 1975 Total farm area 294.1 323.9 Total cropland 34.0 40.0 Temporary crops (26.0) (31.6) Permanent crops (8.0) (8.4) Pasture 165.7 Planted (39.7) Natural (126.0) Source: FIBGE - 109 - Table 61: Land Use in Sao Paulo by Major Regions, 1978 (Thousands of hectares) Region of State Land North South South Total Use Central Western Central East State Percent Area well adapted to sugar cane 1,823 3,390 1,549 104 6,866 19.78 Land Use Sugar cane 802 68 215 58 1,143 7 Export and industrial cropsaf - 728 554 476 112 1,870 11 Food crops!b 183 267 147 417 1,014 6 Other crops Corn 301 294 135 242 972 6 Oranges 263 53 5 13 33.4 2 Other 26 33 12 22 93 1 TOTAL CROPS 2,303 1,269 990 864 5,426 (33) Seeded pasture 1,224 4,228 1,181 976 7,609 46 TOTAL LAND CULTIVATED 3,527 5,497 2,171 1,840 13,035 (79) Natural pasture 957 451 342 1,632 3,382 21 TOTAL LAND FARMED 4,484 5,948 2,513 3,472 16,417 100 a/Coffee, soybeans, cottonI h/Rice, beans, cassava, peanuts Source: Secretaria da Industria, Comercio, Ciencia e Tecnologia, "Rezoneamento das Areas para Implantagao de Distilarias," Sao Paulo, 1979; CEFER/IPT, "Substituirao e Deslocumento de Culturas no Estadcl de Sao Paulo," Sao Paulo. - 110 - Sugarcane occupies 7 percent, and the traditional food crops of rice, beans, manioc and peanuts account for 6 percent of the land farmed. The western part of the state has more than one-half of the seeded pasture and about one-half of the land well adapted for cane production. Much of this land is suitable for either food crops, sugarcane or pasture. Cane production is currently concentrated in the north-central region, as are the other commercial export crops, and corn and oranges. Food crops fare less well in the north-central region. The Southeast is less well adapted to sugar and export crops, with most land devoted to food crops and corn. 200. The data presented in Table 61 show that the state's generally excellent land base, especially in the northern and western regions, tends to be more intensively farmed near the Sao Paulo city market. On this good land higher-valued commercial export and industrial crops predominate. Lower-valued food crop production and more extensive cattle production is carried out on poorer land near Sao Paulo city and on the more distant but good land in the western part of the state. This would suggest that considerable latitude exists for increased productivity at the intensive margin, especially in the western part of the state. This land could be put in sugarcane for alcohol production or in food or export crops displaced from other regions. It is likely that cattle production would shift out of Sao Paulo as a consequence of greater intensity of land use, moving into areas of Goias, Mato Grosso, and Minas Gerais. 201. Were food crops displaced from eastern to western Sao Paulo, some increase in food crop prices would result. However, in the near term these increases should not be much greater than the additional transportation cost of bringing the crops from the western part of the state. Therefore, studies which have assumed a one-to-one exchange of food crop land for sugarcane land have failed to take account of the regional production of each commodity and the potential for expansion at the intensive margin in all crop production. In any event, the Government's present policy is to direct new sugar plantings to the western part of the state, minimizing the disruption of the food-producing area. The impact on food production in the major sugar area of the Southeast is, therefore, not expected to be a serious problem, at least with regard to the 1985 alcohol target. The trade-offs beyond 1985, however, are likely to be more difficult, unless significant improvements in technology, permitting the use of alternate feedstocks, are forthcoming. On the otner hand, solution of the technical problems could result in a desirable dispersion of the program's impact with positive consequences for employment and regional income distri- bution. 202. Ownership concentration. A second land-use question frequently raised in conjunction with sugarcane-based alcohol production is the problem of concentration of land ownership associated with large distilleries. The industry has tended to be vertically integrated in Brazil with the mills controlling the sugar lands serving them. 1/ The industry has 1/ Although sugar mills are required by law to purchase half of their cane from private growers, in 1977-78 only 14 percent was so purchased. become more concentrated, moreover, as the number of mills has declined over the past decade and a half despite the substantial growth of output. Data do not exist to judge the effect of the alcohol program on land ownership thus far, but information available for 1970-75 suggests that production increases resulted from the intensification of cultivation within medium and large farms rather than from an expansion of their size or numbers. Nevertheless, the potential social impact, particularly at the regional level, of a program of this magnitude is considerable and deserves careful monitoring. Technological developments of the type described in paras 189-192 could offer positive benefits in this regard. - 112 - Chapter V - Summary of Major Recommendations A. Overview 203. Through much of the post-World War II period, agriculture has been viewed in Brazil and elsewhere as a sector to be exploited, a source of financing and inputs to the primary strategic objective of industrial develop- ment. The policies designed to accomplish this latter objective and to achieve the desired inter-sectoral resource transfers have included, inter alia, an overvalued exchange rate, price controls, export taxes and quotas on unpro- cessed goods, and tariff protection to domestic industries. Despite the resulting disincentives to agricultural production, the sector has, as a whole, performed well over the decades. With the growth of sectoral value added averaging about 4.5 percent per year, agriculture has been the economy's primary earner of foreign exchange at the same time that it has provided raw materials, foodstuffs, savings and labor to urban industry. 204. More recently, agriculture has been called upon, in addition to its traditional developmental role, to make a major contribution, through the creation of energy-producing biomass, to reducing Brazil's heavy dependence on imported petroleum. This added responsibility and the inflationary and balance-of-payments consequences of a succession of weather-related poor harvests have brought a renewed appreciation for the importance of agricul- ture in its own right. This has been accompanied by growing criticism that, although the sector's aggregate performance may have been satisfactory, the composition of sectoral output has been distorted by policies introduced over time which have caused a shift in land use in favor of industrial and export crops to the detriment of domestic food crop production. Finally, past agricultural growth has depended almost entirely on the expansion of land under cultivation, racher than on improved yields, and concern is rising that declining soil fertility at the frontier and the rising costs of transport make this an increasingly expensive alternative, and that more attention, therefore, must be given to raising productivity at the "intensive frontier." 205. While the findings of this policy review confirm the view that agricultural policies have tended to skew production incentives in favor of certain crops, several important caveats must be made to the common dichotomy drawn between industrial-export crops and domestic food crops. In the first place, although the aggregate output of those crops commonly designated in the industrial and export category did grow significantly more rapidly than domestic food crops after the mid-1960s, the difference is due almost entirely to soybeans; with soybeans removed from the index, the combined output growth of the remaining industrial-export crops has been virtually nil. Similarly, soybeans account for all of the net increase in land use; the land devoted to other export and industrial crops combined actually declined. 206. The fragility of the simple distinction made between export crops and domestic food crops must also be noted. All of the crops commonly credited to the export category are also consumed in large amounts in the domestic market. One source of growth of soybean production in Brazil, for example, has been the rapid domestic market expansion stimulated by subsidies to the consumers and manufacturers of soy oil. Moreover, the expansion of soybean - 113 - cultivation has been directly associated with the parallel expansion of land devoted to wheat, a major dormestic food crop, whose production and consumption have both been heavily subsidized by government policies over the past two decades. The recent expansion of sugarcane, conventionally treated as an export crop, has in large part been for the purpose of substitution for imported petroleum. 207. Nevertheless, a useful dichotomy can be drawn between: (1) a subset of crops -- primarily grains and crops entering significantly into international trade -- which have been heavily favored by credit subsidies and other public policies; and (2) the remaining crops -- typically, non-traded domestic food crops -- whose lack of government support and low price-elasticities of demand are reflected in a distinctly lower level of technology and poor growth performance. These latter crops, including most importantly black beans and manioc, are grown by large numbers of widely scattered small farmers and form an important part of the diets of the urban and rural low-income groups. The favored farmers of the first category, in contrast, are concentrated in the South and Southeast of Brazil, are well organized, served by a well developed and integrated infrastructure, and are supported by both private and public specialized institutions. B. Agricultural Policies 208. The import-substitution industrialization policies outlined above established a general framework of discrimination against agriculture. The intrasectoral distortions referred to have arisen in part from historical inertia and the structures left behind by a long succession of export booms, and in part from the agricultural policies introduced to "compensate" the sector as a whole for the "tax" imposed on it by macro policies. Credit. The drastic reduction and eventual elimination of agricultural credit subsidies is the single most important recommendation of this report. 209. The principal'vehicle by which recent governments have sought to offset the disincentives to agriculture caused by their industrializatio'i policies has been subsidized credit. 1/ Credit to agriculture rose some five times in real terms between 1969 and 1979 as compared to a 2.7 fold increase of the net value of agricultural output. Total credit flows to the sector in recent years have been equivalent to 75-100 percent of the net value of sectoral output. With interest rates fixed in nominal terms, these credits have been heavily subsidized, the magnitude of the subsidies growing rapidly as inflation has accelerated. In view of the magnitudes involved, remarkably little is known about the impact of these credit and subsidy volumes on investment, production and incomes. 1/ Credit subsidization was also justified in 1979 and 1980 as needed to relieve the liquidity problems suffered by farmers as a consequence of the bad harvests of 1978 and 1979. - 114 - 210. The credit and its accompanying subsidies have gone to probably no more than 20-25 percent of Brazil's farmers. The bulk of crop credits is accounted for by six commodities: soybeans, wheat, rice, corn, coffee, and sugarcane. Wheat and rice, in particular, have received credit allocations well in excess of their respective proportional contributions to agricultural output. The relative shares of credit going to black beans and manioc, on the other hand, have been far below their relative contributions to output. Trans- lated into regional terms, a disproportionate share of credit (compared to output value) has gone to the farmers of the Center-South, while the Northeast has chronically received a much smaller share of credit than its share in the value of production. Although precise data are not available, it is apparent that access to credit improves as a function of farm size and that the flow of credit had, in relative terms, become increasingly concentrated over time, at least through 1978, at the larger-farm end of the land distribution. A sub- stantial effort was undertaken by the Government in 1979 to reach small farmers, and some success has apparently been achieved in widening access to the rural credit programs. 211. By the second half of the 1970s, agricultural credit subsidies in Brazil had reached such a magnitude as to constitute an important element of macroeconomic destabilization. For those farmers who receive the credit, some justified offset to the disincentive effects of other policies may be provided. Meanwhile, those lacking access to the credit system are put at a still greater disadvantage in the competition for economic resources. With access .o credit determined at least as much by institutional factors as by relative returns to investment, there is no reason to believe that the concentrations of credit use described above accord with the most efficient allocation of land and other factors within the sector. Indeed, with land itself a primary determinant of access to credit and the associated subsidy, its market value may have been bid up quite independently of its value in production, overwhelming whatever contrary impact might be expected from the rural land tax. There is also good reason to believe that some non-negligible portion of the subsidized credit has been diverted, either directly or indirectly, to nonagricultural end uses. 212. Several additional points should be emphasized in connection with the recommended phase-out of credit subsidies. The availability of credit is important to production, particularly in agriculture where production is seasonal and a considerable lag occurs between the times of major expenditure and the resultant flow of income. Farmers, therefore, need credit. If prices for their inputs and output are right, however, there is no special need for credit subsidies. This proposition holds for small farmers, too, whose problem in Brazil has not been a shortage of subsidies but a lack of access to credit at all. Subsidies on their behalf may be called for in the form of a public agency picking up all or a portion of the higher unit costs of making small loans, and of extension services to stimulate the adoption of modern farm practices, but the production decisions of the small farmer as well as of the large one should be guided by the full market cost of its financing. 213. Finally, it is evident that a necessary concomitant recommendation of this report is the most extensive possible removal of the input and output price ceilings and controls, quotas and other devices which have long been applied in Brazil to the detriment of agricultural production incentives. - 115 - Some progress has been made since 1979 both in raising effective interest rates and reducing other price and supply distortions, and it is recognized that the "overnight" elimination of credit subsidies could cause a significant short-term disruption of production incentives. As Government technicians point out, high rates of inflation result in large relative price movements, which greatly increase the risks to a farmer borrowing at equally high interest rates to finance production. Given the importance of their macroeconomic impact and direct contribution to that inflation, however, it is urgent that these subsidies be drastically reduced. Minimum prices. Access to, and the relevance of, the minimum price program to small farmers, and producers of basic food crops in general, need to be improved. In addition to measures already taken toward this end, it is recommended that the minimum price for basic food crops be brought more into line with projected market prices and that minimum prices generally be indexed to the rate of inflation occurring between the time of its announcement and the eventual harvest of the crop. 1/ 214. The minimum price program, currently covering some 42 agricultural commodities, is intended to provide the farmer a degree of protection against downside price risks and thereby encourage investment and production that might otherwise be inhibited by market uncertainties. At the time of harvest, farmers may sell their crop to the market at the going price, to the govern- ment at the guaranteed minimum price, or store it in an approved warehouse and borrow from the government an amount equivalent to the crop's value at the minimum price. At the loan's maturity (or before) the farmer may sell the crop to the market and, with the proceeds, repay the loan, or he may cancel the loan, the government taking title to the crop. 215. Crop sales to the government have comprised only a small part of the program's operations in recent years, largely acting as a welfare program for certain depressed crops in the Northeast, and more recently, as a supple- ment to the limited marketing infrastructure of the frontier areas. The loan program has grown very rapidly, however, almost 30 percent per year in real terms in the 1970s. Similar to other lines of agricultural credit, the crop storage loans are heavily subsidized, with nominal interest rates fixed far below the rate of inflation, and the benefits have been heavily concentrated among a few farm products. Almost 60 percent of storage loans in recent years have gone to producers of soybeans and cotton, with rice and corn accounting for another 30 percent. The three regions of the Center-South received 90 percent of the storage credit, while the North and Northeast, which together account for about 23 percent of output value, received only 10 percent. 216. As in the case of credit more generally, little is known of the effects of the minimum price program. Minimum prices were adjusted upwards rapidly in real terms over the first half of the past decade, but then were allowed to slide until recently. By harvest time, the minimum price has typically been well below the prevailing market price, and the principal inducement to crop storage has been the availability of fixed, low interest credit in the face of strong expectations of further price, inflation. The basis for planting decisions was thus shifted away from the comparison of 1/ A system of indexing has been announced for the 1981/82 crop year. - 116 - resource costs and market prices to speculation regarding relative inflation rates which could be partially self-fulfilled through access to the minimum price program itself. As credit subsidies are phased out in accordance with the earlier recommendation, the minimum price itself will assume greater significance as a guide to planting decisions. 217. The greatest divergences between minimum price and market price have typically occurred in the cases of manioc and beans, products which also experience the lowest price-elasticities of demand and greatest market price instability -- hence, the greatest planting risks. The low minimum price set for these products, combined with the problems of access of widely scattered small farmers, explains their negligible participation. 218. The Government began to use the minimum price more aggressively for the 1979/80 crop year as a tool to. stimulate the expansion of planting, and an effort was made to build a realistic inflation factor into the prices set. With infaltion exceeding expectations, however, the minimum price for most crops had again fallen in real terms by harvest time in comparison with the year before. Still larger increases were decreed in 1980/81, and it appears that this time a real increase was achieved. 219. It should be emphasized that the recommendation made here that the minimum price be formally indexed is intended only to protect its credi- bility as a meaningful floor to downside risk in the eyes of the farmer, particularly important for crops subject to sharp year-to-year price fluctua- tions. It is not intended to assure the farmer of an ex post profit or of a price above the market. It is not intended to be a long-term production subsidy. A formal indexing mechanism, in effect and known at planting time, is also considered superior to an ad hoc adjustment at harvest time. This latter system would constitute a pure income transfer to the farmer occurring long after the planting decisions the minimum price program is intended to affect. 220. A number of positive measures have been introduced in the past two years in an effort to improve the access of small farmers to the minimum price program. These have included a "bridge" credit to cover the period between harvest and delivery to a warehouse, during which time the crop must be collected, dried, and classified. Also, beginning in the 1980/81 crop year, private commercial banks were enabled to participate in the storage loan program for the first time, thereby widening geographical coverage. These are steps in the right direction, and the results should be carefully monitored. Wheat subsidies. The subsidy on wheat should be eliminated. 221. The government is the sole importer of wheat in Brazil and the sole purchaser from the farmer. It thus controls the price to the farmer and to the miller; it also controls the latter's sales margins and the retail price of wheat products. The wheat program, implemented through the differentiation of these prices, began as a subsidy to the farmer with the principal objective of making Brazil self-sufficient in its production. Over time, however, the program has shifted toward the subsidization of the consumer, the magnitude in 1980 approximating US$1 billion. The consumer subsidy has resulted in a rapid growth in the demand for wheat products, partly in substitution of other domestic grains and manioc, and despite a considerable expansion of domestic wheat acreage and output, Brazil remains a major importer. - 117 - v.22. Wheat in Brazil is subject to substantial production risks as a consequence of climate and a high incidence of pest and disease problems. Nevertheless, its cultivation may not be uneconomic because of its role as an off-season crop on soybean land. The machinery, labor and some chemical inputs applied to wheat are complementary with soybean production, and wheat appears currently to be the most economic off-season alternative. Indeed, the expansion of wheat may have more to do with the market-induced expansion of soybean cultivation than with the subsidy program. 223. Prior to 1980, the wheat subsidy was transacted through the Monetary Budget, where the ultimate source of funds is the Central Bank. The subsidy is now financed explicitly through the Treasury budget, and the Government has several times indicated publicly its intention to phase it out. Important steps were taken in that direction over the second half of 1980 and early 1981, when substantial increases were decreed in the price charged the millers and were passed on in the prices of final consumer products. Given the importance of wheat products in the cost of living, however, and particularly in the budgets of low-income consumers, elimination of the subsidy is politically difficult to accomplish. The strong recommendation put forward here is made in recognition of the contribution of the subsidy to inflation and Brazil's current balance-of-payments difficulties as well as to its detrimental impact on the production of other domestic crops. 224. If it is desired to subsidize the consumption of low-income citizens, it should be done, insofar as possible, in ways which do not distort production incentives and do not involve the unnecessary and unjustified subsidization of high-income families at the same time. A system of food stamps or food distribution through the schools, community health centers, or retail outlets in poor neighborhoods could provide possible alternatives. Such a program is now being carried out on a small scale through several of the state CEASAs. Fertilizer costs. The protection accorded domestic fer- tilizer production should be gradually reduced and the industry's output mix and location rationalized. 225. Fertilizer use has expanded very rapidly in Brazil over the past decade, despite a domestic market price substantially above the world price in most years. A primary stimulus to the growing use of fertilizers was the availability of subsidized credit (zero nominal interest) and, in some years, direct price subsidies paid to the farmer. 1/ Almost three-fourths of fertilizer consumption was accounted for-by six crops: soybeans, sugarcane, wheat, coffee, rice, and corn, in that order. The first two of these crops used more than a third of the total. Ninety percent of total fertilizer use occurred in the regions of the Center-South. 226. The decade of the 1970s saw a rapid increase in the proportion of total fertilizer consumption supplied by domestic industry. That proportion, measured in terms of nutrient content, jumped from 7 percent to 39 percent in the case of nitrogen fertilizers between 1970 and 1978, while for phosphates it rose from 41 to 74 percent. (Brazil produces no potassium fertilizers.) 1/ Fertilizer loans are now made on the same terms as other production credits. Interest rates are subsidized but to a lesser extent than before. - 118 - The domestic industry enjoys substantial tariff protection and a quota ("contingency ratio") fixing the minimum share of domestically produced components in the fertilizer mixtures sold to the farmer. In 1978, despite retail price controls, Brazilian farmers were paying, on average (before allowance for the credit subsidy), about 40 percent above the CIF import price for phosphate products and 12 percent above for nitrogen products. 1/ 227. The high cost of domestically produced fertilizers appears to be the combined result of the distance of the plants from the site of the raw materials, large off-season idle capacity, shortage of domestic supplies of natural gas, and the use of production processes designed for higher phosphate concentrations than found in the domestic rock. While relocation of plants to reduce transport costs may not be feasible in the near term, serious reconsideration needs to be given to existing plans to expand the production of the more complex phosphates which will remain highly dependent on foreign inputs. Concentrating import-substitution efforts on simple super phosphates, on the other hand, could make more economic use of the local raw material, result in greater net foreign exchange savings, and involve smaller capital costs. Seed improvement and dissemination. Greater public resources should be devoted to the development and distribution of im- proved seeds, particularly for black beans and other basic food crops. 228. Some crops, such as soybeans, wheat and cotton, are well advanced in the use of improved seeds; most others are not. In the case of black beans, for example, less than 4 percent of the area is planted with improved seed. These differences broadly reflect past decisions on research priorities, wide disparities in the technological sophistication of Brazil's farmers, and differences of access to credit and other public services. Private seed development, moreover, tends to be limited to crops, such as corn, for which new hybrid seed must be purchased annually, i.e., for which the improved plant once grown does not produce its own seed, thus precluding further sales. Given the large amount of land in crops and the low current use of improved seed, even modest improvements in yields would provide a large return, in terms of food supply, from such investments. Rural land tax. To make the newly revised rural land tax effective as an incentive to productive land use, the re- sources devoted to its administration will have to be sub- stantially increased. Its effectiveness depends also on the drastic reduction of agricultural credit subsidies. 229. The rural land tax, first introduced in 1964, has recently been revised to provide substantial penalties, on the one hand, for continued underutilization of land resources and tax forgiveness, on the other, for above-standard utilization and yields. The tax base is the landowner's declared value of the unimproved land. 1/ The degree of "taxation" of the farmer has varied sharply over time, as the price controls and contingency ratios have been used partly to insulate the farm sector from the volatility of international fertilizer prices. During the high world price years of 1975 and 1976, farmers received a direct 40-percent subsidy. - 119 - 230. The land tax as first introduced in 1964 is generally agreed to have had little, if any, impact on land use. Although tax rates were varied according to farm size and utilization, little differentiation was achieved and tax rates were, in any event, extremely low. INCRA, the executing agency, lacked the staff and resources to prevent widespread evasion, and declared property values were but a small fraction of actual market values. Meanwhile, the availability of heavily subsidized credit, access to which depended prin- cipally on the ownership of land, has probably contributed to rapid inflation of land values quite independently of the productive quality of its use. 231. The reforms introduced in the tax can greatly enhance its effective- ness in dampening land speculation and encouraging efficient land use. 1/ This result will still depend, however, on the seriousness with which the tax is viewed by landowners and administered by INCRA. Greater resources must be devoted to inspection and enforcement. Moreover, even if the tax is fully collected, it cannot achieve its objectives so long as the value of credit subsidies to which land ownership gives title exceeds, as it does now, the maximum tax that an owner of even idle land would have to pay. The promotion of processed agricultural exports. The extensive system of government interventions introduced to provide special inducement to the processing of agri- cultural raw materials for export should be gradually dismantled. 232. Much of the "compensation," paid in the form of credit and other subsidies, for the broad anti-agricultural bias of import-substitution indus- trialization policies has gone to a limited number of crops, principally grains and export crops. Export crops have been affected also by a complex and ever-changing mix of export taxes, quotas, quality controls and prohibi- tions; and supply guarantees for local processors. The latter are also bene- fitted by tax exemptions and other subsidies to their exports not available to exporters of the unprocessed agriciultural commodity. 233. The results of the effort to promote the greater industrialization oC agricultural products have been spectacular. -Whereas Brazil's share of the international market for raw soybeans peaked in 1975 and has fallen sharp],y since then, it has become the dominant exporter of soy meal and soy oil. Raw cotton exports have practically disappeared in favor of a massive expansion of yarn and cloth exports. The share of processed cocoa products in total cocoa exports rose from 23 percent in 1969 to 49 percent in 1979. Similarly, the processed share of coffee exports grew from less than 2 percent in the mid-1960s to 18 percent by 1979. In the case of sugar, the share of refined products rose from only one percent in 1970 to over 40 percent, on average, by the end of the decade. 1/ This argument assumes that land is in fact being used unproductively. If the land's productive potential is overestimated, on the other hand, the tax could lead to uneconomic cultivation. - 120 - 234. This shift to higher domestic value added has increased gross foreign exchange earnings and may have generated additional employment and external economies to other sectors of the economy. The net benefits, however, are not at all clear. In the specific cases of soybeans and cocoa, it appears that the net foreign exchange earnings from the processed exports have in most years been less than what would have been earned by exports of the crop in natura. 1/ In the meantime, substantial excess capacity has been built up in the processing industries, creating continuing pressures for retention of the market interventions which induced it. Other things being equal, i.e., without offsetting credit subsidies, etc., the incentive to domestic agricultural production is reduced by quotas and other devices limiting farmers' market alternatives. 235. Perhaps as inhibiting to efficient resource allocation as the market distortions, per se, has been the frequency with which they have been modified, generally as a consequence of ad hoc responses to short-term infla- tion or balance-of-payments difficulties. Although governments can clearly not be unmindful of these problems or avoid acting to ameliorate their more severe impacts, there is a clear need at this juncture of Brazilian economic development to clarify the nation's long-term priorities among the multiplicity of objectives being pursued by its foreign trade and agricultural policies and to define in a more programatic fashion the most efficient means of achieving them. 236. In this same regard, the treatment to be accorded occasional exports, such as corn and rice, needs to be clarified and stabilized. The ad hoc application of export prohibitions and import controls in pursuit of changing inflation and balance-of-payments objectives has had a destabilizing impact on the producer prices of these crops and probably discouraged their produc- tion, for which Brazil enjoys apparent comparative advantage. 2/ A more open and active international trade policy, on both the import and export side, could serve to give greater stability to domestic supply, reduce price fluctuations, and improve production incentives. The alcohol program. To avoid the uneconomic displacement of food crops and an undesirable worsening of the regional distribution of income and employment as alcohol expansion goes beyond the targets now set for 1985, consideration should be given to the promotion of crops other than sugar- cane and to the corresponding adaptation of distillery technology to different scales of production and different feedstocks and combinations of feedstocks. 1/ It should.be noted that in the case of soybeans, a significant proportion of the processed export derives from the subsidy granted to the domestic consumption of soy oil. The case of cocoa is discussed in the Annex to the report. 2/ See the discussion of these crops in the attached Annex. - 121 - 237. Brazil has long been one of the world's major producers of sugar, primarily from sugarcane, and also has a long history of producing alcohol in conjunction with its sugar industry. Sugar production on a large scale originated in the Northeast, but growth in recent years has come principally from the Southeast and particularly from the state of Sao Paulo. In response to the shock of higher world petroleum prices, Brazil has launched a massive program to expand alcohol production as an energy substitute. The first phase of this expansion is to raise the annual output of alcohol from 3.3 billion liters in 1979 to 10.7 billion liters by 1985. Virtually all of this expansion will come from sugarcane. To accomplish that objective, an estimated addi- tional 2.2 million hectares of land (above the 1979 level) will have to be planted to sugarcane. 238. Sugarcane offers high alcohol yields and, as a bonus, provides its own fuel (bagasse) to the distilling process. On the other hand, it is highly demanding of the climate and high quality soils also best suited to food crop production. Projections for Sao Paulo, a major center of present and expected alcohol production, suggest that food crops displaced by the sugarcane expansion anticipated to 1985 can relocate on cultivable lands currently in pasture with only small consequent increases in the real cost of food produc- tion. Indeed, under the government's zoning policy, much of the sugar expan- sion will occur directly on the land currently in pasture. Beyond 1985, however, expansion along the same lines would involve increasingly serious food-alcohol trade-offs. This trade-off may be more immediate in the other major production center, the Northeast, where it is also feared many small farmers could be displaced by the expansion of sugar land. 239. Of the possible alternative crops, manioc can be grown under widely varying soil and climate conditions, and it offers the further advantage of being primarily a small-farmer crop. Yields in Brazil are very low, however, and its potential productivity under commercial conditions is unknown. Moreover, manioc requires a separate heat source for making alcohol and thus offers a less favorable energy balance. One possibility meriting exploration would be a complementary system utilizing both manioc and sugarcane in the Northeast. Manioc grown in the semi-arid agreste could be chipped and dried and used as off-season feedstock in appropriately adapted distilleries of the sugar zone. Excess sugarcane bagasse could serve as the needed energy input to the processing of the manioc. 240. Similar possibilities exist for combinations of sorghum and manioc or sorghum and sugarcane. Research is also going forward on the distillation of alcohol from wood. Given the relatively high costs of transporting alcohol, production costs need not be equally low in all parts of Brazil. Research into and development of the various alternatives available offer the future prospect of reducing the income and employment disparities that the alcohol program might otherwise exacerbate, and indeed offering positive benefits to some of Brazil's poorest agricultural areas. - 122 - C. Concluding Observations 241. For the past several decades, Brazilian policies aimed specifically toward agriculture have typically been formulated in a largely ad hoc fashion in the context of a general policy framework which dampened agricultural production incentives, and in response to immediate, short-run domestic supply problems. In the process, there has grown up over time a complex and ever-changing myriad of specialized government agencies, semi-autonomous institutions and enterprises to administer a vast number of programs involving an even greater array of specific market interventions with frequent changes in both mode and direction. The substantial progress achieved by Brazilian agriculture over the past several decades is a clear demonstration of its enormous productive potential. This progress has not been evenly shared, however, by product group or by geographical region. 242. In recent years, an increasingly generous effort has been made, in the forms of massive credit subsidies and tax incentives, to "compensate" agriculture for the discrimination suffered under the regime of import- substitution industrialization. Increasing resources have also been devoted to agricultural research, the minimum price program, and other support services. The benefits of these programs, however, have been highly concentrated among producers of a few crops -- principally the major grains and export crops. This concentration has probably derived more from historical and institutional factors than from policy design, but the result is a clearly perceived duality in the long-term performance and current productivity of Brazilian agriculture which is not necessarily related to underlying comparative advantage and has had negative consequences for the distribution of incomes among households and among regions. 243. The importance of agriculture in its own right to Brazil's long-term development has been highlighted by the world energy crisis and the nation's macroeconomic difficulties. After many decades in a support role, agriculture is now being accorded a high policy priority. The time is ripe, therefore, for a more programatic approach to sectoral policy. It is the view of this report that the way to begin is by "getting the prices right throughout the economy," removing the controls and quotas, etc., that are taxing agriculture's production incentives, rather than continuing a patchwork effort to compensate them. Pari passu with the removal of these taxes should be the removal of the no longer necessary subsidies, which, in addition to the distortion of produc- tion incentives and rewards created within the agricultural sector, have become an important element of macroeconomic destabilization. - 123 - Annex: Major Crops A. Domestic Food Crops 1. According to a 1975 household survey of Sao Paulo, families earning up to two minimum salaries (MS) spent 51 percent of their incomes on food, the food share decreasing to 45 percent for families in the 2-3.5 MS bracket and 38 percent for families between 3.5 and 5 MS. 1/ Seven groups of items absorbed almost 80 percent of expenditures on food, the main ones being grains (27 percent), legumes and beans (16 percent), anG beef (16 percent). In the rural areas manioc and corn substitute for wheat' the ccLlsumption of edible oils (basically soybean oil) is also probably lower in the rural than in the urban areas. 2. Table A.1 reports the growth of domestic production, measured in calories per capita, of a basket of foodstuffs -- rice, black beans, manioc, white potato and wheat -- which combined accounted in 1975 for some 55 percent of the calorie intake of lower-income families in Sao Paulo. 2/ Production so measured rose substantially through the first half of the 1960s, leveled off through the second half and then declined through the early 1970s. That this weak performance might simply reflect iow income-elasticities of demand for these commodities appears belied by the real price movements also reported in Table A.I. By 1976 the real price per calorie via this market basket stood at almost twice the level of the early 1960s. This annex reviews the recent performance of several of the basic items composing the domestic food supply. (Wheat policy and performance were discussed in Chapter II of the main text.) 3. Corn. Corn is Brazil's major crop by area planted, accounting for about one-fourth of land under crops. It accounts for some 10 percent of total crop value, second in this regard only to soybeans. Brazil was a significant though erratic exporter of corn in the first half of the 1970s, exports averaging over 940,000 MT per year from 1970 through 1976. 4. Corn output rose at a trend rate of less than 3 percent per year in physical terms from 1970 to 1980, with area harvested rising 1.6 percent per year and average yields effectively constant (Table A.2). Yields remain low by international standards. Although corn cultivation is widely dispersed throughout the country, output is largely concentrated in fcur states -- Parana, Sao Paulo, Rio Grande do Sul and Minas Gerais -- which together contributed 65 percent of total output in 1977. 1/ A national household expenditure survey in that same year showed that food accounted, on average, for 25 percent of total family monetary and nonmonetary expenditures. 2/ It should be noted that the data presented do not include imports and stock adjustmnents and should thus not be taken to measure total availability of these. - 124 - Table A.1: Per Capita Production and Price Per Calorie of Selected Food Basket, 1962/65-1976 Production Indices of Real Price per Calorie ('000 calories (1962=100) Year per capita) At/ Bb/ 1962-65 (ave.) 581.2 74 80 1966-69 (ave.) 600.5 64 78 1970 626.8 64 79 1971 610.7 63 78 1972 587.9 68 82 1973 544.9 97 117 1974 504.4 1.25 162 1975 515.0 132 161 1976 554.2 138 156 a/ Deflated by General Price Index. h/ Deflated by Minimum Wage. Source: Jose R. Mendonra de Barros and Douglas 'H. Graham, "A agricultura brasileira e o problema da producao de alimentos," Pesquisas de Planejamento Economico, Rio de Janeiro, Dezembro de 1978, p. 715. Table A.2: Corn Area, Production, Yields and Trade, 1970-1980 Area Year Harvested Production Yields Imports Exports (000 ha) (000 MT) (kg/ha) ------ (000 MT)-------- 1970 9858 14216 1442 2 1470 1971 10550 14130 1339 1 1280 1972 10500 14500 1381 2 172 1973 9924 14186 1430 4 41 1974 10672 16273 1524 3 1109 1975 10855 16334 1504 3 1200 1976 11118 17751 1596 1 1317 1977 11797 19256 1632 1 1420 1978 11125 -13569 1219 1262 15 U' 1979 11319 16306 1440 1526 10 1980 n.a. 20374 n.a. n.a. n.a. Source: FIBGE, CACEX. - 126 - 5. Corn is grown predominantly by small farmers. A 1975 sample of four states accounting for about 30 percent of total area planted to corn shows that 36 percent of corn production came from holdings of less than 20 ha, and almost 70 percent of total output was produced in holdings of less than 50 ha (Table A.3). Sixty percent of corn was grown as a single crop, the remaining 40 percent in association with beans, coffee (at early stages of plantation) and others. 6. A major development in corn use in Brazil has been its increasing consumption in prepared animal rations, which trebled between 1971 and 1978 (Table A.4). As a fraction of total output, 12 percent of the corn crop was consumed in mixed feeds in 1971, while 23 percent of a much larger crop was used for that purpose in 1977. (Figures for 1978 and 1979 are not representative because of the crop failures in those years.) In addition to use in prepared animal rations, another large part of the corn crop is used as animal feed at the farm level (pigs, poultry and dairy cows). It is currently estimated that about 80 percent of total output is in fact used for animal consumption. The comparable figure for the beginning of the decade was about 70 percent. The poultry industry, growing at an average annual rate of 8 percent in the recent past, is the main user of mixed feeds and represents an important factor for the expansion of corn production. 7. With regard to human consumption, corn is particularly important in the rural areas. Some 3.5 million MT of corn are annually consumed by humans in Brazil. 8. Only about 4 percent of the corn crop, on average, benefitted from EGF loans during the 1970s, the proportion reaching a high of 8-9 percent of total production in 1976 and 1977 as a result of bumper crops and low market prices. Government corn purchases (AGF) were virtually nil up to 1974-76, when they averaged 100,000 MT a year. In 1977 the government purchased 8 percent of the crop, while in 1978 government intervention was again strong but this time as a result of massive corn imports channeled through CFP. 9. The evolution of corn production in Brazil has been influenced by the cheap wheat policy. The price of wheat relative to corn declined by some 30 percent at the retail level between 1974 and 1978. During that period the consumption of wheat products grew at an annual rate of 5 percent. Considering two possible values for cross elasticities of substitution, .30 and .70, a 30 percent decrease in the relative price of wheat would have implied, other things being equal, a reduction of the demand for corn on the order of 9 per- cent and 21 percent, respectively. 10. Assuming two possible scenarios for the supply of and demand for corn (Table A.5), the reduction in the price of corn resulting from the hypothesized shift in demand could vary from 6 percent in the case of low cross elasticity and "high" own elasticities for corn, to a 35-percent reduction in the case of high cross elasticities and low own-price elasticities for corn. An intermediate result is obtained if all functions are relatively inelastic. In this last case, reductions in corn prices attributable to wheat policy would be on the order of 11 to 15 percent. Table A.3: Corn - Distribution of Area Planted by State and Size of Holding, 1975 (Percent) Size of Holding Rio Grande do Sul Espirito Santo Santa Catarina Goias Total (hectares) (000 ha) % 0-5 66.1 2.9 33.7 9.0 111.7 4 5-20 661.5 26.5 268.8 47.2 1004.0 32 20-50 592.0 51.7 280.2 72.6 996.5 32 50-150 148.9 34.2 87.3 86.1 356.5 11 150-500 87.9 30.5 48.1 274.7 441.2 14 500-1000 17.9 3.9 6,6 88.6 117.0 3 >1000 17.7 .9 4.0 108.7 131.3 4 1592.3 150.7 728.4 686.9 3158.2 Source: FIBGE, Preliminary computations from 1975 Census. Table A.4: Use of Corn and Mixed Feeds, 1971-79 Output of Year Mixed. Feeds Corn Component in Mixed Feeds Principal Uses of Mixed Feeds (million M1) In million HT 'As % of-the (Z of total) torn crop Poultry Swine 1971 2.7 1.7 12 78 11 1972 3.2 2.0 14 76 12 1973 4,0 2.5 18 76 12 1974 5.2 3.2 19 76 12 1975 5.7 3.5 21 72 14 1976 6.6 4.0 22 74 13 1977 6.7 4.5 23 62 20 1978 7.-7 5.4 59 29 1979 9.7 6.3 Source: Sindicato de Industrias de Raqges Balanceadas, Sao Paulo. -129- Table A.5: Estimated Effects of the Wheat Program on Corn Output and Prices I. Price Reductions (Percent) Corn:, Elas5icity of Supply 1 1 .30 .30 Elasticity of Demand .30 .50 .30 .50 Cross Elasticity Corn-Wheat Hypothesis A: .30 -7 -6 ! -15 -11 Hypothesis B: .70 -16 -14 -35 -26 II. Quantity Reductions (Percent) Elasticity of Supply 1 1 .30 .30 Elasticity of Demand .30 .50 .30 .50 Cross Elasticity Corn-Wheat Hypothesis A: .30 -7 -6 -5 -4 Hypothesis B: .70 -16 -14 -10 -8 Source: Mission estimates. - 130 -- 11. Corresponding reductions in corn output would have been between 6 and 16 percent in the two first cases. On the likelihood that supply elasticities are moderately low, the reduction in output would have been between 4 and 10 percent of total production. These figures illustrate some indirect effects of the wheat program on crops for which they substitute in consumption. The order of magnitude found here suggests, in the moderate case of "low" elasticities for the own amount and supply functions, an annual loss in production on the order of US$200 million (10 percent of 16 million MT at US$120/MT). 12. The high potenti.al for corn expansion in Brazil is suggested by the results of Table A.6, where an attempt is made to explore the competitiveness of Brazilian corn production, comparing corn prices at the farm level in Brazil and the United States. Ideally, border prices should be used for this analysis instead of farm prices, so the results in this table have to be regarded as first approximations. For every year, except 1978 when overvaluation of the cruzeiro is thought to have been significant, the price ratio is below one, strongly suggesting that Brazil has a comparative advantage, largely unexploited, in producing corn. 1/ 13. As indicated above, production incentives for corn have been impaired by the operation of the wheat program. It is interesting to note that the output loss resulting from the induced substitution of wheat for corn, which was estimated to be on the order of 1.5 million MT of corn per year, is close to the level of Brazilian corn exports in the early 1970s, when the wheat program was not providing as strong a consumer subsidy as in the recent past. In 1978 and 1979 Brazil imported more than one million MT of corn per year to balance domestic consumption. It is a legitimate question whether imports of such magnitude would have occurred in the absence of the wheat program. 14. Rice. Rice is an important component of the domestic food supply in Brazil, average per capita consumption of milled rice amounting to 44 kg per year in 1974. Average area planted in recent years has averaged about 6 million ha (Table A.7), making rice the third most important crop in Brazil in terms of land use. Output grew at an annual trend rate of 2.3 percent between 1970 and 1980; yields remained virtually stagnant over the period, output expansion taking place entirely as a consequence of increases in the area harvested. 15. Rice production is widely distributed in Brazil. In the 1970s the Center-West's share of area harvested increased from 28 to 37 percent, and its share of output rose from 24 to 29 percent, while the Southeast's shares decreased from 31 to 23 percent of rice area and from 25 to 17 percent of rice output (Table A.8). 16. The technical conditions under which rice is grown diverge substan- tially among regions, and are reflected in yields (Table A.9). National yields are low by international standards. In the South, where rice is irrigated, yields are almost twice the national average, having increased by 9 percent between 1971 and 1977. On the other hand, in the Center-West, where production expanded in this period, yields declined by 13 percent; as marginal 1/ A final judgment, of course, would require consideration of the incidence of input price distortions and overvaluation of the cruzeiro. Table A.6: Brazil and U.S. Producer Prices for Corns, 1970-78 BRAZIL (Paran!)a/ bIUSAb Relative Price Year Corn Rate of Corn Corn of Corn: Price Exchange Price Price Brazil/USA (Cr$I/MT) (CR$s/uS$s) (US$ /MT) (US$/MT) 1970 150 52.4 1971 213 5.30 40.1 42.6 .94 1972 272 5.98 45.4 61.8 .73 1973 392 6.10 64.2 100.3 .64 1974 518 6.85 75.6 118.9 .64 1975 705 8.28 85.1 102.3 .83 1976 833 10.75 77.5 84.6 .92 1977 981 14.20 69.0 79.5 .87 1978 1861 18.50 100.5 83.0 1.20 a/ Yellow white and mixed corn. -/ Yellow corn no. 2. Source: CFP, FGV, USDA. Table A.7: Rice Area, Production, Yield, Imports and Exports, 1970-1980 Area a il rs Year Harvested Production- 'Yield Exports- Imports- (000 ha) (000 MT) (kg/ha) ------(000 MT) 1970 4979 7553 1517 95 1971 4764 6593 1384 149 1972 4821 7824 1623 2 1973 4795 7160 1493 33 11 1974 4665 6764 1449 57 1975 5306 7702 1466 2 63 1976 6656 9757 1465 76 -15 1977 5992 8994 1500 408 - 1978 5624 7296 1297 137 28 1979 5452 7595 1393 696 1980 n.a. 9748 n.a. n.a. n.a. a/ Paddy rice. b/ Milled rice. p/ Preliminary. Source: Appendix Tables 1.5a, 1.7a and l.9a; CACEX. - 133 - Table A.8: Regional Distribution of Rice Area and Output 1971/73-1975/77 (percent) Region 1971/1973 1975/1977 Area Output Area Output North 2 2 3 2 Northeast 18 16 17 16 Southeast 31 25 23 17 South 21 33 20 26 Center-West 28 24 37 29 Total 100 100 100 100. Source: SNAP. Table A.9: Rice Yields by Regions, 1971/73-1975/77 (kg per ha) Region Period Percent Change 1971/73 1975/77. 1971/73 North 1097 1294 +18 Northeast 1279 1399 + 9 Southeast 1165 1080 - 7 South 2391 2616 + 9 Center-West 1286 1124 -13 Total 1480 1473 - Source: SNAP. - 134 - lands were put into cultivation, and soil fertility fell rapidly after a year or two of production. Rice in the Center-West and Northeast plays an important role as a "first crop," i.e., a crop planted immediately after the land is cleared as an intermediate step between land settlement and a permanent type of land use. 17. In the irrigated rice area, one-third of production, in 1975 wasir concentrated in holdings of 50-100 ha, while a still substantial part of production (23 percent) was located in holdings of over 1,000 ha (Table A.10). A very different picture prevails in the Center-West, where almost 50 percent of the total production came from units of less than 50 ha, 17 percent of which corresponded to holdings of less than 5 ha. 18. As in the case of corn, the large fall in the price of wheat relative to rice has undoubtedly affected demand for the latter, resulting in a disin- centive to rice production. The loss of potential production, estimated following the conservative assumptions and procedure applied above for corn, is substantial--on the order of 700,000 MT of rice per year. 19. A suggestion of the international competitiveness of Brazilian rice production can be found in Table A.l1, where rice prices at the producer level in Brazil and the United States are compared at the annual average rates of exchange. Once again, the figures in the last column provide only a first approximation, because farm prices instead of border prices were taken as the basis for comparison. -¸urthermore, if rice production in the United States was protected during sonie years of the period analyzed, the comparison loses validity. With these reservations in mind, the evidence available suggests that Brazil has a comparative advantage in rice production. Only in two years out of eight were Brazilian prices higher than US prices. In 1978 this may, to a large extent, have been the result of overvaluation of the cruzeiro. 20. A recent survey conducted by the CFP gives additional evidence of the coraparative advantage of rice production in Brazil. The results of four technological alternatives are simmarized in Table A.12. The two nonirrigated alternatives represent situations typical of the Center-West and Northeast, while the irrigated alternatives correspond to the South. Total costs have been grossly divided between "domestic" and "imported" to derive a preliminary estimate of the value of the domestic resources required to produce one dollar's worth of rice under different technologies and in different areas of the country. All land, labor and seed costs were assumed to be domestic, as well as 50 percent of machinery costs and 30 percent of drying costs. All fertilizer and pesticides were regarded as imported components, on the ground that Brazil imports a large fraction of these inputs, and additional units of them would imply additional costs in foreign currency. In the case of machinery and drying costs, the energy requirement, which is also largely imported, justifies their partial inclusion among the imported components. 21. Considering several hypothetical import prices for rice, and multi- plying costs of production by 1.40 to convert them crudely into milled rice, it is possible to derive some estimates of the domestic resource cost (DRC) of rice. In all cases except one, the resulting DRC coefficients are below the market rate of exchange (as of the time the survey was made), suggesting the existence - 135 - Table A.10: Distribution of Area Planted in Rice, by Size of Holding, in Rio Grande do Sul and Mato Grosso, 1975 Size of Holding Rio Grande do Sul Mato Grosso (ha) Area Percent Area Percent (000 ha) (000 ha) 0-5 5 1 46 17 5-20 48 9 55 21 20-50 63 12 31 11 50-100 54 10 21 8 100-500 177 33 44 16 500-1000 67 12 15 6 > 1000 123 23 57 21 Total 537 100 P269 100 Source: Provisional computations from FIBGE., 1975 Census. Table A.ll: Brazil and U.S. Producer Prices for Rice, 1970-78 - -------------------------BRAZIL---------------------- ----USA - Relative Year Producer Price Rate of Exchange Producer Price Producer Price Price (Cr$/MT) (Cr$/US$) (US$/MT) (US$/MT) Brazil/USA 1970 314.1 4.92 . 63.8- 1971 422.1 5.30 79.6 117.6 .68 1972 585.0 5.98 97.8 148.2 .66 1973 623.3 6.10 102.1 303.9 .34 1974 1000.0" '' -6.85 '145.9 -- 246.7 .59 1975- 1823.3 8.28 220.2 - 183;9 '1.20 1976 -1585.0 10.75 147.4 154.6 .95 1977 - 1868.3 14.20 _31_6 209.0 .63 1978 3465.0 18.50 -187.3 170.0 1.10 Source: CFP, USDA. - 137 - Table A.12: Domestic Resource Cost of Rice Under Alternative Assumptions, May 1979 (Cruzeiros per dollar of rice) --------------Technology------------- Non-irrigated Irrigated Yields (MT/ha) 1.2 1.8 2.4 3.6 Price of Rice (US$/MT, CIF) 300 21.90 18.90 29.70 23.30 360 16.60 14.80 22.50 18.00 240 32.30 28.80 43.90 33.00 Fertilizer Prices 30% up Rice at US$ 24.90 21.20 32.70 25.00 300/MT Source: CFP. Table A.13: Black Beans -- Area, Production, Average Yields, and Trade, 1970-80 Area Average Year Harvested Production Yield Imports Exports (000 ha) (000 MT) (kg/ha) --------- (000 MT)------ 1970 3485 2211 635 2 1971 3936 2688 683 2 - 1972 3971 2676 674 1 6 1973 3816 2332 585 14 - 1974 4289 2238 521 - 2 1975 4146 2282 550 3 55 1976 4059 1840 453 53 1 1977 4551 2290 503 75 1978 4617 2194 475 10 1979 4212 2186 519 1980 n.a. 1969 'n.a. Source: CACEX and Appendix Tables 1.4a, 1.7a and 1.9a.. - 140 - discernible trend since the mid-1960s, despite a 2 percent per year expansion of area harvested. Yields have fallen. Among the causes of declining bean yields have been the displacement of plantings to less fertile lands, lack of improved varieties, and the almost total absence of modern inputs in the production process. 28. Beans are grown in all the main agroeconomic regions of Brazil, but their relative importance and productivity vary widely. The South, with some 27 percent of total bean area, supplies 38 percent of total production. Yields there are on the order of 700 kg/ha, well above the national average. The Northeast, in contrast, has some 40 percent of the area and accounts for only 30 percent of total production; yields are below 400 kg/ha, a reflection of ecological constraints and lack of modern technology. At the same time, beans are most important in the Northeast where they contribute 9 percent of crop value, while in the South and Southeast beans account for only 5.5 percent of total production. 29. The South is a net exporter of beans, while the Southeast and the Northeast are net importers. In 1975 the deficit in the Northeast was some one million MT, about 28 percent of total bean consumption. Per capita consumption of beans in Brazil has declined from 27 kg in 1970 to 18 kg in 1978, probably the result of some induced substitution of wheat for beans and higher bean prices. 30. Beans are typically a small-farm crop in Brazil, some three-fourths of total production coming from holdings of less than 50 ha. Bean cultivation tends to be labor-intensive, mostly family labor, and uses few modern inputs. Improved seeds are used on less .than 3 percent of the area sown. The highly atomized structure of production explains, in part, the bean farmers' relative lack of access to credit and their limited participation in the minimum price program. Bean prices, in addition to their high variability, have increased through time as supply has lagged behind demand. Increases in the real cost of bean production can be attributed to the displacement of beans to soils of lower fertility, underinvestment in research, lack of improved seed, and the diffusion of a virus disease (golden mosaic) associated with soybeans. 31. Given the importance of beans in the diet of the Brazilian poor, and the characteristics of bean production in Brazil, a program aimed at increasing the use of improved seeds merits high priority. According to Brazilian specialists there are good varieties available, but, inasmuch as bean seeds can be used for several consecutive years without a severe loss of productivity, there is no eco-.omic incentive for the private sector to produce and distribute them. The case for a greater public sector role appears strong. One of EMBRAPA's national centers established in 1975 is focused on bean research; this is an importan': step in the right direction. 32. Manioc. Manioc or cassava is the sixth most important crop in terms of land use. Some 2.1 million ha are planted to manioc (Table A.14), and production averaged 27 million MT in the 1970s, though declining over the decade. Manioc is a main source of food energy to the low-income population, particularly in the Northeast of the country. The crop is widely distributed throughout Brazil. - 141 - Table A.14: Manioc -- Area Harvested, Production and Yields, 1970-80 . J.- t W.#t .J4 * .t.. Area Year Harvested -Production Yield (000 ha) (000 MT) (MT/ha) 1970 2025 29460 14.6 1971 2071 30220 14.6 1972 2053 29830 14.5 1973 2104 26527 12.6 1974 2006 24798 12.4 1975 2041 26118 12.8 1976 2094 26443 12.2 1977 2176 25929 11.9 1978 2149 25459 11.8 1979 2111 24962 11.8 1980 n.a. 24045 n.a. Source: Appendix Tables 1.7a and 1.9a. - 142 - 33. A large fraction of manioc output comes from small holdings: 50 percent of output in Rio Grande do Sul and Santa Catarina, for example, is produced on farms of less than 20 ha (1975 Census), and 8C percent of total output is produced on holdings of 50 ha or less. In general, manioc is a subsistence crop, most farmers processing the roots for their own consumption. Flour mills, mostly located in the Southeast, are the main commercial demanders of manioc roots. Small amounts of manioc are also used in mixed animal feeds as a partial substitute for corn. The potential use of manioc in alcohol production is discussed in Chapter IV. 34. Given the low price-elasticity of demand for the final product and the absence of a significant traded component, variations in manioc production are accompanied by sharp changes in prices. Producer price variability for manioc was 56 percent during the period 1970-78 (Table 12 of the main text), more than twice the comparable value for beans, four times the variability of soybeans and three times the price variability of corn. The resultant uncertainty places a severe constraint on any attempt to increase manioc output. 35. Manioc yields declined steadily in the 1970s. Average national yields for 1975-1978 were 15 percent below those of the early 1970s. As in the case of corn, subsidized wheat prices may have prompted a process of substitution which depressed demand for manioc for human consumption. If that is the case, the analysis of the economic consequences of this process is more complex than in the case of corn., because nutritional differences between manioc and wheat are more important than differences bptween corn and wheat. A long-standing prohibition against using manioc flour in flour mixtures has also been a negative factor in the evolution of manioc production. 36. As in the case of beans, little has been invested in research to improve manioc yields, quality and productivity. This partly reflects the low social value given to the crop and the very limited basic research done on it, until recently, at the world level. The situation is now more promising: EMBRAPA has established a National Center for Manioc Research in Bahia, and the International Center for Tropical Agriculture (CIAT) in Cali, Colombia is leading a worldwide program on manioc. 37. The National Manioc and Fruit Research Station was established in 1975 at Cruz das Almas (Bahia) under EMBRAPA auspices. The work is supported in the main through the EMBRAPA budget (with some World Bank assistance), together with help from CIAT staff and, beginning in 1978, some funds from PROALCOOL. About 600 manioc cultivars have been collected in the Germ Plasm Bank, and 288 have undergone botanical and agroaomic screening to ascertain disease and pest resistance and adaptability to Brazil's varied production zones. In 1978, adaptation trials were carried out, in conjunction with state research organizations in Manaus ane Belem (representative of the humid tropics) and Felixlandia in Minas Gerais (representative of the cerrado). Research staff are particularly encouraged by the identification of cultivars at Felixlandia, which appear to be resistant to bacterial blight, a particu- larly serious disease in much of the cerrado. Nevertheless, Cruz das Almas staff are of the view that another 2-3 years will be required before EMBRAPA Table A.15: Exports of Coffee Products, 1964-80 Value of Exports Total Volume of Exports Processed Coffee Brazil's Coffee (US$ million) Coffee Exports Metric Tons ('000) as Percent Exports as Percent Coffee Processed as Percent Coffee Processed of Total Value Year of World Total (Qty) Beans Coffee of Total Exports Beans Coffee of Coffee Exports 1964-68 33.3 $ 741.9 $ 12.3 45.4 965 6 1.7 1969 36.2 813.0 32.7 36.6 1,121 18 4.0 1970 32.4 939.3 42.5 35.8 962 21 4.5 1971 34.4 772.5 49.7 28.3 1,034 23 6.4 1972 33.2 989.2 67.9 26.5 1,050 34 6.7 1973 31.6 1,244.3 100.0 21.7 1,071 39 8.0 1974 24.2 864.3 116.0 12.3 684 37 13.4 1975 25.2 854.5 79.8 10.8 782 31 9.3 1976 26.6 2,172.7 225.5 23.7 805 44 10.4 1977 21.5 2,298.9 326.0 21.7 512 32 14.2 1978 22.4 1,946.5 348.2 18.1 621 44 17.9 1979 1,917.6 408.1 15.3 562 53 17.5 1980 2,486.1 286.9 13.8 784 41 10.3 Source: Appendix Tables 2.1, 2.3, and 2.4. - 145 - Table A.16: Price and Quantum Indexes for Coffee Exports. 1964-68 to 1980 (1964/68 - 100) Average Annual Price Annual Index (based on U.S. $ per ton) Quantum Index Year Coffee Beans Processed Coffee Coffee Beans Processed Coffee (1) (2) (3) (4) 1964-8 100 100 100 100 1969 94 81 116 300 1970 127 93 100 350 1971 97 98 107 383 1972 123 91 109 567 1973 151 116 111 650 1974 165 143 71 616 1975 142 116 81 517 1976 351 236 83 733 1977 584 469 53 533 1978 408 362 64 733 1979 444 354 58 880 1980 412 319 81 685 Source: CACEX. - 146 - quantum exports expanding sevenfold since the mid-1960s. Table A.17 summarizes the evolution of production, domestic consumption and annual additions to stocks. 43. A significant shift in the regional pattern of coffee cultivation has occurred over the past decade, with Parana losing its predominance as the major coffee-producing area (Table A.18). Sao Paulo and Minas Gerais increased their relative shares from 30 and 6 percent, respectively, of coffee production at the beginning of the decade to 47 and 30 percent in the crop year 1977-78. Parana, in contrast, dropped from 60 percent in 1960-70 to a range of 10 to 20 percent in more recent years. 44. The demonstrated vulnerability of the Parana crop to frost induced authorities to promote new planting in Minas Gerais. At the same time, Parana farmers were rapidly shifting into soybean production. The coffee area in Sao Paulo, meanwhile, was being effectively restructured with new varieties and complementary capital investments significantly raising productivity. An important factor stimulating these changes was an outbreak of a potentially devastating coffee leaf rust in 1970. More intensive tree care and a switch from Arabica to Robusta coffees in the more valuable areas was required to save the Brazilian coffee sector. This effort was strongly supported by sub- sidized credit through the IBC. In the future, the competing demand for land use from both soybeans and sugar in Sao Paulo suggests that expansion is likely to be concentrated in Minas Gerais and the states of the Center-West. 45. The significant shift in crop mix in Parana, moving from a highly labor-absorptive and small-farmer crop (coffee) into a more capital-intensive, mechanized crop (soybean) on larger farms, restructured its rural labor market. Instead of permanent tenants and colonos characteristic of the coffee sector, the current productive pattern emphasizes seasonal, nonresident, day-labor trucked out to farms from the many towns in the region, especially during planting and harvest times. 46. Data from the Instituto de Economia Agricola and related surveys in the state of Sao Paulo illustrate the restructuring of the coffee sector from the early 1960s onward. Table A.19 shows that the decline in coffee area in Sao Paulo was offset by rises in productivity per tree, allowing production to maintain itself albeit with considerable weather-related instability. 47. The real prices received by Sao Paulo farmers have trended upward at the rate of about 13.5 percent per year over the past decade and a half. Even in the face of a substantial exchange tax (confisco cambial), the real price to the farmer doubled in 1976-1977, while the harvest fell substantially as a result of heavy frosts. 48. In February 1980 the export price of coffee was US$1.70/pound, i.e., US$224.40 per bag of 60 kg. The net price received by coffee growers was Cr$ 4,545/bag. At the existing rate of exchange (Cr$ 45.31/dollar) the coffee price at the farm level amounted to US$100.30/bag, i.e., 45 percent of the export price. The difference between producer price and export price was made up by two components: (a) a "contribution quota" of 45 percent of the export price; and (b) a 20 percent surcharge calculated on a "base" price of US$115/bag. (This surcharge was created as a temporary offset to December 1979 devaluation.) 147 - Table A.17: Production, Domestic Consumption, Exports and Annual Carry-over of Coffee, 1968 - 78 (Thousands of 60 kilo bags) Domestic Avail for Year Production Consumption Export (1) Exports Carry-Over(2) (1) (2) (3) (4) (5) 1968 17,000 8,751 8,249 19,035 0 1969 20,600 8,745 11,855 19,613 0 1970 11,000 8,888 2,112 17,085 0 1971 24,600 8,831 15,769 18,399 0 1972 24,500 6,712 17,788 19,215 0 1973 14,300 6,733 7,567 19,817 0 1974 28,100 7,505 20,595 13,279 7,316 1975 22,200 6,916 15,284 14,604 680 1976 6,000 6,411 0 15,602 0 1977 16,100 7,036 9,064 10,083 0 1978 20,000 6,811 13,189 12,551 638 (1)Surplus amount available for export generated from this year's production only. Does not include stocks from earlier years. (2)Carry-over here refers only to that carried over from present year's production. Source: Anuario Estatistico do Cafe, Instituto Brasileiro do Cafe, 1978/9 and 1975. - 148 - Table A.18: Regional Pattern of Coffee Production. 1969-70 to 1978-79 (Percent) States Total Crop Years Parana Sao Paulo M. Gerais E. Santo Others x QtY(D 1969/70 59.7 29.6 6.3 2A4 1.9 100 20.6 1970/71 14.6 40.0 27.2 14.5 3.6 100 11.0 1971/72 52.1 39.8 5.3 1.6 1.2 100 24.6 1972/73 39.6 38.4 15.1 4.9 2.0 100 24.5 1973/74 28.7 48.9 14.0 5.6 2.8 100 14.3 1974/75 40.9 34.9 17.4 5.0 1.8 100 28.1 1975/76 52.7 31.5 9.0 4.5 2.3 100 22.2 1976/77 - 31.7 38.3 25.0 5.0 100 6.0 1977/78 11.2 47.2 30.4 7.5 3.7 100 1641 1978/79 23.0 41.5 21.5 11.5 2.5 100 20.1 (')In millions of 60 kito bags. Source: Anuario Estatistico do Cafe, Instituto Brasileiro do Cafe, No. 12 1977/78. - 149 - Table A.l9: Area in Coffee. output, Yields, and Real Prices Rectived by' Coffee-Growers in Sao Paulo, 1960-70 Area Output Productivity Real Prices Received- Year (1,000 ha) (1,000 tons) (kg/l,000 trees) (Cr $/60 kg. bag) (1) (2) (3) (4) 1960 1,478.3 498.0 401 $ 35.99 1961 1,385.9 678.0 580 34.94 1962 1,202.9 312.0 325 31.96 1966 743.3 372.0 536 30.63 1968 683.8 276.0 433 34.35 1970 680.9 258.0 438 62.03 1972 693.8 540.0 909 55.81 1973 734.0 420.0 699 71.k0 1974 800.0 588.0 941 69.30 1975 800.0 420.0 646' 76.51 1976 745.6 112.2 183 150.52 1977 895.0 454.2 665 185.39. 1978 932.0 499.9 70.8. . 112.4& :4/ Deflated by general price index No. 2 Conjuntura Economica. Source: Instituto de Economia Agricola, Sao Paulo. - 150 - 49. A portion of the specific taxes levied on coffee is used to finance the Brazilian Coffee Institute (IBC), a powerful autonomous agency responsible for formulating coffee policy and monitoring its execution. The IBC issues coffee export permits and controls quality standards at different stages in the marketing process. In addition, the IBC administers the minimum price program for coffee, under which the government stands prepared to buy whatever quantities of coffee the producers supply. Minimum prices are usually set at some 80-90 percent of market prices and frequently adjusted. At times the IBC has accumulated substantial stocks of coffee under this program. The IBC does not participate directly in research and technical assistance to coffee growers, but finances both activities as executed by other federal and state agencies. 50. Tables A.20 and A.21 describe the modernization of the Sao Paulo coffee area. In a period of 20 years there occurred an almost complete eradication of the older, less productive nacional and bourbon tree varieties and replacement with the newer novo mundo variety. The average age of coffee trees fell substantially as a result of the eradication programs: over 55 percent of trees in 1958 were 15 years or older, while only 38 percent were in that age bracket by 1974/75. 51. The distribution of capital equipment in the form of modern drying and depulping capacity is still largely restricted to farms of 100 ha or more; however, washing equipment has reached smaJler farm sizes. A large resident- labor component characterizes the work force in this sector. In contrast, nonresident labor currently makes up the majority of the work force in sugar, soybeans and, to some extent, cotton. 52. In summary, the coffee sector has modernized substantially over the past decade, benefitting from various government programs promoting and financing investments in drying, washing, storing and depulping capacity, along with the increased use of fertilizers and the introduction of new tree varieties. Large numbers of high yielding trees were planted in the mid-1970s in replacement of older frost-damaged varieties. These trees are just now coming in to full production. At the same time, many coffee farmers have added sideline activities such as poultry farming and dairy cattle to gain a source of natural fertilizer as well as the additional income accruing to such enterprises. 53. It would appear that the drawinm down of stocks in the 1970s and the rise in prices from 1976 onward did ) generate as large an expansion in new plantings, as occurred in the past, although, as noted, the plantings that did occur are of much higher-yielding varieties. Efficient coffee growing is now more sophisticated and requires expensive coffee-specific equipment. Similarly higher cost inputs are needed on the less fertile soils to which additional plantings would have to move. The lack of a new reasonably fertile frontier, comparable to that which existed in Parana in the 1950s, means that new plant- ings increases wi.ll be constrained when compared to behavior in earlier periods. Finally, the higher cost of land, growing scarcity of labor, and the growth of alternative crops with high returns, such as soybeans, citrus and sugar, imply only a relatively gradual increase in coffee plantings in the future. - 151 - Table A.20: Coffee Varieties Planted and Age Distribution of Coffee Trees in Sao Paulo in 1958 and 1975 A. Varieties (Percent) Variety 1958 1978 National 49.5 - Bourbon 44.7 8.3 Novo Mundco 5.0 78.9 Others 0.8 12.8 Total 100.0 100.0 (Millions of trees) (1,280.0) (704.1) B. Age Age 1958 1974/75 (Harvest Year) 1 - 3 years 13.3 28.0 3 - 8 years 16.6 16.0 8 - 15 years 13.4 18.0 15 - 30 years 25.5 32.0 30 + years 31.2 6.0 Total 100.0 100.0 No. trees (000) 1,474.6 774.9 Source: Instituto de Economia Agricola, Sao Paulo. Table A.-21: Distribution of Capital Equipment and Labor Force Utilization on Sao Paulo Coffee Farms, by Farm Size, 1975 Washing a/ Drying a Depulpinga1 Labor Force (M) Farm Size Capacity-% Capaci % Capacity% Resident Non-Res. Total 3.1 to 30 ha. 30 2 6 29.3 20.8 27.0 30.1 to 50 ha. 12 5 2 14.9 7.8 13.1 51.1 to 100 ha. 3 5 8 12.7 24.4 15.8 100.1 to 300 ha. 22 21 11 20.8 19.6- 20.5 300.1 to 1,000 ha. 28 40 60 15.7 17.1 16.1 1,000 + ha. 5 27 13 6.6 10.3 7.5 100% 100% 100% 100.0% 100.O% 100.0% Total (35,538) (149,089) (41,314) (315,550) (111,524) (427,074) a/Washing capacity in terms of liters of coffee per day; drying capacity in bags per day; depulping capacity in bags per day. Source: Instituto de Economia Agricola. - 153 - 54. Cotton. Raw cotton was the second most important export crop in the mid-1960s, ranking only behiiad coffee. By the late 1970s, however, cotton products as a whole had declined to 2 percent of total exports, and almost all of this was accounted for by cotton manufactures. Table A.22 illustrates the declining role of raw cotton exports as a share of total cotton output. Whereas in 1972 exports of cotton in natura represented 42 percent of the harvest that year, by 1976 this had dropped to practically zero before rebound- ing to about 10 percent. This decline has been the combined result of falling harvests over time, a rapid rise in domestic consumption, and the growth of manufactured cotton export products such as yarn and textile fabrics (Table A.23). 55. While raw cotton exports have declined, both as a proportion of total cotton output and in absolute dollar value, yarn and fabric exports have enjoyed rapid increases in both value and quantity. While the value of raw cotton exports in 1970 was 27 times larger than that of yarn and fabric exports, by the end of the decade this ratio averaged only about one- quarter of yarn and fabric exports. In absolute terms, cotton yarn and fabric exports increased more than fortyfold, from US$6 million to over $260 million from 1964-68 to 1979. Nevertheless, the value of cotton exports, both raw and processed, declined as a share of total exports, as seen in Table A.24. 56. Several factors, including price differentials between raw and processed cotton, the growth in world trade in textile products, the highly subsidized treatment of manufactured exports, the rising costs of cotton cultivation and the existence of more profitable alternative crops (like soybeans), contributed to the shifting balance of export activity in favor of cotton manufactures and away from raw cotton. 57. The average price per metric ton of cotton yarn exports from 1973 onward was roughly double that of raw cotton, while textile fabrics earned more than 2.5 times the price of raw cotton. These large price differentials remained fairly steady throughout the decade, and, when combined with the rapid growth in the world trade of textiles in the 1970s, must have given a strRng stimulus for Brazil to expand her exports of cotton products. Since the country's exports in these product lines were starting from a low base in the early 1970s, there was ample room to exploit the growth of trade without affecting their price or raising undue alarm in the importing countries. Problems did appear later in the decade, however, when textile imports from developing countries met a protectionist backlash in the indus- trial countries.'\ - 154 - Table A.22: Cotton Output, Domestic Consumption and Exports, 1972-78 (1,000 Metric Tons) Relative Shares-/ Raw Cotton Domestic Domestic Cons./ Exports/ Output Consumption Exports Output Output Year 1972 680 325 284 .48 .42 1973 651 379 283 .58 .73 1974 535 397 83 .74 .16 1975 532 420 107 .79 .20 1976 400 445 5 1.11 .01 1977 590 445 35 .75 .06 1978 455 490 44 1.07 .09 a/ When the two shares add up to more than 1.00 stocks are being depleted; when they add up to less than 1.00 stocks are being increased. Source: FGV, Agroanalysis, Vol. 3, No. 5 (5 de junho 1979), p. 24. Table A.23: Cotton Exports by Product, 1964-68 to 1979 1964-68 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 Product A. U.S.$(millions) 1. Rav cotton 107.3 196.0 154.4 137.1 188.7 218.1 90.9 97.8 7.0 40.9 52.8 3.7 2. Cotton yarn 3.3 3.1 5.8 6.8 22.8 45.0 66.6 67.8 81.2 120.3 117.1 153.2 3. Cotton textile fabrics 2.8 4.1 9.0 11.1 25.8 52.6 59.5 49.7 42.1 68.4 67.4 109.4 Total 113.3 203.1 169.2 155.0 237.3 315.7 217.0 215.3 130.3 229.5 237.2 266.3 B. Metric tons ('000) 1. Raw cotton 216.1 439.4 342.8 226.8 284.2 282.9 83.2 107.2 5.6 34.7 44.5 12.0 1 H 2. Cotton yarn 3.4 3.1 5.9 ,.5 19.2 29.4 28.3 41.9 41.0 52.6 52.9 55.1 'n 3. Cotton textile fabrics 2.1 3.0 8.0 8.9 18.4 25.3 19.8 21.0 12.6 21.1 20.9 25.4 C. Ratios 1. Raw cotton $/ yarn & fabric $ 17.80 27.20 10.40 7.70 3.9 2.2 .72 .83 .05 .22 .29 .01 Source: Appendix Tables 2.3 and 2.4 - 156 - Table A.24, Price and Quantum Indexes for Cotton Export Products and Their Shares in Total Exports, 1964-68 to 1978 A. Price Index (1964-8 = 100) Product 1964-8 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 Raw Cotton 100 90 91 122 134 156 221 184 252 238 235 Yarn 100 102 100 107 122 158 241 167 204 235 228 286 Textiles 100 104 86 95 107 159 229 181 255 248 246 329 B. Quantum Index (1964-68 - 100) Product Raw Cotton 100 202 158 104 131 130 39 49 3 .18 24 6 Yarn 100 91 176 194 570 870 839 1241 1213 1559 1567 1632 Textiles 100 144 379 423 874 1203 943 998 600 1007 996 1210 C. Share in Total Brazilian Exports (Percent) Product All Cotton 6.9 9.4 6.7 5.7 6.3. 5.4 2A9 2.6 1.4 2.o 2.0 1.9 Products a/ Raw Cotton 6.4 8.7 5.8 4.8 4.8 3.5 1.? 1.1 0.1 0.3 0.4 0.0 a/ Intludes seed and oil. Source: Appendix Tables 2.1, 2.3 and 2.4. - 157 - 58. Other factors also played a role in shifting resources into cotton manufacturing. Cotton textiles have always been an important traditional industry in Brazil and were successful in acquiring various forms of government protection and subsidization through the years, including one of the highest levels of effective tariff protection, duty-free importation of machinery and other inputs. During the 1970s, the industry also enjoyed substantial export subsidies. 1/ The high level of effective protection on one side, combined with high levels of export subsidies on the other side, strongly suggest that substantial resources have been transferred into this sector. It further suggests that many otherwise marginal, high-cost firms may have been allowed to survive and expand in this protected and subsidized environment. 59. It is frequently the case in so highly protected and subsidized a setting that the domestic resources used per dollar of foreign exchange earned is higher than that used for the unprocessed export crop itself, such as discussed in the soybean case (Chapter III). In the case of cotton, however, this apparently is not so. The rising costs facing cotton farmers (chemical sprays, fertilizers, labor) to deal with disease and production problems with their existing varieties have apparently reduced their competi- tiveness in world markets, so that domestic manufacturers have, in fact, had to pay higher than world market prices for domestic supplies. In contrast to the more productive performance of soybean farmers, cotton farmers would currently find it difficult to compete internationally. 60. Tables A.25 and A.26 document LI-ie declines in output, yields, and relative profitability of cotton in Brazil. Although there were some yield increases in the Center-South from the 1960s to the 1970s, they were not sufficient to offset the decline in other areas of the country, especially the Northeast. Moreover, even the Center-South experienced a sharp productivity decline from 1974 to 1978. Even in the one region where cotton yields increased in the 1970s (Sao Paulo), the gain was not sufficient to allow cotton to compete successfully for land and resources against the more profitable soybean. Table A.27 illustrates the inevitable result of this net profit differential: namely, a rapid decline of land in cotton and a rapid rise in soybean acreage in both Parana and Sao Paulo. 61. Technicians at the Sao Paulo Institute of Agricultural Economics point out that the seed varieties currently used for cotton are increasingly subject to disease. Large quantities of chemical spray and fertilizer are needed to protect plantings with consequent rising costs of production. At the same time, cotton demands large amounts of scarce seasonal labor at crucial periods during the harvest. Although producers have received some portion of the subsidized credit common to agricultural exports, its use does not change the profitability of cotton relative to that of other crops also receiving this credit. What is needed is basic research on more disease- resistant varieties and other breakthroughs that could enhance cotton yields and lower its costs. 1/ As shown earlier in Table 42 of the main text, cotton textiles benefitted from one of the highest levels of export subsidy recorded (around 50 percent). - 158 - Table A.25: Cotton Output, Area Cultivated and Average Yields, 1947-78 A. Northeast Productivity Area Output (Kilograms Period ('000 Hectares) ('000 Tons) per Hectare) 1947-59 1,430.4 437.6 306 1960-69 2,549.5 793.2 311 1970-78 3,168.1 718.1 226 1974-78 3,017.6 660.0 218 B. Center-South 1947-59 1,188.3 737.6 526 1960-69 1,111.0 1,078.9 971 1970-78 1,026.8 1,220.7 1,889 1974-78 814.9 1,031.3 1,265 C. Brazil 1947-59 2,618.7 1,175.2 449 1960-69 3,660.5 1,872.1 511 1970-78 4,194.9 1,938,8 462 1974-78 3,832.5 1,691.2 441 Sources: Basic data from FIBGE and Ministry of Agriculture; reproduced in FGV, Agroanalysis, Vol. 3, No. 5 (1979), p. 17. - 159 - Table A.26: Rates of Profitability of Cotton and Soybeans, Sao Paulo, 1971-79 Rate of Profit (Net Receipts/Total Cost) Cotton Soybean Year 1971-72 .69 1.19 1972-73 .70 2.17 1973-74 .58 1.73 1974-75 .16 0.80 1975-76 .60 1.17 1976-77 .77 1.47 1977-78 .05 1.92 1978-79 .50 1.10 Source: IEA, Sao Paulo; reproduced in FGV, Agroanalysis, op. cit., p. 18 Table A.27: Cotton and Soybean Cultivation in Sao Paulo and Parana 1971/72-1977/78 (in Thousand Hectares) Cotton Cultivation/ Cotton Soybean Soybean Cultivation Sao Sao Sao Year Paulo Parana Paulo Parana Paulo Parana 1971-72 590.3 354.9 100.1 452.7 5.9 .78 1972-73 499.7 293.5 201.7 817.6 2.5 .36 1973-74 395.6 310.0 335.0 1,340.0 1.2 .23 1974-75 368.0 267.0 391.2 1,631,8 .94 .16 1975-76 223.3 181.4 394.0 2,083.3 .56 .08 1976-77 300.1 290.4 449.3 2,200.0 .67 .13 1977-78 345.1 290.0 558.8 2,348.6 .62 .12 Source: FIBGE and Ministry of Agriculture. Reproduced in FGV, Agroanalysis, op. cit., p. 20. - 161 - 67. Table A.28 presents data on production and export volumes. Once again, one notes a steady shift from raw bean exports to those of derivatives (cocoa butter, paste, powder and chocolate liquor). Also of interest is the growth of domestic consumption of the derivative products. A rough idea of domestic consumption is given by subtracting the bean and derivative exports from total production. In the late 1960s the residual was inconsequential, indicating that practically all cocoa output was exported. By the late 1970s, however, this residual had reached 13 to 18 percent of total output. Carry-over stockpiling may account for some part of this increase, but domestic demand had also clearly grown. 1/ 68. Table A.29 shows the relative shift in the export product mix, the share of processed derivatives rising from 24 percent of cocoa export earnings in 1969 to 45 percent in 1978. Within this context, the relative role of cake (paste) and liquor has risen, while that of cocoa butter has fallen. The share of cocoa products in total exports declined until 1973, but then rose to average over 6 percent in 1977-1979 (Table A.30). As shown in Table A.31, this pattern was paralleled by the decline and subsequent rise of cocoa prices. From 1970 to 1977, cocoa prices rose more than sixfold. Price thus accounted for the major proportion of the increase in total export earnings; while export earnings increased about 8 times from 1970-71 to 1978, the increase in export volume was only 40 percent. Given the long gestation period associated with the perennial nature of cocoa production, as in the case of coffee, a lagged response is to be expected. However, in contrast to coffee, which experienced no marked increase in quantum from its normal production levels of the early 1970s, cocoa output did increase significantly. 69. Table A.32 points out the improving internal terms of trade enjoyed by cocoa farmers through most of the decade. Prices received rose signifi- cantly more rapidly than the prices paid for inputs. As a result of the favorable terms of trade, area planted rose, and average yields increased substantially (Table A.33). The PROCACAU program, launched in 1976-77, is designed to iimprove productivity and raise tne level of annual production to 700,000 metric tons by 1985. This is to be accomplished through a 300,000 hectare expansion of new plantings and the renovation of 150,000 hectares of current production. By 1979, 145,000 new hectares had been planted or reno- vated under the program. 70. Cocoa cultivation is highly concentrated, 90 percent of area planted and 95 percent of output occurring in the state of Bahia. The PROCACAU program is currently promoting a greater relative expansion in other areas, particularly Para and Rondonia. It is noteworthy that recent yield improvements have been 1/ The 1978 Statistical Yearbook of Cocoa reports that approximately 10 per- cent of total Bahian bean production was processed for the local market. This represented roughly 30 percent of the total amount processed, the remaining 70 percent being exported. - 162 - Table A.28: Production and Export of CocoB Beans and Derivatives, 1965/6 to 1977/8 (Thousands of metric tons) Crop Year Productional Bean Exportsa/ Derivative Exports-/ 1965/66 176 112 56 1966/67 176 114 56 1967/68 145 76 49 1968/69 165 120 42 1969/70 201 120 51 1970/71 180 119 56 1971/72 167 102 73 1972/73 160 83 70 1973/74 245 130 87 1974/75 269 177 79 1975/76 260 129 82 1976/77 234 108 98 1977/78 283 134 98 a/ Production data are for the Brazilian agricultural year,which ends on March 31, and differ slightly from the annual data given in the Statistical Appendix and in Table A.33. Exports are for calendar year (i.e. 1977/78 refers to exports recorded in calendar year 1978). b/ Derivative exports in terms of beans. Source: Anuario Estatistico do Cacau, 1978, pp. 30, 130. - 163 - Table A.29: Relative Export Value Shares of Cocoa Products 1969-78 (Percent) Cocoa Derivatives Subtotal T6tal Value Years Beans Butter Liquor Cake Others DerivatiVes (U.S. millions) 1969 76.1 21.8 - 1.9 0.2 23.9 $138.9 1970 70.6 25.4 0.2 3.3 0.5 29.4 110.0 1971 67.2 26.5 0.1 5.2 1.1 32.9 91.9 1972 59.0 33.1 0.1 6.3 1.5 41.0 100.0 1973 59.6 32.1 3.1 4.4 0.8 40.4 148.5 1974 62.1 29.6 4.1 3.4 0.8 37.9 338.3 1975 67.4 18.4 8.5 3.7 2.0 32.6 327.1 1976 61.3 19.6 11.8 5.8 1.5 38.7 357.1 1977 56.2 12.5- 21.4 8.9 1.0 43.8 774.5 1978 54.4 10.0 23.3 10.0 2.3 45.5 834.1 Source: CEPLAC, Anuario Estatistico do Cacau 1978, p. 136 Table A.30: Relative Share of Cocoa Products in Value of Total Exports, 1969-79 (Percent) Year Year Year 1969 6.0 1973 2.4 1977 6.4 1970 4.0 1974 4.3 1978 6.6 1971 3.2 1975 3.8 1979 6.2 1972 2.5 1976 3.5 Source: Appendix Tables 2.1 and 2.3. - 164 - Table A.31: Export Price Indexes for Cocoa Beans, 1970-1980 (1970 = 100) Year 1970 100 1971 80 1972 89 1973 165 1974 249 1975 192 1976 262 1977 624 1978 522 1979 478 1980 364 Source: Appendix Tables 2.3 and 2.4. - 165 - Table A.32: Indexes of Prices Received and Price Paid by Cocoa Farmers, 1966-1980 (1966=100) Prices Prices Paid Ratio Year Received for Inputs Prices'Rec./Prices Paid 1966 100 100 1.00 1968 217 137 1.58 1970 264 196 1.35 1972 342 264 1.30 1973 738 335 2.20 1974 1,127 546 2.06 1975 1,011 716 1.41 1976 2,250 976 2.31 1977a/ 6,271 1,426 4.40 1978-/ 6,282 n.a. n.a. 1979a/ 8.133 n,a, n.a. a/ The weights used to calculate the index of prices received were changed beginning in 1977, creating a discontinuity in this index and in the calculated terms of trade. Source: FGV, Conjuntura Economica. - 166 - Table A.33: Cocoa--Area P14tcd aYnd Harvested, Production and Average Yields, Crop Years 1969/70-1979/80 Average Crop Area Area Yields (kg per Year Planted Harvested Production ha harvested) 1969/70 444 197 444 1970/71 448 219 488 1971/72 n.a. 200 n.a. 1972/73 416 196 471 1973/74 515 165 319 1974/75 442 451 282 624 1975/76 458 407 232 569 1976/77 477 413 250 605 1977/78 507 444 284 640 1978/79 5422/ 454 336 741 1979/80 5842/ n.a. 228 n.a. p/ Projected. Source: Appendix Tables 1.5a, 1.7a, and l.9a; Data on area planted from Anuario Estatistico dc Cacau. - 167 - achieved in all the cocoa regions with especially high yields in Rondonia, vrhich has been a focal point in the PROCACAU program. By the end-year of t:he PROCACAU program in 1985, Rondonia is to have 100,000 new hectares planted, Para 50,000, Bahia 170,000 and Espirito Santo 20,000. This projected rapid expansion of land planted to cocoa raises the question of whether Brazil's output may not reach such levels as to depress world prices (already projected to weaken) by the early or mid-1980s. Officials in CEPLAC tend to discount this possibility on the belief that African production is unlikely to achieve substantial increases in output or productivity. 71. Table A.34 compares the prices of cocoa beans with those of its derivatives during the 11-year period 1967-1977. Paralleling the case of soybeans, it appears that the foreign exchange receipts from the export of processed butter and pascte were less than what would have been earned from the export of the raw bean equivalent during nine of the eleven years. Moreover, this calculation does not take into account the costs of processing. Thus some question is raised as to whether the effort to increase investment in processing facilities, achieved with substantial credit subsidies and fiscal incentives, was an efficient utilization of resources. Furthermore, only 60 to 65 percent, on the average, of installed processing capacity was effectively utilized in the four largest processing plants in Bahia from 1974 to 1978. 1/ 72. In contrast to butter and paste, cocoa liquor exports generally did earnt more gross foreign exchange than would have been earned by exporting the bean content used in its processing. Appropriately, this derivative was the most rapidly growing component of cocoa product exports, increasing its relative share from practically nil in the early 1970s to 23 percent of the total earnings of cocoa export products in 1978. The costs of processing and the investment involved, however, are not considered here, for lack of information. 1/ This finding was reported in a private study conducted by the Grupo de Informacao Agricola of the Getulio Vargas Foundation. - 168 - Table A.34: Ratios of Average Annual ExPort Prices for Cocoa Beans and Derivatives, 1967-77 Simple Ratios a/ Combined Ratio AI Weighted Ratios b/ Pb Pb Pl Pb + Pp .376Pb + .41Pp .80P1 PC PC PC PC Pc PC 1967 1.85 0.25 1.59 2.10 0.80 1.28 1968 2.31 0.24 1.32 2.55 0.97 1.05 1969 2.15 0.30 - 2.45 0.93 - 1970 2.25 0.33 1.48 2.58 0.98 1.19 1971 2.22 0.47 1.48 2.69 1.03 1.18 1972 2.09 0.44 1.35 2.53 0.97 1.08 1973 1.84 0.24 0.96 2.08 0.79 0.77 1974 2.15 0.30 1.07 2.40 0.93 0.86 1975 2.24 0.49 1.28 2.66 1.01 1.02 1976 1.90 0.52 1.29 2.42 0.93 1.03 1977 1.24 0.96 1.11 2.19 0.86 0.89 a/ All prices refer to average annual export price (F.O.B.) in U.S. dollars. (1) Pc is price of cocoa beans. (2) Pb is price of cocoa butter. (3) Pc is price of cocoa paste or cake. (4) P1 is price of cocoa liquor. b/ The technical coefficients in the weighted ratios in Columns 5 and 6 (i.e., .376, .41, and .80) refer to the cocoa bean content in cocoa butter (.376); in cocoa paste or cake (.41) and in cocoa liquor (.80). Source: Anuario Estatistico do Cacau, 1978, p. 140. - 169 - STATISTICAL APPENDIX Page Table 1.1 Value of Principal Crops, by Crop and Category, 1952-54, 1966, 1973 and 1977 ........................... 172 1.2a Value of Principal Crops by Crop and Region, 1966 ....... 173 1.2b Value of Principal Crops by Crop and Region, 1973 ....... 174 1.2c Value of Principal Crops by Crop and Region, 1977 ....... 175 1.3 Regional Importance of Principal Crops, by Value, 1966, 1973 and 1977 ................................... 176-178 1.4a Area Cultivated -- Major Crops, 1935-1965 ............... 179-181 1.4b Indexes of Area Cultivated, Major Crops, 1955-1965 ...... 182 1.5a Area Harvested - Major Crops, 1966-1979 ............. ,. i83 1.5b Indexes of Area Harvested of Major Crops, 1966-1979 ..... 184 1.6 Regicnal Importance of Principal Crops by Area Harvested, 1966, 1973 and 1977 ....................... 185-187 1.7a Production of Major Crops, 1935-1980 .................... 188 1.7b Indexes of Major Crop Production, 1955-1965 ......189 1.7c Indexes of Production of Major Crops, 1966-1979 ...... 190 1.8a Average Yields -- Major Crops, 1935-1965 ........ 191 1.8b Indexes of Average Yields, Major Crops, 1955-1965 .....192 1.9a Average Yields - Major Crops, 1966-1979 ................. 193 l19b Indexes of Crop Yields for Major Crops, 1966-1979 .. 194 1.10 Average Annual Rates of Yields Change by Crop and Region, 1948-1976 ..........................195-197 1.11 Size of Livestock Herds, 1920-1979 ........ ............. 198 1.12 Estimated Milk Production, by Region, 1966-1976 ........ 199 1.13 Livestock Slaughter, 1975-1979 .................... 200 2.0 Imports by Economic Destination, 1975-1978 ................. 201 2.1 Exports of Agricultural Origin, by Customs Category, 1965-1979 (FOB)..................................... 202 2.2 Imports of Agricultural Origin, by Customs Category, 1965-1979 (CIF) ................................. 203 2.3 Principal Crop-Based Export Products, FOB, 1967-1980 ... 204 2.4 Volume of Principal Crop-Based Exports, 1967-1980 ...... 205 2.5 Agriculture-based Exports Comprising at Least 1 Percent of Total Exports by Rank, Order and Percent for Selected Years, 1964-68 to 1977 .......................206-207 3.0 Aggregate Indexes of Agricultural and Food Prices, 1967-1980 ............................................ 208 3.Oa National Indexes of Real Prices, Received by Farmers, Selected Crops, 1966-1980 ............................. 209 3.Ob National Producer Indexes, 1966-1980 ................... 210 3.la Average Producer Prices During Harvest Period for Selected Crops, Crop Years 1967/68-1978/79 ........... 211 3.1b Average Real Producer Prices During Harvest Period for Selected Crops, Crop Years 1967/68-1978/79 ............ 212 3.1c Index of Real Average Producer Prices During Harvest Period for Selected Crops, Crop Years 1967/68-1978/79 213 3.2a Minimum Prices for Selected Crops, Crop Years 1967/68-1980/81 ...................................... 214 - 170 - STATISTICAL APPENDIX (Continued) Page Table 3.2b Real Minimum Prices for Selected Crops, Crop Years 1967/68-1979/80 ............. ..............................215 3.2c Index of Real Minimum Prices for Selected Crops, Crop Years 1967/68-1979/80 ........................... 216 3.3a Average Wholesale Prices During Marketing Period for Selected Crops, Crop Years 1967/68-1977/78 ........... 217 3.3b Average Wholesale Prices in Real Terms During Marketing Period for Selected Crops, Crop Years 1967/68-1977/78 218 3.3c Index of Real Average Wholesale Prices During Marketing Period for Selected Crops, Crop Years 1967/68-1977/78 219 3.4a Average Retail Prices During Marketing Period for Selected Agricultural Products, 1970/71-1977/78 220 3.4b Average Retail Prices in Real Terms During Marketing Period for Selected Agricultural Products, 1970/71-1977/78 ... ................................. 221 3.4c Index of Real Average Retail Prices During Marketing Period for Selected Agricultural Products, 1970/71-1977/78 .....................................222 4.1 Net Value of Agricultural Output and Total Credit to Agriculture, 1969-1979 ............................. 223 4.2 Total Credit to Agriculture by Subsector, 1969-1979 ... 224 4.3 Total Agricultural Credit, by Function, 1969-1979 ..... 225 4.4 Crop Credits to Producers and Cooperatives, National System of Rural Credit, by Crop, 1975-1979 ........... 226 4.5a Crop Credits to producers and Cooperatives, by Type and Region, 1977-1979 ...................................227 4.5b Livestock Credits to Producers and Cooperatives, by Type and Region, 1977-1979 ............................. .228 4.5c 'Total Rural Credits to Producers and Cooperatives, by Type and Region, 1977-1979 ..........................229 4.6 Bank of Brazil and Private Commercial Bank Loans Outstanding to Agriculture, End-of-Year 1971-1979 230 4.7 Crop Credits to Producers and Cooperatives from Bank of Brazil, by Crop, 1975-1979 ............................. 231 4.8a Credits Conceded Under Minimum Price Program, Center- South, by Crop and Type of Beneficiary, 1967/68-1979 232 4.8b Distribution of Credits Under Minimum Price Program, Center-South, 1967/68-1978/79 ....................... 233 4.9a Credits Conceded Under Minimum Price Program, North- Northeast, by Crop and Type of Beneficiary, 1968/69-1979 ........................................234 4.9b Distribution of Credits Under Minimum Price Program, North-Northeast, 1968/69-1979 ........................ 235 4.10 Real Financing Under Minimum Price Program, by Region and Major Crop, 1967/68-1978/79 .. ..................... 236 4.11 Volumes of Major Crops Financed Under Minimum Price Credit Program, 1968/69-1978/79 ..................... 237 4.12 Crop Acquisitions Under Minimum Price Program, by Region, 1973/74-1978/79 ........................... 238 - 171 - STATISTICAL APPENDIX (Continued) Page Table 4.13 Real Value of Crop Acquisitions Under Minimum Price Program by Region, 1973/74-1979 ....................... 239 4.14 Volume of Crops Acquired Under Minimum Price Program, 1973/74-1979 .......................................... 240 4.15 Crops Acquired Under Special Purchase Program, by State or Territory, 1980 .......................... 241 5.0 Production of Improved Seeds, Selected Crops, 1974/75- 1979/80 ............................................. 242 5.1 Apparent Consumption of Fertilizers, 1960-1980 243 5.2 Distribution of Fertilizer Consumption by Crop, 1975-1977 ............................................. 244 5.3 Distribution of Fertilizer Consumption by Region, 1960/64-1978 ........ ..................... 244 5.4 Indexes of International and Domestic Fertilizer Prices, 1966-1976 . ................................. 245 5.5 Apparent Consumption of Insecticides, Fungicides and Herbicides, 1970-1979 ............................. 246 5.6 National Static Storage Capacity, by Type of Unit, 1975-1979 .............................. ............... 247 5.7 Regional Distribution of Storage Capacity, 1975-May 1979 247 5.8 Indexes of Real Farm Land and Labor Prices, 1966-1979 . 248 5.9 Indexes of Real Cropland Rents by States and Territories, 1967-1979 ....................................... 249 5.10 Indexes of Real Rents on Livestock Land, by States and Territories, 1967-1979 ................................ 250 5.11 Indexes of Real Sales Prices for Cropland, by States and Territories, .1967-1979 .............................. .. 251 5.12 Indexes of Real SaLes Prices for Pasture Land, by States and Territories, 1967-1979 ............................ 252 5.13 Ratios of Cash Sales Price to Cash Rents, Cropland, by States and Territories, 1966-1979 ........... . ..... 253 5.14 Growth Rates of Farm Cash Sales Prices and Rents, by States, 1970-79 ....................................s 254 5.15 ProduLCtion of Improved Seed, 1974/75-1980/81 ........... 255 6.1 Annual Per Capita Wheat Consumptlon, by State, for Selected Years, 1970-1978 ............................ 256 6.2 Relationship Between Mill Delivered Price and Costs of Imported and Domestically ProdUad Wheat, 1967-1979 257 7.1 Agricultural Land and Land Under Crops, by Region, 1950-1975 ...................................... 258 7.2 Size Distribution of Farms, 1960, 1970 and 1975 .......... 259 7.3 DistrIbution of Farms by Status of Producers, 1970 and 1975 ......................................... 260 Table 1.1: Value of Principal Crops, by Crop and Category 1952-54, 1966, 1973 and 1977 (Millions of cruzeiros) --------Average 1952-54 ---------- --------------1966------------------ --------------1973 --------------- -------------1977---------------- Value of % of % of Value of % of % of Value of % of % of Value of % of % of Category/Crop Output Category Total Output Output Category Total Output Output Category Total Output Output Category Total Output Cereals 25202 100.0 29.5 1832 100.0 30.0 11031 100.0 25.6 44178 100.0 20.4 Wheat 2847 11.3 3.3 156 8.5 2.5 1494 13.5 3.5 6112 13.8 2.8 Rice 11623 46.1 13.6 865 47.2 14.2 4413 40.0 10.2 16320 36.9 7.5 Corn 10732 42.6 12.6 811 44.3 13.3 5124 46.5 11.9 21746 49.2 10.0 Root CroDs 8810 100.0 10.3 954 100.0 15.6 5484 100.0 12.7 29506 100.0 13.6 Manioc 5469 62.1 6.4 473 49.6 7.7 3464 63.2 8.0 23114 78.3 10.7 kite potatoes 2111 24.0 2.5 222 23.2 3.6 1088 19.8 2.5 4126 14.0 1.9 Peanuts 749 8.5 0.9 182 19.1 3.0 580 10.6 1.3 1097 3.7 0.5 Sweet potetoes 481 5.5 0.6 77 8.1 1.3 352 6.4 0.8 1169 4.0 0.5 Black Beans 4702 100.0 5.5 578 100.0 9.5 4317 100.0 10.0 13970 100.0 6.5 Fruits and vegetables 4499 100.0 5.3 533 100.0 8.7 3380 100.0 7.8 19013 100.0 8.8 Pineapple 235 5.2 0.3 24 4.5 .4 225 6.7 0.5 732 3.8 0.3 Oranges 1073 23.8 1.3 122 22.9 2.0 1295 38.3 3.0 7678 40.4 3.5 Bananas 1981 44.0 2.3 229 43.0 3.7 937 27.7 2.2 5737 30.2 2.6 Tomatoes 608 13.5 0.7 104 19.5 1.7 588 17.4 1.4 3631 19.1 1.7 Onions 602 13.4 0.7 54 10.1 0.9 335 9.9 0.8 1235 6.5 0.6 ro (Subtotal; Domestic food crops) (43213) (100.0) (50.7) (3897) (63.8) (24212) (56.2) (106667) (49.3) Export and industrial crops 42099 100.0 49.3 2211 100.0 36.2 18884 100.0 43.8 109910 100.0 50.7 Soybeans 189 0.4 0.2 87 3.9 1.4 5566 29.5 12.9 37427 34.1 17.3 Cocoa 2126 5.1 2.5 98 4.4 1.6 1005 5.3 2.3 9163 8.3 4.2 Coffee 23423 55.6 27.5 645 29.2 10.6 3989 21.1 9.3 28447 25.9 13.1 Tobacco 1100 2.6 1.3 94 4.3 1.5 617 3.3 1.4 3438 3.1 1.6 Sisal 241 0.6 0.3 48 2.2 0.8 451 2.4 1.0 650 0.6 0.3 Sugarcane 5277 12.5 6.2 657 29.7 10.8 3177 16.8 7.4 18487 16.8 8.5 Cotton 9287 22.0 10.9 512 23.1 8.4 3888 20.6 9.0 11389 10.4 5.3 Coconut 476 1.1 0.6 70 3.2 1.1 191 1.0 0.4 909 0.8 0.4 Total 89312 100.0 6108 100.0 43096 100.0 216577 100.0 Source: FIBGE Table 1.2a: Value of Principal Crops by Crop and Region, 1966 NMil ions Cr$) ---------North---------- -------Northeast-------- --------Southeast------- --------- South-------------------Center-West----- -----------Brasil-------- Value of % of National Value of % of National Value of % of National Value of % of National Value of % of National Value of % of National Category/Crop Output Crop Total Output CroT Total Output Crop Total Output Crop Total Output Crop Total Output Crop Total Cereals 15 0.8 231 12.6 623 34.0 701 38.3 262 14.3 1832 100.0 Wheat - - - - 2 1.3 154 98.7 - - 156 100.0 Rice 10 1.2 105 12.1 316 36.5 225 26.0 209 24.2 865 100.0 Corn 5 0.6 126 15.4 305 37.6 322 39.7 53 6.5 811 100.0 Roots 16 1.7 232 24.4 370 38.9 295 30.8 41 4.2 954 100.0 Manioc 16 3.4 196 41.4 87 18.4 138 29.2 36 7.6 473 100.0 White potato - - 4 1.8 110 49.5 107 48.2 1 .5 222 100.0 Peanuts - - 1 .5 163 89.6 15 8.2 3 1.6 182 100.0 Sweet potato - - 31 40.2 10 13.0 35 45.5 1 1.3 77 100.0 Beans 3 0.5 200 34.6 153 26.5 170 29.4 52 9.0 578 100.0 Fruits and vege:s.bles 7 0.9 143 26.8 304 57.2 64 12.0 15 3.0 533 100.0 Pineapple 1 4.2 9 37.5 10 41.7 3 12.5 1 4.2 24 100.0 Oranges 2 1.6 25 20.5 75 61.5 17 13.9 3 2.5 122 100.0 Bananas 3 1.3 86 37.5 120 52.4 10 4.4 10 4.4 229 100.0 Tomatoes 1 1.0 13 12.5 84 80.8 5 4.8 1 1.0 104 100.0 Onions - - 10 18.5 15 27.8 29 53.7 - - 54 100.0 (Subtotal: Domestic (41) (1.0) (806) (20.7)- (1450) (37.3) (1230) (31.5) (370) (9.5) (3897) 100.0 food crops) Export and industrial crops 10 0.4 672 30.4 955 43.2 528 23.8 46 2.1 2211 100.0 Soybeans - - - - 4 4.6 83 95.4 - - 87 100.0 Cocoa 1 1.0 94 95.9 3 3.1 - - - - 98 100.0 ,offee - - 17 2.6 342 53.0 268 41.5 18 2.8 645 100.0 Tobacco I 1.0 27 28.7 9 9.6 53 56.4 4 4.3 94 100.0 Sisal - - 48 100.0 - - - - - - 48 100.0 Sugarcane 1 0.2 226 34.4 377 57.4 43 6.5 10 1.5 657 100.0 Cotton 6 1.2 195 38.1 216 42.2 81 15.8 14 2.7 512 100.0 Coconut 1 1.4 65 92.9 4 5.7 - - - - 70 100.0 Total 51 0.8 1478 ',4.2 2405 39.4 1758 28.7 416 6.8 6108 100.0 Source: FIBGE Table 1.2b: Value of Principal Crops, by Crop and Region,-1973 (Millions of Cruzeiros) ----------North---------- ----------Northeast------ --------Southeast-------- ----------South--------- -------Center-West------- ---------Brazil---------- Value of % of National Value of % of National Value of % of National Value of % of National Value of % of National Value of 7 of National Category/Crop Outout Crop Total Outout Crop Total Output Crop Total Output Cron Total Output Crop Total Output Crop Total Cereals 96 0.9 1153 10.5 3008 27.3 5178 46.9 1596 14.5 11031 100.0 Wheat - - - - 25 1.7 1460 97.7 9 0.6 1494 100.0 Rice 69 1.6 471 10.7 1146 26.0 1478 33.5 1249 28.3 4413 100.0 Corn 27 0.5 682 13.3 1837 35.9 2240 43.7 338 6.6 5124 100.0 Roots 154 2.8 1638 29.9 1313 23.9 2010 36.7 369 6.7 5484 100.0 Manioc 151 4.4 1488 43.0 429 12.4 1123 32.4 273 7.9 3464 100.0 White potato - - 32 2.9 500 46.0 551 50.6 5 0.5 1088 100.0 Peanuts - - 12 2.1 349 60.2 134 23.1 85 14.7 580 100.0 Sweet potato 3 0.9 106 30.1 35 9.9 202 57.4 6 1.7 352 100.0 Beans 16 0.4 1646 38.1 1139 26.4 1231 28.5 285 6.6 4317 100.0 Fruits and vegetables 82 2.4 752 22.2 2000 59.2 413 12.2 133 3.9 3380 100.0 Pineapple 49 21.8 3 1.3 145 64.4 15 6.7 13 5.8 225 100.0 O-anges 11 0.8 136 10.5 1024 79.1 98 7.6 26 2.0 1295 100.0 Bananas 19 2.0 406 43.3 339 36.2 106 11.3 67 7.2 937 100.0 Tomatoes 3 0.5 149 25.3 361 61.4 49 8.3 26 4.4 588 100.0 Onions - - 58 17.3 131 39.1 145 43.3 1 0.3 335 100.0 (Subtotal: Domestic food crops) (348) (1.4) (5189) (21.4) (7460) (30.8) (8832) (36.5) (2383) (9.8) (24212) (100.0) Export and industriel crops 28 0.1 5197 27.5 5743 30.4 7307 38.7 609 3.2 18884 100.0 Soybeans - - - - 356 6.4 5028 90.3 182 3.3 5566 100.0 Cocoa 6 0.6 965 96.0 34 3.4 - - - - 1005 100.0 Coffee 1 0.0 97 2.4 2692 67.5 1166 29.2 33 0.8 3989 100.0 Tobacco 8 1.3 141 22.9 51 8.3 403. 65.3 14 2.3 617 100.0 Sisal - - 451 100.0 - - - - - - 451 100.0 Sugarcane 8 0.3 1399 44.0 1575 49.6 145 4,6 50 1.6 3177 100.0 Cotton 1 0.0 1964 50.5 1028 26.4 565 14.5 330 8.5 3888 100.0 Ccconut 4 2.1 180 94.2 7 3.7 - - - - 191 100.0 Total 376 0.9 10386 24.1 13203 30.6 16139 37.4 2992 6.9 43096, 100.0 Source: FIBGE Table 1.2c: Value of Principal Crops,by Crop and Region, 1977 (Millions of Cruzeiros) -North---------- -------Northeast-------- ------ Soutiieast--------- -------- South----------- -------Center-West------ --------- Brazil--------- Value of % of National Value of % of National Value of % of National Value of % of National Value of % of National Value of 7. of National Category/Crop Output Crop Total Output Crop Total Output Crop Total Output Crop Total Output Crop Total Output Crop Total Cereals 710 1.6 4670 10.6 9881 22.4 21983 49.8 6935 15.7 44178 100.0 Wheat - - - - 260 4.3 5770 94.4 82 1.3 6112 100.0 Rice 527 3.2 2280 14.0 2698 16.5 6081 37.3 4734 29.0 16320 100.0 Corn 183 0.8 2390 11.0 6923 31.8 10132 46.6 2119 9.7 21746 100.0 Roots 1292 4.4 10001 33.9 5302 18.0 10132 34.3 2779 9.4 29506 100.0 Manioc 1284 5.6 9529 41.2 2585 11.2 7083 30.6 2633 11.4 23114 100.0 White potato - - 54 1.3 1802 43.7 2265 54.9 5 0.1 4126 100.0 Peanuts - - 32 2.9 754 .68.7 175 16.0 136 12.4 1097 100.0 Sweet potato 8 0.7 386 33.0 161 13.8 609 52.1 5 0.4 1169 100.0 Beans 184 1.3 4249 30.4 3569 25.5 4712 33.7 1256 9.0 13970 100.0 Fruits and vegetables 267 1.4 4486 23.6 10982 57.8 2350 12.4 929 4.9 19013 100.0 Pineapples 26 3.6 366 50.0 267 36.5 46 6.3 28 3.8 732 100.0 Oranges 49 0.6 704 9.2 5990 78.0 812 10.6 124 1.6 7678 100.0 Bananas 170 3.0 2287 39.9 2087 36.4 586 10.2 607 10.6 5737 100.0 Tomatoes 22 0.6 883 24.3 2052 56.5 504 13.9 170 4.7 3631 100.0 Onions - - 246 19.9 586 47.4 402 32.6 - - 1235 100.0 (Subtotal: Domestic food crops) (2453) (2.3) (23406) (21.9) (29734) (27.9) (39177) (36.7) (11899) (11.2) (106667) (100.0) Export and industrial crops 293 0.3 23087 21.0 40395 36.8 42134 38.3 4001 3.6 109910 100.0 Soybeans - - 1 0.0 2340 6.3 32749 87.5 2336 6.2 37427 100.0 Cocoa 78 0.9 8774 S:%.8 312 3.4 - - - - 9163 100.0 Coffee 84 0.3 982 3.5 23499 82.6 3422 12.0 459 1.6 28447 100.0 Tobacco 58 1.7 544 15.8 133 3.9 2680 78.0 24 0.7 3438 100.0 Sisal - - 650 100.0 - - - - - - 650 100.0 Sugarcane 47 0.3 7290 39.4 10256 55.5 728 3.9 167 0.9 18487 100.0 Cotton 6 0.1 3980 34.9 3832 33.6 2555 22.4 1015 8.9 11389 100.0 Coconut 20 2.2 866 95.3 23 2.5 - - - - 909 100.0 Total 2746- 1.3 46493 21.5 70129 32.4 81311 37.5 15900 7.3 216577 100.0 Source: FIBGE - 176 - Table 1.3: Regional Importance of Principal Crops, by Value, 1966, 1973 and 1977 (Millions of Cruzeiros) - ---------1966 -------------------1973 -------------------1977--------- Value of % of Regional Value of % of Regional Value of % of Regional Category/Crop Output Total Output Total Output Total North Domestic food crops 39.69 63.2 348 92.6 2453 89.3 Rice 10.09 16.1 69 18.4 527 19.2 Corn 5.12 8.2 27 7.2 183 6.7 Manioc 16.05 25.6 151 40.2 1284 46.8 Beans 2.92 4.7 16 4.3 184 6.7 Pineapple 0.51 0.8 49 13.0 26 .0.9 Oranges 1.70 2.7 11 2.9 49 1.8 Bananas 2.46 3.9 19 5.1 170 6.2 Other 0.84 1.3 6 1.6 30 1.1 Export and industrial crops 23.09 36.8 28 7.4 293 10.7 Cocoa 0.48 0.8 6 1.6 78 2.8 Tobacco 1.29 2.1 8 2.1 58 2.1 Sugarcane 0.92 1.5 8 2.1 47 1.7 Coconut 0.57 0.9 4 1.1 20 0.7 Other 19.83 31.6 2 0.5 90 3.3 Total 62.78 100.0 376 100.0 2746 100.0 Northeast Domestic food crops 806.46 54.3 5189 50.0 23406 50.3 Rice 104.78 7.1 471 4.5 2280 4.9 Corn 125.87 8.5 682 6.6 2390 5.1 Manioc 196.27 13.2 1488 14.3 9529 20.5 Sweet potato 31.32 2.1 106 1.0 386 0.8 Beans 199.77 13.5 1646 15.8 4249 9.1 Oranges 25.27 1.7 136 1.3 704 1.5 Bananas 85.92 5.8 406 3.9 2287 4.9 Tomatoes 13.26 0.9 149 1.4 883 1.9 Other 24.00 1.6 105 1.0 698 1.5 Export and industrial crops 678.52 45.7 5197 50.0 23087 49.7 Cocoa 94.21 6.3 965 9.3 8774 18.9 Coffee 16.66 1.1 97 0.9 982 2.1 Tobacco 26.92 1.8 141 1.4 544 1.2 Sisal 48.30 3.3 451 4.3 650 1.4 Sugarcane 226.45 15.2 1399 13.5 7290 15.7 Cotton 200.85 13.5 1964 18.9 3980 8.6 Coconut 65.13 4.4 180 1.7 866 1.9 Total 1484.98 100.0 10386 100.0 46493 100.0 - 177 - page 2 - ---------1966 -------------------1973 ---------- --------1977 ---------- Value of % of Regional Value of % of Regional Value of % of Regional Categoiry/Crop Output Total Output Total Output Total Southeast Domestic food crops 1474.83 60.7 7460 56.5 29734 42.4 Rice 315.99 13.0 1146 8.7 2698 3.8 Corn 305.31 12.6 1837 13.9 6923 9.9 Manioc 87.16 3.6 429 3.2 2585 3.7 White potato 110.45 4.5 500 3.8 1802 2.6 Peanuts 163.54 6.7 349 2.6 754 1.1 Beans 152.99 6.3 1139 8.6 3569 5.1 Pineapple 9.86 0.4 145 1.1 267 0.4 Orailges 75.58 3.1 1024 7.8 5990 8.5 Bananas 120.16 4.9. 339 2.6 2087 3.0 Tomatoes 84.25 3.5 361 2.7 2052 2.9 Onions 15.10 0.6 131 1.0 586 0.8 Other 34.44 1.4 60 0.5 421 0.6 Export and industrial crops 956.22 39.3 5743 43.5 40395 57.6 Soybeans 3.90 0.2 356 2.7 2340 3.3 Coffee 342.28 14.1 2692 20.4 23499 33.5 Sugarcane 377.32 15.5 1575 11.9 10256 14.6 Cotton 216.44 8.9 1028 7.8 3832 5.5 Other 16.28 0.7 92 0.7 468 0.7 Total 2431.05 100.0 13203. 100.0 70129 100.0 South Domestic food crops 1262.59 70.5 8832 54.7 39177 48.2 Wheat 153.82 8.6 1460 9.0 5770 7.1 Rice 225.19 12.6 1478 9.2 6081 7.5 Manioc 321.64 18.0 2240 13.9 10132 12.5 White potato 137.38 7.7 1123 7.0 7083 8.7 Sweet potato 107.39 6.0 551 3.4 2265 2.8 Beans 169.73 9.5 1231 7.6 4712 5.8 Onions 29.21 1.6 145 0.9 402 0.5 Other 83.42 4.7 402 2.5 2123 2.6 Export and industrial crops 527.15 29.5 7307 45.3 42134 51.8 Soybeans 83.04 4.6 5028 31.2 32749 40.3 Coffee 267.45 14.9 1166 7.2 3422 4.2 Tobacco 52.98 3.0 403 2.5 2680 3.3 Cotton 81.10 4.5 565 3.5 2555 3.1 Sugarcane 42.50 2.4 145 0.9 728 0 Total 1789.75 100.0 16139 100.0 81311 100.0 - 178 - page 3 - ---------1966 -------------------1973 -------------------1977--------- Value of % of Regional Value of % of Regional Value of % of Regional Output Total Output Total Output Total Center-West Domestic food crops 370.99 89.0 2383 79.6 11899 74.8 Rice 209.32 50.2 1249 41.7 4734 29.8 Corn 52.67 12.6 338 11.3 2119 13.3 Manioc 36.17 8.7 273 9.1 2633 16.6 Peanuts 2.71 0.7 85 2.8 136 0.9 Bananas 9.97 2.4 67 2.2 607 3.8 Other 60.15 14.4 371 12.4 1670 10.5 Export and industrial crops 45.84 11.0 609 20.4 4001 25.2 Soybeans 0.21 0.1 182 6.1 2336 14.7 Coffee 18.34 4.4 33 1.1 459 2.9 Sugarcane 9.70 2.3 50 1.7 167 1.1 Cotton 13.74 3.3 330 11.0 1015 6.4 Other 3.85 0.9 14 0.5 24 0.2 Total 416.83 100.0 2992 100.0 15900 100.0 Source: Tables 1.2a, 1.2b, and 1.2c. - 179 - Table 1.4a: Area Cultivated -- Major Crops, 1935-1965 page 1 (Thousands of hectares) W4hite Sweet Black Year Wheat Rice Corn Manioc Potatoes Potatoesa/ Peanuts../ Beans Pineapples Oranges 1935 145 949 4,076 322 54 - - 874 9 98 1936 154 888 3,872 341 46 - - 940 10 109 1937 1-62 888 3,877 388 62 - - 942 10 102 1938 170 979 4_254 473 82 - - 1,0l2 10 102 1939 207 1,076 4,380 533 85 - - 1,005 10 116 1940 201 872 3,904 584 66 - - 978 9 125 1941 272 1,001 4,112 586 70 - - 985 10 123 1942 277 1,059 4,059 608 72 - - 977 9 123 1943 292 1,170 4,290 666 102 - - 1,072 10 124 1944 328 1,428 4,101. 807 84 87 31 1,350 9 71 1945 316 1,498 4,092 898 116 108 41 1,432 11 73 1946 301 1,646 4,327 908 110 113 34 1,534 13 76 1947 392 1,651 4,323 911 116 112 52 1,584 12 78 1948 536 1,662 4,346 913 128 121 142 1,650 13 76 1949 630 1,758 4,516 941 155 114 136 1,791 13 81 1950 652 1,964 4,682 948 148 102 127 1,808 15 77 1951 725 1,967 4,750 964 150 101 141 1,788 14 77 1952 810 1,873 4,864 1,015 152 103 141 1,838 14 76 1953 910 2,072 5,120 1,062 163 103 137 1,995 15 77 1954 1,081 2,425 5,528 1,102 165 107 139 2,199 16 76 1955 1,196 2,512 5,623 1,149 179 114 166 2,228 17 78 1956 856 2,555 5,998 1,178 185 116 164 2,257 19 85 1957 1,154 2,490 6,095 1,193 190 120 170 2,324 21 88 1958 1,446 2,515 5,790 1,226 192 112 228 2,124 23 98 1959 1,186 2,683 6,189 1,239 188 126 255 2,379 24 106 1960 1,141 2,966 6,681 1,342 199 133 291 2,560 25 112 1961 1,022 3,174 6,886 1,381 191 137 436 2,581 26 119 1962 744 3,350 7,348 1,476 196 145 476 2,715 27 126 1963 794 3,722 7,920 1,618 200 152 423 2,982 28 139 1964 734 4,182 8,106 1,716 209 158 430 3,131 30 144 1965 767 4,619 8,771 1,750 202 168 541 3,272 29 150 a/ Not surveyed before 1944. b/ Not surveyed before 1952. Source: FIBGE - 180 - Table 1.4&a Area Cultivated -- Major Crops, 1935-1965 page 2 (Thousands of hectares) Year Bananas Tomatoesa/ Onionsa/ Soybeansb/ Cocoa Coffee Tobacco SisaJb/ 1935 63 - - - 178 3,560 124 - 1936 61 - - - 189 3,462 96 - 1937 77 - - - 187 3,460 102 - 1938 79 - - - 181 3,492 92 - 1939 84 - - - 206 3,042 93 - 1940 80 - - - 230 2,519 96 - 1941 82 - - - 239 2,378 96 - 1942 80 - - - 241 2,174 96 - 1943 84 - - - 239 2,341 102 - 1944 76 3 20 - 242 2,326 115 - 1945 84 7 22 - 268 2,382 144 - 1946 90 9 24 - 244 2,406 136 - 1947 91 11 22 - 258 2,415 134 - 1948 96 13 25 - 261 2,464 144 - 1949 100 12 23 - 258 2,538 145 - 1950 110 14 24 - 276 2,663 142 - 1951 116 16 26 - 291 2,738 160 - 1952 128 17 28 60 284 2,823 154 67 1953 136 18 29 63 340 2,919 168 72 1954 141 23 30 68 353 3,005 184 78 1,955 156 24 32 74 368 3,266 196 93 1956 162 24 37 81 376 3,412 180 105 1957 164 25 37 97 387 3,672 179 110 1958 166 29 39 107 461 4,078 181 115 1959 174 32 37 114 466 4,297 191 127 1960 184 29 41 171 471 4,420 213 141 1961 194 30 41 241 474 4,384 228 151 1962 209 35 43 314 465 4,463 232 160 1963 231 36 41 340 470 4,286 250 186 1964 228 38 47 360 487 3,696 251 222 1965 238 40 47 432 482 3,511 274 250 - 181 - Table 1.4a: Area Cultivated -- Major Crops, 1935-1965 page 3 (Thousands of hectares) Year. Sugarcane Cotton Coconuts 1935 438 1,765 32 1936 461 1,968 34 1937 454 2,236 34 1938 474 2,350 37 1939 496 2,273 39 1940 534 2,412 44 1941 560 2,493 52 1942 559 1,931 52 1943 577 2,424 46 1944 676 2,808 52 1945 657 2,722 37 1946 758 2,480 38 1947 773 2,470 47 1948 819 2,308 49 1949 797 2,497 51 1950 828 2,689 52 1951 874 2,487 53 1952 920 3,036 56 1953 991 2,587 57 1954 1,027 2,487 58 1955 1,073 2,617 62 1956 1,124 2,663 64 1957 1,172 2,771 66 1958 1,208 2,706 68 1959 1,291 2,746 72 1960 1,340 2,930 74 1961 1,367 3,234 77 1962 1,467 3,458 79 1963 1,509 3,554 83 1964 1,520 3,765 84 1965 1,705 4,004 88 Table 1.4b: Indexes of Area Cultivated, Major Crops, 1955-1965 (1955=100) Category/Crop 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 Cereals 100 101 104 105 108 116 119 123 133 140 152 WTheat 100 72 96 121 99 95 85 62 66 61 64 Rice 100 102 99 100 107 118 126 133 148 166 184 Corn 100 107 108 103 110 119 122 131 141 144 156 Root crops 100 102 104 109 112 122 133 143 149 156 165 Maiiioc 100 103 104 107 108 117 120 128 141 149 152 White potatoes 100 103 106 107 105- 1ll 107 109 112 117 113 Sweet potatoes 100 102 105 98 1ll 117 120 127 133 139 147 Peanuts 100 99 102 137 154 175 263 287 255 259 326 Black beans 100 101 104 95 107 113 116 122 134 141 147 Fruits and vegetables 100 107 109 115 121 127 134 143 155 159 164 Pineapples 100 112 124 135 141 147 153 159 165 176 171 Oranges 100 109 113 126 136 144 153 162 178 185 192 Bananas 100 104 105 106 112 118 124 134 148 146 153 Tomatoes 100 100 104 121 133 121 125 146 150 158 167 Onions 100 116 116 122 116 128 128 134 128 147 147 (Subtotal: Domestic - food crops) (100) (101) (104) (104) (108) (117) (120) (12) (136) (142) (153) Export and industrial crops 100 103 109 115 120 126 131 137 138 134 139 Soybeans 100 109 131 145 154 231. 326 424 459 486 584 Cocoa 100 102 105 125 127 128 129 126 128 132 131 Coffee 100 104 112 125 132 135 134 137 131 113 108 *Tobacco 100 92 91 92 97 109 116 118 128 128 140 Sisal 100 113 118 124 137 152 162 172 200 239 269 Sugarcane 100 105 109 113 120 125 127 137 141 142 159 Cotton 100 102 106 103 105 112 124 132 136 144 153 Coconuts 100 103 106 110 116 119 124 127 134 135 142 Total 100 102 106 108 113 120 124 130 136 139 148 Source: Table 1.4a. Table 1.5a: Area Harvested - Major Crops, 1966 - 1979 (Thousands of hectares) Category/Crop 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 Cereals 13425 14378 15014 15682 16732 17583 17641 l$558 17808 19093 21.314 20942 19560 20602 Wheat 717 831 970 1407 1895 2269 2320 1839 2471 2932 3540 3153 2811 3831 Rice 4005 4291 4459 4621 4979 4764 4821 4795 4665 5306 6656 5992 5624 '5452 Corn 8703 9256 9585 9654 9858 10550 10500 9924 10672 10855 11118 11797 11125 11319 Roots 2798 3010 3013 3048 3090 3188 n.a. 2958 2720 2730 2804 2718 2712 2696 Manioc 1780 1914 1998 2029 2025 2071 2053 2104 2006 2041 2094 2176 2149 2111 lWhite potatoes 199 217 227 221 214 208 n.a. 189 192 191 200 196 211 204 Sweet potatoes 175 185 182 185 181 133 n.a. 159 148 153 138 117 98 92 Peanuts 644 694 606 613 670 726 n.2.. 506 374 345 37.2 229 254 289 Black beans 3325 3651 3663 3633 3485 3936 3971 3816 4289 4146 4059 4551 4617 4212 Fruits and vegetables 532 542 563 579 609 611 n.a. 884 796 844 857 913 923 972 Pineapples 28 30 27 31 32 34 n.a. 34 30 28 26 26 27 27 Oranges 165 167 173 183 202 212 n.a. 449 350 403 414 422 455 475 Bananas 250 256 268 273 278 264 n.a. 310 310 314 312 352 328 344 1 Tomatoes 39 41 44 41 45 49 n.a. 42 53 47 47 52 56 57 ` Onions 50 48 51 51 52 52 n.a. 49 53 52 58 61 57 69 Li (Subtotal: Domestic food crops) (20080) (21581) (22253) (22942) (23916) (25318) (n.a.) (24216) (25613) (26813) (29034) (29124) (27812) (28482) Export and industrial crops 10236 9981 10102 10467 10840 11286 n.a. 13005 14369 15075 14168 16559 17513 18071 Soybeans 491 612 722 906 1319 1716 2191 3615 5143 5824 6417 7070 7782 8256 Cocoa 456 473 433 438 444 448 n.a. 416 515 451 407 413 444 454 Coffee 3058 27'2 2623 2571 2403 2390 n.a. 2080 2155 2217 1121 1942 2184 2406 Tobacco 265 261 276 258 245 241 n.a. 235 241 254 280 311 328 326 Sisal 331 333 345 311 288 273 n.a. 248 264 327 281 296 270 288 Sugarcane 1636 1681 1687 1672 1725 1728 n.a. 1959 2057 1969 2094 2270 2391 2537 Cotton 3898 3720 3902 4195 4299 4374 n.a. 4319 3845 3876 3409 4097 3951 3646 Coconut 101 109 114 116 117 116 n.a. 133 149 157 159 160 163 158 (ex. soybeans) (9745) (9369) (9380) (9561) (9521) (9570) (n.a.) (9390) (9226) (9251) (7751) (9489) (9731) (9815) Total 30316 31562 32355 33409 34756 36604 n.a. 37221 39982 41888 43202 45683 45325 46553 (ex. soybeans) (29825) (30950) (31633) (32503) (33437) (34888) (n.a.) (33606) (34839) (36064) (36785) (38613) (37543) (38297) Source: FIBGEo Table 1,5b- Indexes of Area Harvested of Major Crops, 1966-1979 (1966=100) Category/Crop 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 Cereals 100 107 112 117 125 131 131 123 133 142 159 156 146 153 Wheat 100 116 135 196 264 316 324 257 345 409 494 440 392 534 Rice 100 107 111 115 124 119 120 120 116 132 166 150 140 136 Corn 100 106 110 111 113 121 114 114 123 125 128 136 128 130 Root crops 100 108 108 109 110 114 n.a. 106 97 98 100 97 97 96 Manioc 100 108 112 114 114 116 115 118 113 115 118 122 121 119 White potatoes 100 109 114 111 108 104 n.a. 95 96 96 100 98 106 103 Sweet potatoes 100 105 104 106 103 104 n.a. 91 84 87 79 67 56 53 Peanuts 100 108 94 95 104 113 n.a. 79 58 54 58 36 39 45 Black beans 100 110 110 109 105 118 119 115 129 125 122 137 139 127 Fruits and vegetables 100 102 106 109 114 115 n.a. 166 149 158 161 172 173 183 Pineapples 100 T08 -9i 7 9 114 1-20 n.a. 120 105 100 93 93 96 96 Oranges 100 101 105 111 122 128 n.a. 272 211 244 250 255 276 288 Bananas 100 102 107- 109 111 106 n.a. 124 124 125 125 141 131 138 Tomatoes 100 106 114 105 116 127 n.a. 110 137 121 122 134 144 146 Onions 100 96 101 101 102 102 n.a. 98 105 104 114 121 114 138 (Subtotal: Domestic food crops) (100) (107) (111) (114) (119) (126) (n.a.) (121) (128) (134) (145) (145) (139) (142) Export and industrial crops 100 98 99 102 106 110 n.a. 127 139 147 138 162 171 177 Soybeans 100 125 147 185 269 350 737 1048 1187 1308 1441 1585 1681 Cocoa 100 104 95 96 97 98 n.a. 91 113 99 89 91 97 100 Coffee 100 971 86 84 79 78 n.a. 68 70 73 37 63 71 79 Tobacco 100 98 104 97 93 91 n.a. 89 91 96 106 118 124 123 Sisal 100 101 104 94 87 82 n.a. 75 80 99 85 39 82 87 Sugarcane 100 103 103 102 105 106 n.a. 120 126 120 128 139 146 155 Cotton 100 95 100 108 110 112 n.a. 111 99 99 87 105 101 94 Coconut 100 108 113 115 116 115 n.a. 132 147 156 158 158 161 156 (ex. soybeans) (100) ((96) (96) (98) (98) (98) (n.a.) (96) '95) (95) (80) (97) (100) (101) Total 100 104 107 110 115 121 n,a. 123 131 139 143 151 150 154 (ex-.soybeans).. *.(lQQ) ..(J04) ..(1Q6Y. (1Q9). (112) (117) (n.a.) (113 (117) (121) (123) (129) (126) (128) p/ Preliminary. Source: Table 1.5a. - 185 - Table 1.6: Regional Importance of Principal Crops, by Area Harvested, 1966, 1973 and 1977 (Thousands of hectares) ------------1966 -------------------- 1973 --------------------1977----------- Area % of Regional Area % of Regional Area % of Regional Category/Crop Harvested Total Harvested Total Harvested Total North Domestic food crops 226 a/ 78.7 342 73.2 580 82.9 Rice 75 26.1 108 23.1 205 29.3 Corn 55 19.2 65 13.9 117 16.7 Manioc 77 26.8 123 26.3 181 25.9 Beans 12 4.2 16 3.4 47 6.7 Other 7 2.4 30 6.4 30 4.3 Export and industrial crops 61 a 21.3 125 26.8 120 17.1 Jute 34 11.8 58 12.4 34 4.9 Other fibers 2 - 007 31 6.6 48 6.9 Other 25 a/ 8.7 36 7.7 38 5.4 Total 287 a/ 100.0 467 100.0 700 100.0 Northeast Domestic food crops 4834 a 51.3 6205 53.6 7228 56.5 Rice 675 7.2 866 7.5 1034 8.1 Corn 1801 19.1 2199 19.0 2486 19.4 Manioc 817 8.7 1055 9.1 1286 10.0 Beans 1336 14.2 1681 14.5 1955 15.3 Bananas 78 0.8 98 0.8 119 0.9 Cashews n.a.a n.a. 66 0.6 134 1.0 Other 127 - 1.3 240 2.1 214 1.7 Export and industrial crops 4598 a/ 48.7 5365 46.4 5574 43.5 Cocoa 428 4.5 379 3.3 382 3.0 Sisal 330 3.5 248 2.1 296 2.3 Cotton 2693 28.6 3140 27.1 3247 25.4 Sugarcane 552 5.9 811 7.0 935 7.3 Coconut 96 1.0 127 1.1 154 1.2 Castor bean 231 2.4 327 2.8 211 1.6 Tonka bean n.a. / n.a. 170 1.5 166 1.3 Other 268 - 2.8 163 1.4 183 1.4 Total 9432 a/ 100.0 11570 100.0 12802 100.0 a/ Coverage not consistent with other years 4hown. - 186 - page 2 -*--- - 1966 --------------------1973 --------------------1977---------- Area % of Regional Area % of Regional Area % of Regional Category/Crop Harvested Total Harvested Total Harvested Total Southeast Domestic foodcrops 6625 a/ 66.0 6929 68.5 6867 66.6 Wheat 6 0.1 29 0.3 185 1.8 Rice 1507 15.0 1430 14.1 1151 11.2 Corn 3045 30.3 3107 30.7 3191 31.0 Manioc 303 3.0 291 2.9 235 2.3 Beans 795 7.9 841 8.3 1047 10.2 Oranges 119 1.2 391 3.9 348 3.4 Other 850 a/ 8.5 840 8.3 710 6.9 Export and industrial crops 3408 a! 34.0 3187 31.5 3443 33.4 Soybeans 13 1.3 224 2.2 549 5.3 Coffee 1513 15.1 1145 11.3 1201 11.6 Cotton 857 8.5 660 6.5 417 4.0 Sugarcane 894 / 8.9 996 9.8 1194 11.6 Other 131 - 1.3 162 1.6 82 0.8 Total 10033 a/ 100.0 10116 100.0 10310 100.0 South Domestic foodcrops 6786 a 74.3 9106 66.0 11391 61.0 Wheat 709 7.8 1786 12.9 2933 15.7 Rice 808 8.8 995 7.2 1278 6.8 Corn 3298 36.1 3944 28.6 4890 26.2 Manioc 479 5.2 526 3.8 386 2.1 Beans 988 a/ 10.8 1066 7.7 1174 6.3 Other 504 a 5.5 789 5.7 730 3.9 Export and industrial crops___ 2352 -a 25.7 4689 34.0 7290 39.0 Soybeans 476 5.2 3245 23.5 6041 32.3 Cotton 273 3.0 29.4 2.1 290 1.6 Tobacco 135 1.5 117 0.8 197 1.1 Coffee 1305 / 14.3 840 6.1 620 3.3 Other 163 - 1.8 193 1.4 142 0.8 Total 9138 a/ 100.0 13795 100.0 18681 100.0 a/ Coverage not consistent with other years shown. - 187 - page 3 -----------1966 --------------------1973 ---------------------1977---------- Area % of Regional Area % of Regional Area % of Regional Category/Crop Harvested Total Harvested Total Harvested Total Domestic foodcrops 1773 90.1 2520 85.1 3995 85.3 Rice 940 47.8 1395 47.1 2325 49.6 Corn 505 25.7 608 20.5 1113 23.8 Beans 194 / 9.9 211 7.1 329 7.0 Other 134 - 6.8 306 10.3 228 4.9 Export and industrial a/ crops 194 - 9.9 440 14.9 690 14.7 Soybeans 1 0.1 146 4.9 480 10.2 Cotton 73 a/ 3.7 224 7.6 142 3.0 Other 120 - 6.1 70 2.4 68 1.5 Total 1967 -/ 100.0 2960 100.0 4684 100.0 a/ Coverage not consistent with other years shown. Source: FIBGE. Table 1. 7.: Productiono aorCos 19518 (Thousad. of eerl toI Wihite S-et aI a -BlackcIcd/. a/bbII Year What Rice Corn Nantc Poao Potatoes- Peanut.- en inap. ia j Banana-d Tomtoes- Onion.-, Soyb n-b Cocoa Coffee Tobacco Sia- Suaarcan Cotton Coconut-l 1818 146 367 5933 4541 359 - - 818 83 5765 72 - -- 127 1136 102 - 16681 991 134 1936 1I. 1214 5721 4947 335 - - 827 91 6141 74 - -- 127 1577 91 - 18496 1172 140 1937 149 1232 5776 5013 323 - - 829 85 5712 78 --- 119 1461 84 - 15290 1350 141 19t38 137 1529 5560 6021 402 - - 854 89 6050 80 --- 142 1404 91 - 16582 1455 133 1939 101 1484 5394 7122 504 - - 790 89 6029 88 --- 135 1157 96 - 19988 11428 129 19140 102 1320 4876 7332 434 - - 767 85 6400 75 --- 128 1002 95 - 22252 1L562 134 1941 232 1688 5438 7763 . 452 - - 875 83 6350 81 --- 132 965 95 - 21463 1677 149 1942 217 1881 5276 7916 417 -- 838 78 6234 80o - 109 830 93 - 24574 1256 143 1943 223 1894 5210 8936 518 -- 919 84 6266 85 --- 178 922 92 - 22051 1654 148 1944 171 2110 5575 10333 463 659 32 1042 74 4894 93 42 70 - 116 687 104 - 25149 1759 136 1945 233 2147 4847 11415 596 968 29 1002 75 5037 107 59 78 - 120 835 113 - 25179 1124 138 1946 212 2759 5721 12225 542 788 32 1076 68 5272 117 87 87 - 122 917 119 - 28069 1122 156 1947 359 2596 5502 11845 575 851 54 1046 69 5310 128 114 88 - 119 948 ill - 28990 1030 217 * 1948 405 2554 5608 12455 585 934 139 1133 74 6129 136 103 98 - 97 1038 118 - 30893 949 234 1949 438 2720 5449 12616 748 92-3 136 1257 82 5975 148 ill 96 - 133 1068 114 - 30929 1176 235 1950 532 3218 6024 12533 707 833 118 1248 98 6015 163 136 126 - 153 1071 108 52 32671 1191 229 1951 424 3182 6218 11918 722 823 151 1238 98 6182 170 157 118 - 121. 1080 118 55 33652 996 248 * 1952 690 2931 5907 12809 735 831 145 1152 95 6116 185 175 135 78 114 1125 106 64 36041 1504 256 1953 772 3072 5984 13441 815 896 146 1387 105 6178 185 206 146 88 137 1111 132 66 38337 1110 267 1954 871 3367 6789 14493 815 958 168 1544 112 6384 198 256 140 117 163 1037 147 66 40302 1166 267 1955 1101 3738 6690 14863 898 1042 186 1475 125 6502 204 262 155 107 158 1370 148 90 40946 1281 278 1956 825 3489 6999 15316 1003 1043 181 1379 129 6897 224 266 200 115 161 979 144 102 43976 1194 303 1957 781 4072 7763 15443 999 1086 192 1582 136 7244 233 300 180 122 165 1409 140 102 47703 1177 319 1958 589 3829 7370 15380 1016 1052 306 1454 156 7472 230 364 180 131 164 1696 144 105 50020 1145 362 1959 611 4101 7781 16575 1022 1188 357 1550 165 7993 244 409 185 152 178 4397 152 142 53512 1400 384 1960 713 4795 8672 17613 1113 1283 408 1731 178 8360 256 397 210 206 163 41.70 161 1854 56927 16039 436 1961 545 5392 9036 18407 1080 1356 581 1745 183 8832 266 388 191 272 156 4457 168 170 59377 1818 418 1962 706 5557 9587 19843 1134 1448 648 1709 184 9254 301 488 227 345 140 4381 187 174 62534 1902 429 1963 392 5740 10418 22249 1168 1546 G04 1942 183 10532 313 496 . 195 323 144 3301 207 199 63723 1957 494 1964 643 6345 9408 24356 126.4 1598 470 1951 194 10275 338 553 241 305 154 2084 210 229 66399 1770 503 1965 585 7580 12112 24993 1246 1721 743 2290 195 11428 348 580 226 523 161 3664 248 242 75853 1986 529 1966 615 5802 11372 24710 1329 1913 895 2148 197 11767 356 679 277 595 170 2731 228- 287 75788 1865 692 1967 629 6792 12824 27268 1466 2226 751 2554 225 12523 403 745 250 716 195 3015 243 319 77086 1692 824 1968 856 6652 12814 29203 1606 2120 754 2420 225 13587 422 775 273 654 149 2116 258 328 76610 2000 690 1969 1374 6394 12693 30074 1506 2175 754 2200 260 14484 . 463 700 275 1057 . 211 .2567 250 311 75247 2111 656 1970 18344 7553 14216 29464 1584 2134 928 2211 283 15497 493 ;64 285 1508 197 1510 744 ?63 79753 1955 657 1971 2011 6593 14130 30229 1580 2156 945 2688 333 16284 505 820 288 2077 219 3103 244 2784 80390O 2271 671 1972 684 '7824 14500 29830 1589 n... 956 2676 n.. 18856 563 895 n..3223 200 1410 263 8.. 5106 2511 05 1973 2031 7160 14186 26527 1337 1828 590 2332 326 24652 354 810 307 5012 196 1746 234 261 91994 2273 547 1974 2858 6764 16273 24798' 1672 1595 453- 2238 329 29595 353 1144 336 7876 165 3231 296 290 95624 1917 498 1975 1788 7782 16334 26118 1655 1600 442 2282 351 31566 364 1050 346 9893 292 2545 286 314 91525 17.~8 482 1976 3216 9757 17751 25443 1898 1378 510 1840 346 35841 382 1167 431 11223 232 752 299 -169 103173 1262 465 1977 2066 8994 192.56 52529 1896 1074 321 2290 366 35825 4428 1298 488 12513 250 1951 357 225 120082 1900 473 1978 2691 7296 i3s369. P.5459 203.4 882 325 23194 38 391-32 416 31465 488 9541 284 2535 405 202 129145 1570 473 1979 2927 7595 3.6306 24962 2154 819 462 2186 387 . 42226 409 1501 691 3.o214o 336 2666 422 228 138899 1636 491 19&0p./ e264i - ~971 ---~3*~ 244045 i914 .B 483 1969 377 54347 452 1526 697 15153 228 23133 407 235 146290 i673 525 Not surveyd before 19144. Not surveyd befor 1952. If MMi-.is of bunches FIBE;FG. Table 1.7b: Indexes of Major Crop Production, 1955-1965k/ (1955=100) Category/Crop 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 Cereals- 100 96 108 100 106 122 130 137 142 145 177 Wheat 100 75 71 53 55 65 50 64 36 58 53 Rice 100 93 109 102 110 128 144 149 154 170 203 Corn 100 105 116 110 116 130 135 143 156 141 181 Root crops 100 105 106 109 117 126 134 144 155 163 174 Manioc 100 103 104 103 112 119 124 134 150 164 168 White potatoes 100 112 111 113 114 124 120 126 130 141 139 Sweet potatoes 100 100 104 101 114 123 130 139 148 153 165 Peanuts 100 97 103 166 192 219 312 348 325 253 399 Black beans 100 93 107 99 105 117 118 116 132 132 155 Fruits and vegetables 100 110 113 118 126 132 134 151 156 168 175 Pineapples 100 103 109 125 132 142 146 147 146 155 156 Oranges 100 106 111 115 123 129 136 142 162 158 176 Bananas 100 110 114 113 120 125 130 148 153 166 171 Tomatoes 100 102 115 139 156 152 148 186 189 211 221 Onions 100 129 116 116 119 135 123 146 126 155 146 (Subtotal: Domestic food crops) (100) (99) (108) (104) (110) (123) (130) (138) (145) (150) (174) Export and industrial crops 100 83 102 114 230 226 242 242 200 148 221 Soybeans 100 107 114 122 142 193 254 322 302 285 489 Cocoa 100 102 104 104 113 103 99 89 91 97 102 Coffee 100 71 103 124 321 304 325 320 241 .152 267 Tobacco 100 97 95 97 103 109 114 126 140 142 168 Sisal 100 113 113 117 158 182 189 193 221 254 269 Sugarcane 100 107 117 122 131 139 145 153 156 162 185 Cotton 100 93 92 89 109 126 142 148 153 138 155 Coconut 100 109 115 130 138 157 150 154 178 181 190 (ex. soybeans) (100) (83) (102) (114) (231) (226) (242) (242) (200) (148) (220) Total 100 91 105 109 169 171 185 189 172 149 197 (ex. soybeans) (100) (91) (105) (109) (170) (174) (185) (189) (172) (149) (197) a/ Aggregations by average value weights of 1952-54. Source: Tables 1.1 and 1.7a. Table 1.7c: Indexes of Production of Major Crops, 1966-1979- (1966=100) Category/Crop 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 RI Cereals 100 113 117 126 151 147 128 152 176 160 211 186 164 183 208 Wheat 100 0 327 111 330 465 291 523 336 48 77 Rice 100 i17 115 110 130 114 135 123 .117 134 168 155 126 131 168 Corn 100 113 113 112 125 124 128 125 143 144 156 169 1l9 143 179 Root crops 100 108 115 116 117 119 n.a. 101 99 102 104 102 102 104 n.a. Manioc 100 110 118 122 119 122 121 107 100 106 103 105 103 101 97 White potatoes 100 110 121 113 119 119 n.a. 101 126 125 143 143 152 162 147 Sweet potatoes 100 116 111 114 112 113 n.a. 96 83 84 72 56 46 43 nf.a. Peanuts 100 84 84 84 104 106 107 66 51 49 57 36 52 54 Black Beans 100 119 113 102 103 125 125 104 104 106 86 107 102 102 92 Fruits and vegetables 100 108 114 120 128 135 n.a. 151 177 182 204 213 228 246 289 Pineapples 100 114 114 132 144 169 n.a. 165 167 179 176 186 194 l9b 191 Oranges 100 106 115 123 132 138 160 210 252 268 305 304 333 359 462 Bananas 100 113 119 130 138 142 158 99 99 102 107 120 117 115 127 Tomatoes 100 110 114 103 113 120 n.a. 119 169 155 172 191 216 221 225 Onions 100 90 98 99 103 104 n.a. 111 121 125 155 176 176 249 252 (Subtotal: Domestic food crops) (100) (112) (115) (119) (132) (135) (n.a.) (132) (146) (140) (163) (156) (1418) (160) (176)I 0 Export and industrial crops 100 108 100 126 139 184 n.a. 320 470 566 612 698 556 596 835 Soybeans 100 120 110 178 254 349 5842 1324 1663 1886 2103 1T 1721 2547 Cocoa 100 114 88 124 116 128 117 115 97 165 136 147 167 198 134 Coffee 100 110 77 94 55 114 52 64 118 93 28 71 93 98 78 Tobacco 100 106 113 110 107 107 n.a. 103 130 125 131 157 178 185 179 Sisal 100 111 114 108 92 97 n.a. 91 101 109 59 78 70 79 82 Sugearcane 100 102 101 99 105 106 112 121 126 121 136 158 170 183 193 Cotton 100 91 107 113 105 122 135 122 103 94 68 102 84 88 90 Coconut 100 119 100 95 95 97 n.a. 79 72 70 67 68 68 71 76 (ex-soybeans) (100) (103) (96) (104) (90) (114) (n.a.) (101) (113) (107) (80) (111) (117) (126) (118) Total 100 110 109 122 135 157 (n.a.) 214 288 327 360 394 326 350 467L/ (ex-soybeans) (100) (109) (109) (113) (117) (128) (n.a.) (121) (134) (128) (134) 140 (137) (148) (155)ˇ/ a! Aggregations by value weights of 1973. b/ Excludes sweet potatoes. p Preliminary. Source: Tables 1.1 and 1.7a. Tabic .8o vrg ils- o Crops 1935-1965 White Socet Block - 1935 1005 1440 1456 14113 6696 - - 936 9455 58764 1153 - - - 715 319 819 - 38127 562 4178 1936 929 1367 1478 14522 7313 - - 880 9351 56544 1204 - - - 670 456 943 - 40148 595 4169 1937 923 1388 1490 12927 5225 - 880 8252 55726 1005 - - - 635 422 819 - 33685 604 4183 1938 809 1562 1307 12724 4918 - - 853 9051 59490 1008 - - - 784 402 992 - 35005 619 3559 1939 489 1380 1232 13355 5914 - - 785 9686 52111 1041 - - - 654 380 1033 - 40322 629 3293 1940 506 1514 1249 12553 6530 - -7 784 9183 51361 935 - - - 557 398 983 - 39440 648 3016 1941- 851 1686 1322 13246 6498 - - 888 8536 51780 985 -- - 553 404 990 - 38313 673 2851 1942 782 1772 1300 13013 5797 - - 857 8583 50514 998 -- - 451 382 966 - 43961 651 2769 1943 765 1619 121. 13425 5074 - - 857 8708 50651 1005 - - - 745 394 900 - 38203 683 3199 1944 519 1478 1359 12805 5507 7609 1019 773 8211 69253 1225 12575 3510 - 482 295 909 - 37225 627 2635 1945 739 1433 1184 12711 5140 8969 704 700 6570 68832 1274 8924 3566 - 447 351 790 - 38329 413 3714 1946 706 1676 1322 13467 4919 6996 919 701 5310 69445 1295 9700 3694 - 499 381 873 - 37025 452 4108 1947 918 1573 1273 12998 4938 7601 1035 661 5656 68153 1401 10133 3889 - 462 392 826 - 37508 417 4576 1948 755 1537 1290 13641 4570 7730 979 686 5917 80622 1425 8019 3960 - 372 421 818 - 37738 411 4789 1949 694 1547 1206 13402 4829 8069 997 702 6237 74078 1476 8960 4133 - 517. 421 787 - 38821 471 4588 1950 816 1638 1287 13089 4787 8147 928 690 6685 78100 1479 10044 5286 - 554 402 761 - 39448 443 4401 1951 584 1618 1309 12359 4827 8164 1069 692 6819 80178 1465' 10129 4598 - 416 394 738 - 38491 400 4659 1952 852 1565 1214 12616 4838 8097 1028 626 6664 80712 1441 10367 4867 1298 399 399 688 951 39184 496 4622 1953 848 1483 1169 12658 4998 8694 1069 695 6882 80332 1357 11201 5041 1400 402 381 784 924 38689 429 4710 1954 806 1388 1228 13153 4930 8953 1206 702 7089 83892 1403 11260 4663 1722 462 345 799 843 3922 7 469 4645 1955 921 1488 1190 12934 5029 9183 1118 662 7365 83636 1313 10867 4850 1445 429 419 756 966 38164 490 4515 *1956 965 1366 1167 13000 5413 9012 1107 611 6789 80864 1385 11033 5368 1422 429 287 799 971 39121 448 4767 1957 677 1635 1274 12940 5269 9024 1131 681 6556 82499 1420 11870 4904 1247 426 384 782 927 40688 425 4838 1958 407 1523 1273 12545 5296 9386 1352 684 6846 75878 1385 12515 4654 1223 35 416 794 912 41403 423 5303 i959 515 1529 1258 13374 5437 9425 1400 651 6867 75126 1400 12708 4987 1328 381 1023 793 1117 41448 510 5356 1960 625 1617 1298 1.3121 5598 9627 1403 b76 7206 74481 1389 13740 5104 1200 347 941 757 1162 42485 549 5929, 1961 533 1699 1312 13326 5649 4,69 1332 .676 7000 74344 1375 12967 4643 1127 329 1017 737 1130 43448 562 5457 1962 949 1659 1305 13442 5779 9985 1359 629 6840 73552 1441 14075 5221 1101 302 982 805 1088 42639 550 5445 1963 4964 1542 1315 13752 5845 10146 1428 651 6411 75916 1354 13704 4763 950 306 770 826 1072 42228 551 5951 1964 877 1517 1161 14194 6056 10088 1093 623 6573 71455 1485 14371 5086 848 315 564 840 1031 43698 470 5990 1965 764 1641 1381 14282 6160 10227 1374 700 6835 76054 1463 14641 4829 1212 333 1043 906 968 44486 496 6036 A/ Eu..cbeo per- ctr culIvte,,td. ˇ1l Fruits p-r hect.-ecuLtit...e S.-..e: Lebs .4 sd 1.2a. Table 1.8b: -ndexes of Average Yields, Major Crops, 1955-1965 (1955=100) Cateogry/Crop 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 Cereals Whleat 100 105 74 44 56 68 58 103 54 95 83 Rice 100 92 110 102 103 109 114 111 104 102 110 Corn 100 98 107 107 106 109 110 110 111 98 116 Root crops Manoic 100 101 100 97 103 101 103 104 106 110 110 White potatoes 100 108 105 105 108 111 112 115 116 120 122 Sweet potatoes 100 98 98 102 103 105 107 109 110 110 111 Peanuts 100 99 101 121 125 125 119 122 128 98 123 Black beans 100 92 103 103 98 102 102 95 98 94 106 Fruits and vegetables Pineapples 100 92 89 93 93 98 95 93 87 89 93 Oranges 100 97 99 91 90 89 89 88 91 85 91 Bananas 100 105 108 105 107 106 105 110 103 11.J 111 Tomatoes 100 .102 109 115 117 126 119 130 126 132 135 Onions 100 111 101 96 103 105 96 108 98 105 100 Export and industrial crops Soybeans 100 98 86 85 92 83 78 76 66 59 84 Cocoa 100 100 99 83 39 81 77 70 71 73 78 Coffee 100 68 92 99 244 225 243 234 184 135 249 Tobacco 100 106 103 105 105 100 97 106 109 111 120 Sisal 100 101 96 94 116 120 117 113 111 107 100 Sugarcane 100 103 107 108 109 111 114 112 111 115 117 Cotton 100 91 87 86 104 112 115 112 112 96 101 Coconut 100 106 107 117 119 - 131 121 121 132 133 134 Source: Table 1.8a Table 1.9a: Average Yields - Major Crops, 1966 - 1979 (Kilograms per hectare harvested) Category/Crop 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 Cereals Wheat 857 757 883 976 973 886 424 1104 1156 610 908 655 957 764 Rice 1449 1583 1492 1384 1517 1384 1623 1493 1449 1466 1465 1500 1297 1393 Corn 1307 1385 1337 1315 1442 1339 1381 1430 1524 1504 1596 1632 1219 1440 Root crops Manioc 13884 14243 14615 14819 14553 14594 14530 12609 12360 12793 12153 11918 11848 11824 White potatoes 6667 6745 7085 6815 7394 7594 n.a. 7087 8696 8653 9504 9686 9530 10553 Sweet potatoes 10906 12029 11636 11751 11804 11772 n.a. 11487 10796 10428 9984 9180 8979 8947 Peanuts 1391 1082 1243 1229 1386 1300 n.a. 1166 1211 1280 1372 1402 1280 1598 Black beans 646 700 661 606 635 683 674 585 521 550 453 503 475 519 Fruits and vegetables Pineapples a/ 6979 7377 8219 8487 8776 9840 n.a. 9605 11159 12461 13195 13943 14347 14519 Oranges a/ 71157 75143 78459 79123 76705 76776 n.a. 54871 84655 78289 86636 84948 ' 86097 88895 Bananas b/ 1424 1576 1571 1696 1775 1910 n.a. 1141 1137 1159 1225 1216 1267 1189 Tomatoes 17495 18031 17541 17251 16980 16637 n.a. 19047 21585 22382 24722 24967 26198 26136 Onions 5491 5169 5335 5415 5505 5563 n.a. 6219 6367 6625 7479 7982 8642 10000 Export and industrial crops Soybeans 1213 1169 907 1166 1144 1210 1471 1386 1531 1698 1749 1769 1225 1240 Cocoa 374 412 345 483 444 488 1 . 471 319 624 569 605 640 741 Coffee 893 1080 807 998 628 770 n.a. 839 1499 1148 670 1004 1161 1107 Tobacco 862 931 936 969 995 1012 n.a. 996 1229 1126 1065 1146 1234 1293 Sisal 869 959 953 1001 916 1018 n.a. 1050 1102 961 600 761 748 792 Sugarcane 46339 45864 45420 45002 46230 46516 n.a. 46965 46493 46477 49283 52898 54002 54749 Cotton 479 455 512 503 455 519 n.a. 526 499 451 370 464 397 449 Coconut a/ 6853 7581 6036 5655 5604 5764 n.a. 4112 3353 3067 2917 2960 2896 3106 a/ Fruits per hectare harvested. b/ Bunches per hectare harvested. Source: Tables 1.5a and 1.7a. Table l.9b: Indexes of Crop Yields for Major Crops, 1966-1979 Category/Crop 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 Cereals Wheat 100 88 103 114 114 103 49 129 135 71 106 76 112 89 Rice 100 109 103 96 105 96 112 103 100 101 101 104 90 96 Corn 100 106 102 101 110 102 106 109 117 115 122 125 93 110 Root crops Manioc 100 103 105 102 105 105 105 91 89 92 88 86 85 85 White potatoes 100 101 106 102 111 114 n.a. 106 130 130 143 145 143 158 Sweet potatoes 100 110 107 108 108 108 n.a. 105 99 96 92 84 82 82 Peanuts 100 78 89 88 100 93 n.a. 84 87 92 99 101 92 115 Black beans 100 108 102 94 98 106 104 91 81 85 70 78 74 80 Fruits and vegetables Pineapples 100 106 118 122 126 141 n.a. 138 160 179 189 200 206 208 Oranges 100 106 110 111 108 108 n.a. 77 119 110 122 119 - 121 125 Bananas 100 111 110 119 125 134 n.a. 80 80 81 86 85 89 83 Tomatoes 100 103 100 99 97 95 n.a. 109 123 128 141 143 150 149 F Onions 100 94 97 99 100 101 n.a. 113 116 121 .136 . 145 157 182 4 Export and industrial crops Soybeans 100 96 75 96 94 100 121 114 126 140 144 146 101 102 Cocoa 100 110 92 129 119 130 n.a. 126 85 167 152 162 171 198 Coffee 100 121 90 112 70 86 n.a. 94 168 129 75 112 130 124 Tobacco 100 108 109 112 115 117 n.a. 116 143 131 124 133 143 150 Sisal 100 110 110 115 105 117 n.a. 121 127 111 69 88 86 91 Sugarcane 100 99 98 97 100 100 n.a. 101 100 100 106 114 117 118 Cotton 100 95 107 105 95 108 n.a. 110 104 94 77 97 83 94 Coconut 100 111 88 83 82 84 n.a. 60 49 45 43 43 42 45 Source: Table 1.9a. Table 1.10 Average Annual Rates of Yield Change by Crop and Region, 1948 - 1976a/ (Percent) Subperiods Crop/Region 1948-53 1953-58 1958-63 1963-68 1968-73 1973-76 1948-76 Rice North -0.5 -2.6 -0.4 2.5 3.8 5.6 1.1 Northeast -1.1 0.8 2.6 -1.4 21.6 -27.1 0.3 Southeast (ex. Sao Paulo) -2.2 3.9 -1.0 -0.7 -0.8 -4.9 -0.7 Sao Paulo -1.6 2.2 -2.4 -1.3 1.7 -5.4 -0.9 South 0.1 -2.1 2.6 -1.1 1.4 2.9 0.4 Center-West -1.2 -0.5 -1.1 -1.2 -0.8 -5.2 -1.4 Black beans North -0.5 1.3 0.2 -1.1 2.0 -0.1 0.3 Northeast -3.8 1.8 -0.2 2.1 -3.3 -12.0 -1.9 Southeast (ex. Sao Paulo) 0.3 -0.7 -4,0 1.7 0.4 -4,8 -1.0 Sao Paulo 1.4 -0.7 -4.3 0.7 -0.7 -0.6 -0.7 South 0.3 -1.2 0.9 -1.2 -1.5 -1.0 -0.6 Center-West 1.8 -0.7 -3.4 0.5 -5.3 -4.3 -1.7 Corn North -0.7 -4.3 1.6 1.7 2.3 3.3 0.4 Northeast -4.3 1.7 1.7 1.7 -3.7 -4.2 -1.1 Southeast (ex. Sao Paulo) -1.7 1.4 -0.8 1.2 2.1 0.5 0.4 Sao Paulo -1.5 2.6 -0.2 4.0 3.3 1.5 1.6 South -0.5 0.9 0.2 1.0 2.1 6.1 1.3 y Center-West 2.7 -1.7 0.7 -1.4 1.5 3.1 0.6 t Manioc flour North -1.8 0.4 3,6 -0.0 -3.7 -1.4 -0.5 Northeast -2.2 -0.2 1.5 0.8 1.1 -6.2 -0.5 Southeast (ex. Sao Paulo) 0.4 0.2 0.0 1.1 -1.6 1.9 0.2 Sao Paulo 0.2 1.2 -0.2 0.3 -0.5 3.6 0.6 South 0.6 -0.4 1.8 2.4 -1.7 -2.4 0.2 Center-West 1.6 0.4 -0.1 1.5 -2.2 -3.7 -0.4 White Potato North -- -- -- -- -- Northeast 2.1 -6.9 0.8 -3.5 3.3 0.3 -0.8 Southeast (ex. Sao Paulo) 2.5 1.7 1.6 3.1 2.9 3.7 2.5 Sao Paulo 3.6 3.4 3.0 0.6 5.8 6.3 3.6 South -1.5 1.2 1.4 5.9 1.8 6.1 2.2 Center-West 4.3 -1.1 0.1 3.6 -9.5 16.8 1.1 Banana North 1.0 2.4 -1.2 1.8 -8.0 -0.3 -0.8 Northeast -0.3 0.1 1.9 -0.3 -3.8 -7.3 -1.3 Southeast (ex. Sao Paulo) -0.9 0.7 -1.3 1.3 -10.9 -7.5 -2.9 Sao Paulo -1.2 -1.6 0.2 6.7 -7.9 -7.2 -1.6 South 2.9 0.2 0.7 5.5 -1.2 -8.1 0.5 Center-West 3.8 -0.6 -1.7 -2.5 -13.9 -0.9 -2.9 Oranges North 3.5 -3.3 -2.8 2.3 -3.0 4.4 -0.1 Northeast 0.4 -1.6 -1.3 2.9 -3.5 2.4 -0.3 Southeast (ex. Sao Paulo) 1.9 -2.4 -0.7 -0.5 0.3 0.5 -0.2 Sao Paulo 2.6 1.4 -0.7 3.4 -1.2 -6.3 0.3 South 0.9 1.4 -0.4 0.6 -1.1 2.7 0.5 Cer.Ler-wert 4.9 -4.7 -4.7 0.2 0.4 -4.7 -1.3 page 2 Crop/Region 1948-53 1953-58 1958-63 1963-68 1968-73 1973-76 1948-76 Tomatoes North -2.6 -2.8 6.9 14.7 7.2 23.7 6.4 Northeast 5.4 -2.3 -1.1 10.7 5.6 7.5 4.0 Southeast (ex. Sao Paulo) 2.3 5.6 8.2 3.8 -3.8 14.1 4.3 Sao Paulo 1.4 4.3 1.5 0.1 0.2 3.4 1.7 South -5.2 7.0 4.7 10.8 8.1 9.7 5.4 Center-West 44.9 4.2 6.8 -3.4 21.9 8.0 13.1 Onions North 22.7 -2.7 5.2 0.8 2.7 -- -- Northeast 13.0 8.3 -3.2 3.8 7.8 2.0 5.4 Southeast (ex. Sao Paulo) -3.1 -1.1 0.6 1.3 7,3 1.4 1.0 Sao Paulo 7.2 1.0 2.5 0.8 -4.2 36.5 4.7 South 1.7 -2.5 7.6 -5.5 0.7 0.4 0.3 Center-West 7.1 -5.3 -0.7 2.0 5.4 1.4 1.6 Sugar cane North -2.9 -0.5 -0.7 -3.1 4.6 22.4 1.7 Northeast -0.5 0.5 1.0 1.4 0.5 -0.1 0.5 Southeast (ex. Sao Paulo) 0.5 -1.8 0.2 2.1 1.6 -2.2 0.2 Sao Paulo 0.3 2.1 0.4 0.6 0.8 3.1 1.1 South 4.7 1.8 2.7 2.4 -1.1 2.1 2.1 Center-South -1.9 2.1 1.7 -1.0 0.2 -3.0 -0.1 Soybeans \a North -- -- -- -- -- -- -- Northeast -- -- 9.3 -5.6 3.3 -13.4 -- Southeast (ex. Sao Paulo) -- -3.7 -4.7 17.8 5.8 -2.2 -- Sao Paulo -- -0.3 -1,7 3.6 4.2 2.9 -- South -- -3.1 -5.4 2.1 6.2 6.7 -- Center-South -- -- 0.9 3.6 3.2 2.9 -- Cotton ,orth -0.1 -0.3 -3.3 2.5 31.6 -11.1 3.5 ortheast -2.9 0.3 2.5 -2.0 33.0 -45.3 -1.7 Southeast (ex. Sao Paulo) -1.4 -1.7 -1.1 2.9 3.8 -0.6 0.3 Sao Paulo 3.8 4.0 5.7 1.8 2.1 7.9 3.9 South -4.0 6.5 4.1 3.3 2.8 -0.8 2.1 Center-South 12.9 -1.4 6.5 1.9 6.6 3.2 5.0 Tobacco North 1.0 -0.3 -1.6 -1.9 0.4 -4.1 -0.9 Northeast -6.7 0.9 -0.9 2.0 -1.7 2.1 -1.0 Southeast (ex. Sao Paulo) -1.4 0.0 -1.1 -2.2 9.6 4.4 1.3 Sao Paulo 2.3 0.6 -1.5 5.3 8.9 5.6 3.3 South -2.2 0;9 1.9 2.5 3.9 -1.4 1.1 Center-South -1.6 4.8 -1.8 1.4 0.9 -4.3 0.2 Peanuts North -3.1 5.6 -1.2 6.5 -5.3 -9.5 -0.7 Northeast 1.4 2.7 -0.4 -2.0 -0.5 5.0 0.7 Southeast (ex. Sao Paulo) 3.4 -1.7 -0.2 1.0 1.8 0.6 0.8 Sao Paulo 1.7 3.3 3.0 .i 1.2 5.5 1.2 South -0.3 1.8 -0.5 6.3 1.0 -2.4 0.8 Center-South 7.4 3.1 -0.3 0.2 -1.7 7.3 2.3 page 3 Crop/Region 1948-53 1953-58 1958-63 1963-68 1968-73 1973-76 1948-76 Cocoa North 3.9 7.2 3.3 -2.8 -3.7 -1.3 1.2 Northeast -8.2 -1.9 -4.4 6.3 0.9 11.8 -0.2 Southeast (ex. Sao Paulo) -5.9 2.8 -8.9 3.4 7.5 -0.4 -0.4 Sao Paulo -- -- -- 0.2 -3.3 -11.6 South Center-South Coffee North 4.4 -4.8 -5.7 2.4 1.1 25.0 1.9 Northeast -4.5 -0.8 -7.4 4.6 -7.1 16.8 -1.2 Southeast (ex. Sao Paulo) -1.5 -6.2 4.4 -0.4 24.3 -21.3 0.6 Sao Paulo -1.0 3.6 3.6 0.6 11.1 -13.6 1.5 South -1.9 -0.5 -0.5 2.1 -2.7 -14.0 -2.2 Center-South -6.3 0.4 5.1 -5.7 -6.2 5.0 -2.0 Castor Beans North 26.7 12.7 35.5 -- -- 7.9 14.5 Northeast -3.9 0.4 0.7 3.9 -3.8 -2.1 -0.7 Southeast (ex. Sao Paulo) 1.7 2.7 -2.6 2,9 -2.6 -2.2 0.1 Sao Paulo 1.7 2.1 0.7 1.4 0.5 6.9 1.9 South -6.5 6.5 0.3 12.5 -5.2 -2.7 0.8 Center-South -4.7 8.0 15.8 -5.6 -0.9 1.6 2.2 Wheat North Northeast -16.5 -10.2 -7.9 -- -- - -- Southeast (ex. Sao Paulo) -5.3 5.2 -0.1 -- -- -- 1.0 Sao Paulo 2.2 2.1 -1.1 2.6 11.4 -18.9 0.7 South 1.1 -8.6 7.7 2.4 0.5 -6.5 -0.3 Center-South -1.3 24.5 5.7 -4.9 -12.9 0.9 1.4 a/ Geometric growth rates; end years shown are middle years of 3-year moving average, Source: Eliseu Roberto de Andrade Alves, A Produtividade da Agricultura, October 1979, Table 1.11 Size of Livestock Herds, 1920 - 1979 (Thousands of Heads) Census Years Animal 1920 1940 1950 1960 1970 1975 1979 Cattle 31,986.7 34,392.4 44,600.2 56,041.3 78,562.2 100,833.9 109,177 Sheep 7,013.7 9.285.1 13,065.7 14,275.6 17,643.2 17,282.5 17,806 Swine 14,396.8 16,839.2 22,970.8 25,579.9 31,523.6 35,204.8 35,695 Goats 4,160.3 6,520.4 6,957.9 7,820.3 5,709.0 6,600.6 8,070 Poultry 49,766.3 59,274.3 73,920.3 132,275.0 213,622.5 296,198.4 394,924 Average Annual Rate of Growth - (%) Cattle 0.4 2.6 2.3 3.4 5.1 2.0 Sheep 1.4 3.5 0.9 2.1 -0.4 048 Swine 0.8 3.2 1.1 2.1 2.2 0.4 Goats 2.3 0.6 1.2 -3.1 2.9 5.2 Poultry 0.9 2.2 6.0 4.9 6.8 7.5 Source: FIBGE - 199 - Table 1.12: Estimated Milk Production, by'Regions'1966-1976 (Millions of liters) Total Year Brazil North Northeast Southeast South Center-West 1966 6688 27 762 4080 1331 488 1967 6703 34 804 4056 1327 483 1968 6909 35 822 4118 1451 484 1969 6993 35 853 4210 1406 490 1970 7132 36 856 4301 1434 506 1971 7109 28 754 4323 1472 533 1972 7142 36 778 4371 1450 507 1973 7536 38 821 4281 1741 656 1974 8760 44 955 4757 2085 920 1975 9712 49 1059 5167 2457 981 1976 10202 51 1122 5366 2632 1030 (Percent) 1966 100.0 0.4 11.4 61.0 19.9 7.3 1967 100.0 0.5 12.0 60.5 19.8 7.2 1968 100.0 0.5 11.9 59.6 21.0 7.0 1969 100.0 0.5 12.2 60.2 20.1 7.0 1970 100.0 0.5 12.0 50.3 20.1 7.1 1971 100.0 0.4 10.6 60.8 20.7 7.5 1972 100.0 0.5 10.9 61.2 20.3 7.1 1973 100.0 0.5 10.9 56.8 23.1 8.7 1974 100.0 0.5 10.9 54.3 23.8 10.5 1975 100.0 0.5 10.9 53.2 25.3 10.1 1976 100.0 0.5 11.0 52.6 25.8 10.1 Source: SUPLAN, Ministry of Agriculture. - 200 - Table 1.13: Livestock Slaughter, 1975-1979 (Thousands of metric tons - c-.rcass weight) Cattle Swine Equine-/ Sheep Goats Poultry 1975 1790.3 495.6 48.6 15.3 5.1 372.8 1976 2175.8 541.5 53.8 13.0 5.1 413.2 1977 2445.5 509.8 36.2 9.9 5.0 496.6 1978 2320.0 566.3 43.1 9.4 4.8 587.4 1979 2114.2 610.7 43.1 10.0 4.7 713.1 a/ Horses, asses, and mules. Source: FIBGE. - 201 - Table 2.0: Brazil - Imports by Economic Destination, 1975-78 (In millions of USdollars) -- 1975 ----- ------1976 - ----1977 ----- ------1978----- FOB CIF FOB CIF FOB CIF FOB CIF Consumer non-durables 387.5 431.5 425.9 480.1 479.0 542.8 575.8 647.9 1. Foods 296.2 293.6 337 360.3 7T=7 434.8 491.7 a) Primary products (119.8) (135.4) (170.5) (200.7) (209.5) (249.6) (208.3) (250.8) b) Processed foods (148.6) (160.8) (123.1) (132.6) (150.8) (161.8) (226.5) (240.9) 2. Beverages and tobacco 13.2 16.2 10.4 12.8 7.1 8.3 11.4 13.4 3. Pharmaceuticals 23.2 26.1 23.0 25.9 22.1 25.0 22.5 25.2 4. Clothes and textiles 5.9 6.6 10.5 11.2 6.5 7.1 5.0 5,7 5. Other consuLmer non-durables 76.8 86.4 88.4 96.9 83.0 91.0 102.1 111.9 Consumer durables 184.0 200.0 162.3 173.7 145.8 157,2 199.8 214.9 1. Domestic utensils and appliances 67.8 74.2 60.5 65.7 57.5 63.0 76.3 83.4 2. Furniture and equipment 16.3 17.8 19.6 21.0 19.5 20.8 24.7 26.9 3. Private vehicles 14.8 16.7 3.8 4.3 0.7 0.9 1.6 1.9 4. Military arms and equipment 2,7 2.9 10.2 11.1 14.8 15.5 29.6 30.6 5. Musical instruments 82.4 88.4 68.2 71.6 53.3 57.0 67.6 72.1 Fuels and lubricants 2987.2 3431.0 3689.9 4171.6 3997.3 4411.3 4422.0 4877.9 Raw materials and intermediate goods for agriculture 465.3 535.5 383.7 455.6 465.8 552.9 618.7 728.0 1. Animal feed 10.4 12.3 8.4 9.8 6.1 7.2 144.8 170.0 a) Primary (4.5) (5.3) (4.7) (5.5) (3.5) (4.2) (141.1) (165,8) b) Processed feed (5.9) (7.0) (3.7) (4.3) (2.6) (3.0) (3.7) (4.2) 2. Other 454.9 523.2 375.3 445.8 459.7 545.7 473.9 558.0 a) Primary goods (9.5) (10.6) (13.2) (14.8) (11.8) (13.3) (14.2) (15.9) b) Processed goods (445.4) (512.6) (362.1) (431.0) (447.9) (532.4) (459.7) (542.1) Raw materials and intermediate goods for industry 3995.0 4474.0 4041.1 4492.0 3843.6 4275.3 4306.0 4794.2 1. Food products 445.7 489.6 646.0 707.8 405.4 452.6 718.8 803.4 2. Non-food agricultural products 345.6 396.3 334.5 380.3 334.2 380.5 384.7 436.4 3. Mineral products 2011.6 2246.8 1591.8 i747.7 1746.8 1911.0 1652.9 1809.1 4. Chemicals and pharmaceuticals 1192.1 1341.3 1468.8 1656.2 1357.2 1531.2 1549.6 1745.3 Construction materials 298.5 343.0 199.7 223.0 172.0 194.0 164.7 183.0 Capital goods for agriculture 247.7 267.7 122.6 131.7 66.6 71.3 45.7 48.9 1. Machinery and tools 54.3 60.5 17.4 19.3 8.0 9.0 8.4 9.3 2. Other equipment 7.6 8.2 3.2 3.4 2.4 2.4 0.6 0.6 3. Transport and tractor material 185.8 199.0 102.0 109.0 56.2 59.9 36.7 39.0 Capital goods for industry 2886.8 3103.4 2649.0 2828.3 2156.3 2296.8 2472.0 2632.0 1. Machinery and apparatus for office and laboratory 407.5 431.8 327.7 347.0 330.0 347.5 392.2 413.9 2. Tools 62.1 66.4 49.4 52.4 41.9 44.7 42.4 45.1 3. Parts and accessories for industrial machines 260.4 277.3 281.4 297.1 269.5 284.4 278.9 294.5 4. Industrial machines 1662.3 1803.5 1496.6 1609.4 1133.9 1218.8 1385.0 1483.2 5. Other fixed equipment 494.5 524.4 493.9 522.4 381.0 401.4 373.5 395.3 Transport equipment 758.3 806.4 708.7 770.0 697.0 755.5 878.4 927.5 1. Parts and accessories 351.8 373.6 389.2 411.2 374.0 394.7 371,5 392.7 2. Mobile equipment 297.8 307.9 244.8 271.6 261.6 290.0 393.6 409.3 3. Fixed equipment 83.3 98.6 60.5 72.6 47.5 56.7 74.5 86.3 4. Miscellaneous 25.4 26.3 14.2 14.6 13.9 14.1 38.8 39.2 Total imports 12210.3 13592.5 12382.9 13726.0 12023.4 13257.1 13683.1 15054.3 Source: Ministerio da Fazenda, Comercio Exterior do Brasil Table 2.1: Exports of Agricultural Crigin., by Customs Category. 1965-1979 (FOB) (Millions of U.S. dollars) Customs Categoriep 1965 1966 1967 1968 1970 - 1971 .972 1973 1974 1975 1976 MD 1978 1979 I. Animals and Animal Products 37.6 29.9 21.7 47.8 83.4 107.8 151.4 252.1 260.1 140.6 127.6 174.0 232.0 251.0 59.4 11. Vegetable Products 824.0 899.2 807.0 911.2 951.5 1,132.2 962.5 1,214.7 1,864. 1,774.5 1,906.7 3,288.8 3,418.1 2.391.8 2,367.7 Coffee and tea 721.3 778.3 718.1 787.2 829.1 955.1 797.3 1,008.8 1,269.2 903.2 898.9 2,223.4 2,361.7 2,035.5 1,994.6 Oil seeds and Oleagenous fruits 13.4 17.5 34.7 9.2 37.2 41.6 34.9 142.6 514.8 615.8 718.7 803.5 731.1 182.2 196.3 Other 89.3 103.4 54.2 114.8 85.2 135.5 130.3 63.3 80.1 255.5 290.0 261.9 325.3 174.1 176.3 III. Fats and Oils (animal and veRetable) 46.8 38.3 37.0 52.0 62.7 67.5 78.8 111.5 194.3 235.1 267.2 360.3 450.0 514.6 593.4 IV. Processed foods, beverages and tobacco 171.8 245.1 270.9 290.4 403.6 436.1 561.3 941.4 1.541.1 2,501.9 2,429.9 2.240.5 L. 3.464.2 3,887.7 Scner andct 56.7 80.5 84.2 106.3 121.9 134.5 162.1 417.8 592.3 1,385.8 1,155.6 358.7 519.2 395-9 432.7 Cocoa and Cocoa preparations 41.1 71.7 84.4 72.3 136.4 106.3 91.9 100.1 148.3 33E.1 326.9 357.1 773.8 834.1 952.5 Other 74.0 92.9 102.3 111.8 145.3 195.3 307.3 423.5 800.5 77E.0 947.4 1,524.7 2,105.1 2,234.2 2,502.5 VIII. Hides, Skins and Leather - goods (except footwear) 24.0 30.4 25.6 23.4 44.7 41.9 37.5 76.3 80.5 80.5 98.6 139.1 143.4 167.5 232.1 ' IX. Wood and vood products 69.1 76.5 70.6 97.0 112.7 109.1 114.7 120.1 188.9 185.3 140.8 136.4 157.7 195.2 279.3 X. Pulp Paper and paper products 6.7 3.2 1.7 1.6 4.7 8.7 19.2 35.5 59.-8 84.9 76.2 71.5 78.9 156.3 . 324.3 XI. Textiles (except svnthetics)-/ 155.6 179.4 142.8 184.3 263.0 231.1 225.6 353.5 591.3 628.1 506.8 432.5 563.1 608.3 726.7 Cotton 105.9 123.3 97.4 137.5 207.4 173.9 158.5 239.7 318.4 219.8 217.6 132.4 231.6 238.6 269.7 Other 49.7 56.1 45.4 46.8 55.6 57.2 57.1 113.8 272.9 408.3 289.2 300.1 331.5 369.7 457.0 XII. Footwear - 0.3 0.2 0.3 0.5 1.9 8.4 29.5 54.9 93.7 121.9 168.0 179.5 182.0 291.9 368.2 Subtotal 1,335.9 1,502.2 1,377.6 1,608.2 1,928.2 2,142,8 2,180.; 3,160.0 4,873.8 5,752.8 5,721.8 7,022.6 8,624.2 8,040.8 9,098.8 Total Exports 1,595.5 1,741.4 1,654.0 1,881.3 2,311.2 2,738.9 2,903.9 3,991.2 6,199.2 7,951.0 8,669.9 10,128.3 12,120.2 12,658.9 15,244.4 Agriculture -based exports as Z of total exports 83.7 86.3 83.3 85.5 83.4 78.2 75.1 79.2 78.6 72.4 66.0 69.3 71.2 63.5 59-7 a/ - fxcludes Chapters 51 and 96, Some synthetics included in finished products. b/ - Section XII, Chapter 64. Source: Banco do Brasil, CACEX. Table 2.2- Imports of Agricultural Origin, by Customs Category. 1965-1979 (CIF) (Millions of U.S. dollars) Customs Categories 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 I. Animals & Animal Products 17.6 29.1 38.6 38.7 34.4 48.7 54.1 52.0 113.8 184.7 113.3 131.4 146.7 235.1 364.6 II. Vegetable Products 151.9 195.3 226.3 230.2 213.4 188.8 241.6 272.1 582.6 780.2 665.1 899.9 705.3 1,207.7 1,821.6 Cereals 119.0 149.3 161.1 162.3 143.9 111.7 132.7 152.6 392.8 542.3 401.9 578.8 311.6 788.8 1.132.2 Other 32.9 46.0 65.2 67.9 69.5 77.1 108.9 119.5 189.8 237.9 263.2 321.1 393.7 418.9 689.4 III. Fats and Oils (animal and vegetable) 13.0 14.9 15.5 19.9 14.8 20.3 24.8 27.7 46.4 84.1 44.0 34.0 34.1 63.7 148.9 IV. Processed Foods, beverages and tobacco 1.4 2.6 8.8 13.2 8.4 11.8 19.3 24.0 37.5 60.0 39.4 42.9 38.3 44.1 48.2 VIII. Hides, Skins and leather goods (except footwear) 0.7 0.7 0.8 1.3 1.2 2.1 3.0 5.2 13.6 14.5 12.7 13.6 14.8 22.3 29.4 IX. Wood and Wood products 1.0 1.0 1.2 1.6 1.6 3.4 3.9 6.7 11.9 19.1 14.5 20.5 26.6 38.46-7 X. Pulp, Paper and paper products 23.6 33.7 43.7 57.0 52.3 63. 98.2 127.1 157.0 346.1 235.8 232. 0 226.3 238.9 289.8 XI. Textiles (xcept synthetics) 3.6 3.0 6.4 12.4 10.5 18.7 20.6 23.3 35.1 67.3 59.5 50.3 41.8 40.7 37. XII. Footwear - - 0.0 0.1 0.0 0.1 0.1 0.2 0.3 0.4 0.5 o.6 0.5 0.7 1.4 Subtotal 212.8 280.3 341.3 374.4 336.6 357.8 465.6 538.3 998.2 1,556.4 1,184.8 1,425.2 1,234.4 1,891.6 2,777.9 Total Imports 940.6 1,303.4 1,441.3 1,855.1 1,993.2 2,506.9 3,701.4 4,783.3 6,999.0 14,168.0 13,592.5 13,726.0 13,257.0 15,054.3 1.9,804.3 Agriculture-based Imports as Z of total Imports 22.6 21.5 23.7 20.2 16.9 14.3 12.6 11.3 14.3 11.0 8.7 10.4 9.3 12.6 14.0 a! - Excludes Chapters 51 and 56. Some synthetics included in finished goods. b/- Section XII, Chapter 64. Sourcet Banco do Brasil, CACEX Table 2.3: Principal Crop-Based Export Products, FOB, 1967-1980 (Millions of US dollars) 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 Coffee 733.0 797.3 845.7 981.8 822.2 1057.1 1344.2 980.4 934.2 2398.1 2624.7 2294.7 .2325.7 2772.9 Beans 704.7 774.5 813.0 939.3 772.5 989.2 1244.3 864.3 854.5 2172.7 2298.9 1946.5 1917.7 b 26 Soluble 28.3 22.8 32.7 42.5 49.7 67.9 99.9 116.1 79.7 225.4 325.8 348.2 408.1 286.9 Soybeans 39.4 25.2 52.6 71.5 108.0 294.9 949.4 891.2 1304.3 1779.9 2142.4 1514.7 1650.3 2264.2 Beans 29.2 6.3 29.2 27.1 24.3 127.9 494.2 586.3 684.9 788.5 709.6 169.9 179.5 393.9 Oil, bulk and refined - - - 0.8 2.2 14.7 32.6 1.9 153.6 196.4 282.6 294.9 333.9 421.3 Meal and cake 10.2 18.9 23.4 43.6 81.5 152.3 422.6 303.0 465.8 795.0 1150.2 1049.9 1136.9 1449.0 Cocoa 84.3 72.2 136.4 106.2 91.7 100.1 148.1 337.2 321.6 359.3 770.7 833.0 947.7 Beans 59.2 46.1 105.5 77.7 61.7 59.2 88.5 210.0 220.4 218.8 435.5 453.8 - 486.9 291.7 Paste - - - - 5.4 7.8 6.7 11.6 11.9 20.7 68.8 278.0 328.8 219.3 Butter 25.1 25.9 30.6 28.0 24.3 33.1 47.6 100.0 60.2 70.0 96.8 83.0 119.3 158.2 Powder 0.1 0.2 0.3 0.5 0.6 1.3 1.0 2.7 3.5 13.5 12.7 Chocolate - - - - 0.3 4.7 14.3 28.1 47.1 166.1 4.7 Oranges 10.2 14.7 14.5 17.2 40.0 46.2 67.7 65.0 93.4 106.2 182.3 339.9 298.9 Fresh 3.5 3.1 3.6 2.5 4.1 4.7 4.1 5.8 11.2 5.3 5.3 7.3 17.5 Juice concentrate 6.7 11.6 10.9 14.7 35.9 41.5 63.6 59.2 82.2 100.9 177.0 332.6 281.4 339.0 Corn 23.2 58.8 35.3 82.0 77.0 10.9 7.7 144.4 157.5 174.3 149.6 2.5 30.6 Grain 22.1 57.0 33.3 80.6 75.4 9.6 3.1 139.0 150.9 164.7 135.7 2.2 1.7 $ Flour 1.1 1.8 2.0 1.4 1.6 1.3 4.6 5.4 6.6 9.6 13.9 0.3 28.9 Sugar 84.2 106.3 121.9 134.3 161.9 417.0 589.7 1380.7 1145.2 347.5 508.9 383.8 412.4 1 70 2 Crystal - - - 0.1 6.4 89.4 97.8 283.3 204.3 52.4 55.9 32.8 23.0 317.4 Demerara 80.4 101.6 115.0 126.5 146.6 314.1 454.9 978.3 769.9 152.5 276.5 195.9 247.0 624.5 Refined - - - - - - .6.0 60.3 125.5 101.6 130.2 121.4 93.8 345.9. Molasses, inedible 3.8 2.4 6.8 7.7 8.6 13.5 31.0 58.8 45.5 41.0 46.3 33.7 48.6 82.4 Tobacco 19.5 28.5 32.6 38.7 49.5 62.4 103.3 148.8 168.5 194.2 249.3 295.6 284.0 Leaf 20.3 18.9 26.5 31.2 36.6 46.7 58.5 99.0 142.0 161.2 186.3 238.9 284.3 Residue 0.2 0.1 1.1 0.3 0.3 0.4 0,5 0.5 1.4 2.0 2.7 3.5 6.7 Cigars and cigarettes 0.5 0.9 1.1 1.8 2.4 3.4 3.8 5.4 5.3 5.2 6.9 4.6 Cotton 99.2 141.7 216.7 183.6 166.4 250.9 331.7 227.3 224.8 139.4 247.6 249.3 293.7 Uncarded and uncombed 92.6 133.7 200.0 159.1 139.9 190.6 219.6 92.3 99.7 8.7 42.1 52.8 3.7 (incl. residues) Yarns 2.5 1.7 3.1 5.8 6.8 22.8 45.0 66.4 67.8 81.2 120.3 117.1 153.2 181.2 Cloths 1.9 1.8 4.1 9.0 11.1 25.8 5z.6 59.4 49.7 42.1 68.8 67.4 109.4 Oil, meal and cake 2.2 4.5 9.5 9.7 8.6 11.7 14.5 9.2 7.6 7.4 16.4 12.0 27.4 Sisal 17.3 17.6 19.1 18.1 18.3 27.1 69.4 154.2 51.5 59.6 78.2 72.1 140j 129.9 Bulk 15.5 16.0 16.9 15.4 15.3 '22.5 59.4 114.1 30.1 36.0 45.7 34.7 46.Q 59.0 Cord 1.8 1.6 2.2 2.7 3.0 4.6 10.0 40.1 22.7 24.5 33.9 37.4 64.5 70.9 Source: CACEX, FGV. Table 2.4: VJolume of Principal Crop-Based Exports, 1967-1980 (Thousands of metric tons) 1967 1968 1969 1970 1971 ? 1973 1974 1975 1976 1977 1978 1979 1980. Coffee beans 1004.3 1107.5 1121.4 939.3 1034.3 lutJ0.2 1071.4 683.8 782.0 805.4 512.4 621.3 562.2 784.5 Soluble coffee 11.8 11.5 18.5 20.8 23.2 34.2 39.2 37.1 31.4 43.6 31.7 44.0 52.8 41.1 Soybeans 304.5 65.9 310.1 289.6 213.4 1037.3 1786.1 2730.4 3333.3 3'639.5 2586.9 658.9 638.5 158.9 Soy oil - - - 2.7 6.7 60.0 90.9 2.3 264.5 497.7 502.2 503.6 533.7 744.3 Soy cake, meal 125.4 234.5 295.4 525.4 911.4 1405.3 1581.5 2030.9 3133.6 4373.9 5353.7 5419.0 5170.8 6581&9 Cocoa-beans 114.4 75.8 119.6 119.8 119.0 102.3 82.8 129.9 176.6 128.8 107.6 134.1 156.9 125.6 Cocoa paste - - - - - - 25.3 23.9 22.9 23.4 17.8 69.4 88.9 Cocoa butter 21.0 18.4 16.0 19.2 21.1 27.3 24.2 28.8 21.6 21.7 19.3 19.1 21.2 26.8 Chocolate - - - - 0.5 4.9 8.8 17.8 19.6 37.0 4.9 Oranges, fresh 45.0 36.3 28.5 36.7 64.1 66.6 41.9 39.5 73.1 36.4 35.6 48.0 89.6 Orange juice concentrate 18.6 30.1 23.2 33.5 77.4 87.2 121.0 108.5 180.9 209.8 213.5 335.6 292.2 401.0 Corn in natura 430.4 1238.0 649.6 1170.6 1279.7 172.1 41.0 1108.7 1147.9 1371.7 1420.0 14.7 9.9 c Sugar crystal - - - 1.0 70.7 480.5 444.4 487.1 279.5 205.8 293.5 183.4 110.8 568.9 Sugar, demerara 1001.3 1026.2 1099.0 1125.2 1190.6 2054.5 2353.6 1767.4 1235.1 600.8 1536.2 1164.0 1282.9 1582.0 Refined sugar - - - - - - 22.0 102.2 216.2 360.7 62S.0 614.1 435.6 611.9 Tobacco leaf 44.8 38.5 47.7 53.5 60.2 64.6 63.6 91.5 98.2 101.2 101.2 117.6 140.2 Cotton, uncarded and uncombed 199.8 271.1 485.9 395.4 276.3 342.2 348.3 214.5 113.9 11.6 38.9 49.5 12.5 (incl. residues) Cotton yarn 2.9 1.8 3.0 5.9 6.5 19.2 29.4 28.3 41.9 41.0 52.6 52.9 55.1 57.4 Cotton cloth 0.9 0.8 3.0 8.0 8.9 18.4 25.3 19.8 21.0 12.6 21.1 20.9 25.4 Sisal in natura 119.1 135.4 131.7 136.1 139.4 145.4 151.1 135.1 52.0 108.9 124.4 89.8 87.1 100.0 Sisal cord 7.5 7.8 11.8 14.1 15.6 19.7 28.9 37.2 21.1 60.4 73.0 70.7 96.2 76.6 Source: CACEX. - 206 - Table 2.5: Agriculture-based Exports Comprising at least l Percent of Total Exports by Rank, Otder anidPercent for Selected dYetr; 1964-68.to 1977 1964-68 1973 Exports % Total Exports % Total 1. Coffee beans 44.7 1. Coffee beans 21.7 2. Cotton 6.5 2. Sugar 9.6 3. Sugar 4.2 3. Soybeans 8.0 4. Lumber and wood products 3.5* 4. Soybran and cake 6.8 5. Cocoa beans 2.6 5. Raw meat products 3.8 6. Corn 1.7 6. Lumber and wood products 3.6* 7. CastQr oil 1.6* 7. Cotton 3.5 8. Sisal 1.4 8. Cotton textile goods 3.1* 9. Tobacco 1.4 9. Castor oil 2.0* 10. Wool 1.2 10. Shoes 1.5 11. Cocoa paste 1.2* 11. Cocoa beans 1.4 12. Rice 1.0 12. Processed meats 1.1* 13. Skins and hides 1.0 14. Processed cocoa 1.0* 15. Tobacco 1.0 16. Orange juice concentrate 1.0* 17. Sisal 1.0 Processed or manufactured products. - 207 - page 2 Table 2.5 1977 Exports % Total 1. Coffee 21.7 2. Soybran and cake 9.5* 3. Soybeans 5.9 4. Cocoa beans 3.6 5. Cotton textile products 3.3* 6. Instant coffee 2.7* 7. Soy oil 2.3* 8. Sugar 2.3 9. Processed sugar 2.0* 10. -Tobacco 1.6 11. Orange concentrate 1.5* 12. Lumber and wood products 1.5* 13. Shoes 1.4* 14. Raw meat products 1.4 15. Processed cocoa paste 1.4* 16. Processed cocoa liquor 1.4* 17. Corn 1.1 18. Processed meats 1.0* 19. Skins and hides 1.0 * Processed or manufactured products. Table 3.0: Aggregate Indexes of Agricultural and Food Prices, 1967-1980 (1966 = 100) 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 General Price Index 128 159 192 230 277 324 373 480 613 866 1236 1714 2639 5284 Producer prices (Sao Paulo): 113 137 182 221 277 358 522 657 848 1381 207841 2581-J 39632J 7932-a Crops 114 142 206 240 292 387 577 671 936 1748 2654 2930 4058 Animal products 112 130 154 199 258 323 455 641 741 932 1375 2163 3875 Wholesale prices - domestic 125 146 180 221 284 341 394 505 649 957 1373 2028 3195 6813 foodstuffs Consumer prices - food 123 150 186 218 270 323 388 498 644 865 1203 1691 2655 4867 (Sao Paulo) Consumer prices - food 123 138 171 214 262 308 353 482 605 862 1257 1766 2853 5345 (Rio de Janeiro) Deflated indices:-/a Producer Prices (Sao Paulo) 88 86 95 96 100 110 140 137 138 159 168- 151-a 5/ 150a/ ° - co Crops 89 89 107 104 105 119 155 140 153 202 215 171 154 A4imal products 88 82 80 87 93 100 122 134 121 108 111 126 147 Wholesale domestic foodstuffs 98 92 94 96 103 105 106 105 106 lll 1ll 118 121 129 Consumer food (S.P.) 96 94 97 95 97 100 104 104 105 100 97 99 101 92 Consumer food (R.J.) 96 87 89 93 95 95 95 100 99 100 102 103 108 101 a/ Because of change in weights, data for 1977 and after not comparable with previous years. b/ Deflated by General Price Index. Source: Conjuntura Economica. Table 3.Oa: NATIONAL INDEXES OF REAL PRICES RECEIVED BY FARMERS, SELECTED CROPS, 1966-1980 a/ (1966 = 100) Crop 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 Domestic Food Crops b/ 100 95 88 99 101 111 114 143 139 150 188 186 175 163 178 Rice 100 101 94 83 74 100 107 98 123 154 101 85 109 124 115 Bananas 100 102 93 92 89 97 95 127 142 183 198 170 188 181 167 White Potatoes 100 52 38 68 54 45 59 106 82 66 91 77 81 57 120 Black Beans 100 65 59 101 107 93 83 186 133 121 212 162 106 121 221 Oranges 100 106 109 126 133 146 146 159 152 122 142 167 164 151 120 Manioc 100 125 123 123 143 180 181 189 195 232 420 542 462 350 326 Corn 100 102 87 99 100 104 119 140 142 149 144 113 142 152 156 IWheat 100 94 90 90 87 79 74 76 91 104 94 87 89 78 66 Export & Industrial Crops b/ 100 90 104 112 129 125 130 170 184 183 278 332 243 218 199 Cotton 100 93 104 93 103 125 118 144 175 143 218 176 154 155 154 Peanuts 100 88 96 96 90 102 93 j55 144 150 126 165 169 138 107 Cocoa 100 91 136 175 117 82 106 198 235 165 260 507 367 308 222 Coffee 100 86 102 126 187 166 182 254 253 275 518 649 410 350 313 Sugar cane 100 88 95 99 103 95 93 95 105 129 133 127 124 123 132 Tobacco 100 98 115 118 105 98 126 155 154 168 168 186 205 169 136 a/ Annual averages deflated by General Price Index b/ Aggregated by value weights of 1973 (see Table 1.1). Source: FGV. - 21Q - Table 3.0b: National Producer Price Indexes, Selected Animal Products, 1966-1980ai (1966=100) Fattened Fattened Aggregate Year Cattle Swine Chicken Milk Wool Eggs Honey Index 1966 100 100 100 100 100 100 100 100 1967 89 98 94 95 83 93 156 92 1968 79 91 91 91 66 90 164 85 1969 74 97 74 95 79 85 164 85 1970 86 101 88 96 68 91 180 91 1971 99 101 87 98 60 91 185 96 1972 108 124 88 102 68 90 169 104 1973 139 134 106 114 151 106 197 127 1974 152 173 106 139 134 110 21.7 145 1975 126 139 97 156 69 97 217 132 1973 142 138 108 116 152 106 221 129 1974 155 180 114 141 134 107 247 148 1975 129 145 103 157 69 94 243 132 1976 112 120 93 137 77 93 209 115 1977 105 141 88 142 116 89 194 117 1978 136 131 90 142 103 87 196 128 1979 191 161 98 128 93 83 204 154 1980 170 138 84 133 87 71 199 140 a/ Annual averages deflated by General Price Index. First set of data for period 1966-1975 are calculated by average value weights of 1962-64; the second set of data for the period 1973-1980 apply value weights from the 1970 Agricultural Census. Source: FGV. Table 3.l.a: Avrage Producer Prices During Harvest Period for Selected Crops, Crop Years 1967/68 - 1978/79 (Current Cruzeiros) Crop/Unit/Period 1967/68 17(8/69 1969/70 1970/71 1971/72 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 Cotton, unginned (15 kg),b pril-Maya' 5.95 8.39 9.82 14.53 18.00 23.45 42.64 33.90 72.50 99.25 120.70 162.67 Rice (50 kg),.April - May- 13.50 13.50 15.50 18.75 28.00 27.77 45.15 79.16 82.00 93.00 148.25 231.00 Manioc flour (50 kg), Agril- AugustE/ 12.50 12.60 11.70 25.20 34.60 33.20 33.00 46.40 183.30 177.40 157.70 n.a. Corn (60 kg), March-May/ 5.20 7.20 8.40 11.39 15.40 18.27 29.33 36.09 45.77 56.60 102.40 138.60 Soybeans (60 kg). April-Mayb/ 12.92 14.60 17.13 22.75 31.25 68.00 51.25 70.50 86.77 213.39 206.50 291.30 Peanuts (25 kg), November-Marcha/ 6.74 9.29 10.40 13.75 15.22 22.08 31.27 43.45 48.36 82.80 129.08 176.15 Black beans (60 kg), November-Januaryd/ 13.00 19.65 51.73 41.00 46.83 62.02 146.97 94.21 185.60 445.86 244.60 396.80 a/ Sao Paulo b/ Rio Grande do Sul c/ Minas Gerais d/ Parana Source: FIBGE, CFP Table 3.lb: Average Real Producer Prices During Harvest Period for Selected Crops, Crop Years 1967/68-1978/79 (1967 Cruzeiros) Crop/Unit 1967/68 1968/69 1969/70 1970/71 1971/72 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 19787 Cotton unginned (15 kg) 5.78 5.87 5.70 7.12 1.46 8.22 11.64 7.44 11.44 10.65 9.57 8.83 Rice (50 kg) 11.22 9.44 9.00 9.19 11.61 9.73 12.35 17.37 12.94 9.98 11.76 12.54 Manioc flour (50 kg) 10.11 8.55 6.60 12.03 14.o6 11.46 8.75 9.85 27.52 18.42 11.92 n.a. Corn (60 kg) 4.37 5.06 4.90 5.62 6.42 6.44 8.19 8.oo 7.35 6.19 8.25 7.65 Soybeans (60 kg) 10.74 10.21 9.95 11.15 12.95 23.83 14.00 15.47 13.69 22.90 16.38 15.82 Peanuts (25 kg) 6.05 6.76 6.36 7.12 6.63 8.16 9.74 10.20 8.63 10.09 11.42 10.91 Black beans (60 kg) 11.94 14.48 32.19 21.57 20.75 23.04 47.12 22.58 34.30 56.23 22.30 25.55 r ~r a/ Nominal prices deflated by General Price Index, Domestic (F.G.V. #2) Source: Table 3.2.a and Getulio Vargas Foundation. Table 3, le; Index Qf eal yetage REQducel P~ce Th.qIng Yaryes t F'erod f OF. tc ted ~jCo F 1967168Q--978/79 (1967/68 =100) Crop/Unit 1967/68 1968/69 1969/70 1970/71 1971172 1972/73 1973/74 1974/75 1975/76 1976/77 1977/7 1978/79 Cotton unginned (15 kg) 100 102 99 123 129 1,42 201 129 198 184 166 153 TO Rice (50 kg) 100 84 80 82 1037 87 110 155 11 5 105 .12 N4an10c flour (50 kg) 100 85 11 L9 139 U3 87 97 272 182 118 n.a. Corn (60 kg) 100 116 112 129 14+7 147 187 183 168 1142 189 175 Soybeans (60 kg) 100 95 93 101+ 121 222 130 1441 127 213 1553 14+7 P>eanuts (25 kg) 100 112 105 11-8 110 135 161 169 i143 167 189 180 Black beans (60 kg) 100 121 270 180 174+ 193 395 189 287 4+71 187 214+ Source: Table 3.1,b Table 3.2a: Minimium Prices for Selected Crops. Crop Years 1967/68 - 1980/81 (Current Cruzeiros) Crop/Unit 1967/68 1968/69 1969/70 1970/71 1971/72 1972/73 1973/74 19 '4/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 Cotton, ginned (15 kg)a/ 17.51 20.70 22.62 30.80 44.00 50.16 90.87 103.20 139.05 232.20 319.90 427.80 633.00 Cotton, ungin7ed (15 kg)&/ 6.00 7.00 8.70 10.50 15.00 17.10 31.77 35.10 45.45 78.0G 100.20 135.00 201.90 475.20 P.ice (50 kg)b/ 9.18 11.83 15.01 16.58 22.12 30.00 37.00 57.00 71.00 100.00 130.00 182.00 320.00 720.00 Manioc flour (50 kg)--/ 3.07 4,68 5.91 6.79 12.23 21.00 22.50 19.50 37.00 76.00 93.50 120.00 Corn (60 kg)-/ 5.01 7.32 8.87 10.71 13.09 17.04 29.04 35.28 47.28 63.30 78.30 109.20 185.40 474.00 Soybeans (60 kg)e/ 8.17 10.23 12.82 17.12 24.80 30.00 36.00 60.00 75.00 96.00 112.20 150.00 3M5.00 660.00 Peanuts (25 kg)f! 5.17 6.39 7.99 9.97 13.00 17.00 24.00 34.75 45.00 63.00 76.50 108.00 180.00 325.00 Black beans (60 kg)R/ 15.91 20.50 25.00 39.83 45.00 49.20 75.00 97.80 122.40 214.80 276.00 369.00 612.00 1,800.00 a/ Type 5. Sao Paulo b/ From 1967/68 to 1970/71: medium grain; since 1971/72: long grain, type 2, Rio Grande do Sul. c/ From 1967/68 to 1970/71: thick flour, type 1; since 1971/72: industrial group, type 1, Minas Gerais. -From 1967/68 to 1976/77: type 3; 1977/78: type 2, Parana e/ Type 3, Rio Grande do Sul. f/ From 1967/68 to 1971/72: "grauda" class, tvpe 3; 1972/73: commom class, type 1; since 1973/74:"ventiladoll class, type 1. Sao Paulo. y/ Type 3, Parana Source: FIBGE, CFP. Table 3.2b: ReaL Minimum Prices at Harvest Time for Selected Crops, Crops Years 1967/68 - 1979/80 (1967 Cruzeiros) Crop/unit 1967/68 1968/69 1969/70 1970/71 1971/72 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 Cotton, ginned (15 kg) 14.56 14.48 13.13 15.09 18.24 17.58 24.81 22.65 21.94 24.92 25.36 23.22 18.17 Cotton. unginned (15 kg) 4.99 4.90 5.05 5.15 6.22 5.99 8.67 7.70 7.17 8.37 7.94 7.33 5.80 Rice (50 kg) 7.63 8.27 8.72 8.13 9.17 10.51 10.10 12.51 11.20 10.73 10.31 9.88 9.19 Manioc flour (50 kg) 2.48 3.18 3.33 3.24 4.97 7.25 5.97 4.14 5.56 7.59 7.07 5.96 n.a. Corn (60 kg) 4.21 5.14 5.17 5.28 5.46 6.01 7.92 7.82 7.59 6.92 6.31 6.o_3 5.48 Soybeans (60 kg) 6.79 7.15 7.45 8.39 10.28 10.51 9.83 13.17 11.83 10.32 8.90 8.15 9.05 Peanuts (25 kg) 4.64 4.65 4.89 5.i6 5.66 6.28 7.48 8.16 8.03 7.68 6.77 6.69 6.29 Black beans (60 kg) 14.61 15.11 15.56 20.95 19.94 18.28 24.05 23.44 22.62 27.09 25.16 23.76 22.61 a/ Nominal prices deflated by General Price Index, Domestic (F.G.V. #2) Source: Table 3.2.a and Getulio Vargas Fundation Table 3.2.c: Index of Real Minimium Prices for Selected Crops, Crop Years 1967/68 - 1979/80 (1967/68 = 100) Crop/Unit 1967/68 1968/69 1969/70 1970/71 1971/72 1972/73 1973/74 1974/75 1975/76 1976/77 1977178 1978/79 1979/80 Cotton, ginned (15 kg) 100 99 90 104 125 121 170 156 151 171 174 159 125 Cotton, unginned (15 kg) 100 98 101 103 125 120 174 154 144 168 159 147 116 Rice (50 kg) 100 108 114 107 120 138 132 164 147 141 135 129 120 Manioc flour (50 kg) 100 128 134 131 200 292 241 167 224 318 285 361 n.a. Corn (60 kg) 100 122 125 125 150 143 188 186 180 164 150 143 130 Soybeans (60 kg) 100 105 110 121. 151 155 145 194 174 152 131 120 133 Peanuts (25 kg) 100 100 105 11 122 135 161 176 173 166 146 144 136 Black beans (60 kg) 100 103 107 143 136 124 165 160 155 185 172 163 155 Source: Table 3.2.b Table 3.3a: Average Wholesale Prices During Marketing Period for Selected Crops, Crop Years 1967/68-1977/78 (Current Cruzeiros) Crop/Unit/Period 1967/68 1968/69 1969/70 1970/71 1971/72 1972/73 1973/74 1974/79 1975/76 1976/77 1977/78 Cotton, ginned (15 kg),-/ April - May 24.83 26.01 32.55 45.81 57.58 72.61 135,72 105.50 233.02 295.87 375.33 Rice (50 kg),b/May - ceptember 25.07 25.63 30.67 44.79 60.00 68.51 119.45 257.63 148.23 191.61 342.84 Manioc flour 50 kg),-' April - August 12.78 12.60 16.76 31.50 32.57 32.00 43.22 66.44 179.20 207.64 197.30 Corn (60 kg),- Muych - July 7.80 10.37 11.81 14.99 17.83 18.48 37.00 48.57 59.61 69.44 130.38 H Soybeans (60 kg),- May - September 15.60 18.60 21.34 29.10 34.20 84.91 67.56 80.46 109.76 154.83 219.36 3 Peanuts (25 kg),a/ December - April 16.05 23.05 25.28 - 33.25 41.85 54:05 82.60 102.20 113.30 185.60 321.05 Black beans (60 kg), November - February 17.75 23.98 52.82 62.80 43.81 54.91 186.79 113.18 144.61 312.23 286.83 a/ Sao Paulo (Sao Paulo) b/ Porto Alegre (Rio Grande do Sul) c/ Belo Horizonte (Minas Gerais) d/ Curitiba (Parana) Source: FIBGE, CFP Table 3.3b: Average Wholesale Prices in Real Terms During Marketing Period for Selected Crops. Crop Years 1967/68-1977/78 (1967 Cruzeiros) Crop/Unit 1967/68 1968/69 1969/70 1970/71 1971/72 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 Cotton, ginned (15 kg) 20.71 18.19 18.90 22.44 23.87 25.96 37.58 23.70 37.24 31.51 29.90 Rice (50 kg) 19.96 17.07 16.97 21.05 24.07 23.84 31.6o 54.49 21.65 19.48 25.34 Manioc flour (50 kg) 10.35 8.55 9.45 15.03 13.23 11.26 1.64 14.40 27.14 21.50 15.r0 a Corn (60 kg) 6.42 7.16 6.77 7.26 7.54 6.57 10.21 10.78 9.57 7.36 10.22 Soybeano (60 kg) 12.42 12.39 11.80 13.68 13.71 29.55 17.88 17.02 16.03 15.74 16.21 Peanuts (25 kg) 14.09 16.58 15.12 16.98 17.96 19.97 25.26 24.03 19.82 21.78 27.68 Black beans (60 kg) 16.11 17.54 32.16 32.82 19.25 20.70 60.06 27.39 26.63 38.80 25.86 a/ Nominal prices deflated by General Price Index, Domestic (FGV #2) Source: Table 3.3a and Getulio Vargas Foundation. Table 3.3c: Index of Real Average Wholesale Prices During Marketing Period for Selected Crops, Crop Years 1967/68-1977/78 (1967/68 = 100) Crop/Unit 1967/68 1968/69 1969/70 1970/71 1971/72 1972/73 1973/74- 1974/75 1975/76 1976/77 1977/78 Cotton, ginned (15 kg) 100 88 91 108 1l5 125 181 114 180 152 144 x Rice (50 kg) 100 86 85 105 121 119 158 273 108 98 127 Manioc flour (50 kg) 100 82 91 145 127 109 112 139 262 208 145 Corn (60 kg) 100 112 105 113 114 102 159 168 1146 115 159 Soybeans (60 kg) 100 100 95 110 110 238 144 137 129 127 131 Peanuts (25 kg) 100 118 107 121 127 142 179 171 141 155 196 Black beans (60 kg) 100 109 200 204 119 128 373 170 . 165 241 161 Source: Table 3.3b. Table 3.4a: Average Retail Prices During Marketing Period for Selected Agricultural Products, 1970/71-1977/78 (Current cruzeiros) Product/Unit/Period 1970/71 1971/72 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 a! Cotton oil (J-kg can)-/, April-May 3.24 3.33 3.37 4.78 7.16 7.49 13.47 17.02 Rice (50 kg)-, May-September 58.95 88.35 94.63 167.00 261.79 239.64 275.68 416.35 Manioc flour (50 kg)-/, April-August 38.60 45.10 52.80 71.90 96.30 246.70 268.70 262.40 Corn (60 kg)-/, March-July 23.16 29.52 35.04 57.36 243.36 313.32 422.88 479.04 Soybean oil (1-kg can)-, May-September 3.16 3.04 3.19 6.29 7.58 7.97 13.18 16.17 Peanut oil (1-kg can)a/, December-April 3.26 3.72 3.69 4.15 8.85 8.96 14.46 17.92 Black beans (60 kg)-- , November-February 87.00 81.90 85.65 279.30 192.90 243.75 370.80 424.50 a/ Sao Paulo (Sao Paulo) b/ Porto Alegre (Rio Grande do Sul) c/ Belo Horizonte (Minas Gerais) d/ Curitiba (Parana) Source: FIBGE Table 3.4b: Average Retail Prices in Real Terms During Marketing Period for Selected Agricultural Products, 1970/71-1977/78&' (1967 cruzeiros) Product/Unit 1970/71 1971/72 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 Cotton oil (1-kg can) 1.80 1.54 1.33 1.64 1.91 1.56 1.99 1.76 Rice (50 kg) 32.75 49.90 37.80 57.39 69.81 50.03 40.72 43.10 Manioc flour (50 kg) 21.44 20.88 20.87 24.71 25.68 51.50 39.69 27.16 Corn (60 kg) 12.87 13.67 13.85 19.71 64.90 65.41 62.46 49.59 Soybean oil (1-kg can) 1.76 1.41 1.26 2.16 2.02 1.66 1.95 1.67 Peanut oil (1-kg can) 1.81 1.72 1.46 1.43 2.36 1.87 2.14 1.86 Black beans (60 kg) 48.33 37.92 33.85 95.98 51.44 50.89 54.77 43.94 a/ Nominal prices deflated by General Price Index, Domestic (FGV #2). Source: Table 3.4a. Table 3.4c: Index of Real Avetag Rtitail1Price-s Durin Matketin *Period tor Selected 1&gricuItEural Produ-cts, 19700/71-1977/7e (1970/71=100) Product/Unit 1970/71 1971/72 1972/73 1973/74 1974/75 1975/75 1976/77 1977/78 Cotton oil (1-kg can) 100.00 85.56 78.89 91.11 106.11 86.67 110.56 97.78 Rice (50 kg) 100.00 124.89 115.42 175.24 213.16 152.76 124.34 131.60 Manioc flour (50 kg) 100.00 97.39 97.34 115.25 119.78 240.20 185.12 126.70 Corn (60 kg) 100.00 106.22 107.61 153.15 504.27 508.24 485.24 385.31 Soybean oil (1-kg can) 100.00 80.11 71.59 122.73 114.77 94.32 110.80 94.89 Peanut oil (1-kg can) 100.00 95.03 80.66 79.01 130.39 103.31 118.23 102.76 Black beans (60 kg) 100.00 78.46 70.04 198.59 106.43 105.30 113.33 90.92 Source: Table 3.4b. Table 4.1: Net Value of Agricultural Output and Total Credit to Agricultural Producers and Cooperatives, 1969-1979 (Millions of cruzeiros) 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 Current prices: Net Value of Agricultural Output 14366 17127 23973 30560 44271 65657 87821 137703 236849 320670 529555 Volume of Rural Credit 6489 9248 12869 18669 30334 48273 89997 130226 165859 233942 448731 Credit as % of Net Output 45 54 54 61 69 74 102 95 70 73 85 Bank of Brazil Credits to Agriculture 3032 4306 6506 10282 15780 26415 53623 79148 105089 148930 291142 BB as % Total Agricultural Credit 47 47 51 55 52 55 60 61 63 64 65 Constant prices of 1965-67: Net Value of Agricultural Output 7482 7447 8655 9432 11869 13679 14326 15901 19163 18709 20067 Index (1969=100) 100 100 116 126 159 183 J91 213 256 250 268. Volume of Pural Credit 3380 4021 4646 5762 8132 10057 14681 15038 13419 13649 l70041 Index (1969=100) 100 119 137 170 241 298 434 445 397 404 503M1 Bank of Brazil Credit to Agriculture 1579 1872 2349 3173 3426 5503 8748 9139 8502 8689 11032 Index (1969=100) 100 119 149 201 217 349 554 579 538 550 699 Source: Central Bank; Bank of Brazil; FGVT. Table 4.2: Total Credit Flows to Agricultural Producers and Cooperatives by Subsector, 1969"1979 (Ra.I Ions or crumzeros I Current Prices \Prides- (1965/67) -a Index of Real Credit (19.69=1Q0) Years Crops Livestock Total Crops Livestock Total Crops Livestock Total 1969 4464 2025 6489 2325 1055 3380 100 100 100 1970 6640 2608 9248 2887 1134 4021 124 107 119 1971 9209 3660 12869 3325 1321 4646 143 125 137 1972 13436 5232 18669 4147 1615 5762 178 153 170 1973 21275 9059 30334 5704 2429 8132 245 230 241 1974 34805 13467 48273 7251 2806 10057 312 266 298 1975 63462 26535 89997 10353 4329 14681 445 410 434 1976 92953 37273 130226 10734 4304 15038 462 408 445 1977 129197 36661 165859 10453 2966 13419 450 281 397 1978 171269 62674 233942 9992 3657 13649 430 347 404 1979 326583 122147 448731 12375 4629 17004 532 439 503 a! Deflated by FGY Index No. 2. Source: Central-Bank, Table 4.3: Total Agricultural Credit, by Function, 1969-1979 (Millions of cruzeiros) --------------------Current Prices------------------- ------------Constant Prices (1965/67)------------- Production investment Subtotal Marketing Total Production Investment Subtotal Marketing Total Years Credits Credits (1)+(2) Credits (4)+(5) Credits Credits Credits 1969 3014 1823 4837 1652 6489 1570 949 2519 860 3380 1970 4124 2510 6634 2613 9248 1793 1091 2884 1136 4021 1971 5601 3797 9397 3473 12869 2022 1371 3392 1254 4646 1972 7772 6174 13947 4721 18669 2399 1906 4305 1457 5762 1973 12954 10037 22991 7343 30334 3473 2691 6164 1969 8132 1974 21735 14613 36348 11926 48273 4528 3044 7572 2485 10057 1975 39446 28123 67569 22428 89997 6435 4588 11023 3659 14681 1976 54958 42217 97174 33052 130226 6346 4875 11221 3817 15038 1977 78428 40236 118664 47194 165859 6345 3255 9601 3818 13419 1978 111566 58424 169990 63952 233942 6509 3409 9918 3731 13649 1979 225694 112105 337799 110932 448731 8552 4248 12800 4204 17004 ----------------- Percent---------------------------- ----------------------Index (1969i100)--------- 1969 46.4 28.1 74.5 25.5 100.0 100 100 100 100 100 1970 44.6 27.1 71.7 28.3 100.0 114 115 114 132 119 1971 43.5 29.5 73.0 27.0 100.0 129 144 135 146 137 1972 41.6 33.1 74.7 25.3 100.0 153 201 171 169 170 1973 42.7 33.1 75.8 24.2 1.00.0 221 284 245 229 241 1974 45.0 30.3 75.3 24.7 100.0 288 321 301 289 298 1975 43.8 31.2 75.1 24.9 100.0 410 483 438 425 434 1976 42.2 32.4 74.6 25.4 100.0 404 514 445 444 445 1977 47.3 24.3 71.5 28.5 100.0 404 343 381 444 397 1978 47.7 25.0 72.7 27.3 100.0 415 359 394 434 404 1979 50.3 25.0 75.3 24.7 100.0 545 448 508 489 503 Source: Central Bank. Table 4.4: Crop Credits to Producers and Cooperatives, National System of Rural Credit, by Crop, 1975-1979 (Millions of cruzeiros) --------------1975 -------------- ------------ 1976 --------------------------1977 -------------- -------------197----------------- -------------1979-------------- Produc- Market- Invest- Produc- Market- Invest- Produc- Market- Invest- Produc- Market- Invest- Produc- Market- Invest- tion ing ment tion ing ment lI tion ing ment tion ing ment tion ing ment b/ Crop credit credit credit Total- credit credit credit Total- credit credit credit Total-/ credit credit credit Total credit credit credit TotalJ Wheat 3810 6 3816 5674 15 5689 6854 31 6885 9768 27 9795 19207 77 19284 Rice 5377 1724 7101 7047 3859 10906 10332 3621 13953 11674 3470 15144 25715 5613 31326 Corn 3292 1033 4325 4738 2037 6775 5205 2348 7553 7678 1=,i 9209 17778 'P38 21716 Manioc 128 14 142 389 7 396 607 65 672 671 671 3058 3058 White potato 431 431 720 720 1136 1136 1736 1736 2727 2727 Peanuts 224 45 269 172 90 262 272 105 377 633 b33 15 3 1536 Black beans 431 130 561 872 19 891 2182 195 2377 2651 2651 5557 5587 Fruits 632 90 722 1006 151 1157 1784 224 2008 3023 499 3522 6462 770 7232 Soybeans 5325 6014 11339 9018 7823 16841 13042 11833 24875 18072 12325 30307 39536 178c0 57396 Cocoa 280 187 467 430 287 717 760 690 1450 1552 1 46 2700 2282 i 4I18 Coffee 2941 2033 1226 6200 5059 2357 2267 9683 8345 2075 3274 13694 10731 3876 2209 16816 24178 4287 853 29°18 Tobacco 457 457 664 664 938 938 2139 2139 5186 Sugarcane 3282 3282 4553 4553 5645 5645 8419 8419 12709 12709 Cotton 1443 2204 33 3680 3076 3050 102 6228 4949 6036 162 11147 540o 7906 / 173 15488 11059 a.-28a/ 195 / 24882 Other crops 1112 3451- 854- 5417- 1563 4526- 1110-/ 7201-/ 2722 7876'-/ 1742-/12340 5201 13251a 25251a/ 20980 11566 751-,tr 5849=' 42549 :ioncrop-speciric credits 1447 472 13337 15256 2014 471 17786 20271 3440 972 19735 24147 5578 1516 26165 33059 9172 2664 48123 59959 Total 30610 17125 15727 63462 46994 24256 21703 92953 6821.3 35157 25827 129197 94938 43612 32719 171269 195756 73201 57626 326583 ai May include credits to some crops specified above. b/ Some specific crop totals may be understated for lack of sufficient disaggregation of marketing and investment credits. Source: Central Bank; Bank of Brazil. Table 4.5a: Crop Credits to Producers and Cooperatives, by Type and Region, 1977-1979 (Millions of cruzeiros) Production Credit Investment Credit Marketing credit Total Crop Credit Region 1977 1978 1979 1977 1978 1979 1977 1978 1979 1977 1978 1979 North 737 1388 5193 785 1885 2893 506 457 867 2028 3729 8953 Northeast 8332 12270 24317 4530 5843 12774 3335 4769 8071 16197 22882 45162 Southeast 22308 30697 58958 8655 8994 14799 12406 17490 30347 43369 57180 104104 (Of which: Sao Paulo)(14944) (20831) (39688) (4825) (5726) (9527) (10445) (14742) (25673) (30214) (41299) (74888) South 30259 41260 87360 9353 12245 19446 17406 19580 30279 57018 73084 137085 Center-West 6576 9324 19927 2505 3753 7714 1503 1316 3638 10584 14394 31279 Total 68213 94938 195756 25827 32719 57626 35157 43612 74201 129197 171269 326583 Regional Distribution -% North 1.1 1.5 2.7 3.0 5.8 5.0 1.4 1.0 1.2 1.6 2.2 2.7 Northeast 12.2 12.9 12.4 17.5 17.9 22.2 9.5 10.9 11.0 12.5 13.4 13.8 Southeast 32.7 32.3 30.1 33.5 27.5 25.7 35.3 40.1 41.5 33.6 33.4 31.9 (of which: Sao Paulo)(21.9) (21.9) (20.3) (18.7) (17.5) (16.5) (29.7) (33.8) (34.7) (23.4) (24.1) (22.9) South 44.4 43.5 44.6 36.2 37.4 33.7 49.5 44.9 41.4 44.1 42.7 42.0 Center-West 9.6 9.8 10.2 9.7 11.5 13.4 4.3 3.0 5.0 8.2 8.4 9.6 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Source: Central Bank Table 4.5b: Livestock Credits to Producers and Cooperatives, by Type and Region, 1977-1979 (Millions of cruzeiros) Production credit Investment credit Ma-keting credit Total Livestock Credit Region 1977 1978 1979 1977 1978 1979 1977 1978 1979 1977 1978 1979 North 204 357 566 875 1246 2194 27 45 70 1106 1647 2830 Northeast 1178 1574 3109 3633 5919 14139 122 210 470 4933 7703 17718 Southeast 4597 7212 12772 4725 9292 18061 7574 12610 20596 16897 29113 51428 (Of which: Sao Paulo) (2336) (4135) (6731) (2061) (3991) (7183) (3723) (6276) (11064) (8121) (14402)(24978) South 2904 5447 10279 2321 4652 10424 3133 5155 11685 8357 15254 32389 Center-West 1333 2039 3211 2855 4596 9661 1181 2321 4910 5369 8956 17782 Total 10216 16628 29938 14409 25705 54479 12037 20341 37731 36661 62674 122147 Regional Distribution - North 2.0 2.1 1.9 6.1 4.8 4.0 0.2 0.2 0.2 3.0 2.6 2.3 m Northeast 11.5 9.5 10.4 25.2 23.0 26.0 1.0 1.0 1.2 13.5 12.3 14.5 Southeast 45.0 43.4 42.7 32.8 36.1 33.2 62.9 62.0 54.6 46.1 46.5 42.1 (Of which: Sao Paulo) (22.9) (24.9) (22.5) (14.3) (15.5) (13.2) (30.9) (30.9) (29.3) (22.2) (23.0) (20.4) South 28.4 32.8 34.3 16.1 18.1 19.1 26.0 25.3 31.0 22.8 24.3 26.5 Center-West 13.0 12.3 10.7 19.8 17.9 17.7 9.8 11.4 13.0 14.6 14.3 14.6 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Source: Central Bank Table 4.5c: Total Rural Credits to Producers and Cooperatives, by Type and Region, 1977-1979 (Millions of cruzeiros) Production credit Investment credit Marketing credit Total Credit Region 1977 1978 1979 1977 1978 1979 1977 1978 1979 1977 1978 1979 North 941 1744 5759 1660 3130 5087 533 502 937 3134 5376 11783 QT-'-4sV 9510 13844 27427 8163 11762 26913 3457 4979 8541 21130 30585 62880 Southeast 26905 37909 71730 13380 18286 32860 19980 30099 50943 60266 86293 155532 (Of which: Sao Paulo) (17280) (24966) (46419) (6886) (9716)(16709) (14168) (21018) (36737) (38335) (55701) (99865) South 33163 46706 97640 11674 16897 29870 20539 24735 41964 65375 88338 169474 Center-West 7909 11363 23138 5360 8349 17375 2684 3637 8548 15953 23350 49061 Total 78429 111566 225694 40236 58424 112105 47194 63952 110932 165859 233942 448731 Regional Distribution - North 1.2 1.6 2.6 4.1 5.4 4.5 1.1 0.8 0.8 1.9 2.3 2.6 < Northeast 12.1 12.4 12.2 20.3 20.1 24.0 7.3 7.8 7.7 12.7 13.1 14.0 Southeast 34.3 34.0 31.8 33.3 31.3 29.3 42.3 47.1 45.9 36.3 36.9 34.7 (Of which: Sao Paulo) (22.0) (22.4) (20.6) (17.1) (16.6) (14.9) (30.0) (32.9) (33.1) (23.1) (23.8) (22.3) South 42.3 41.9 43.3 29.0 28.9 26.6 43.5 38.7 37.8 39.4 37.8 37.8 Center-West 10.1 10.2 10.3 13.3 14.3 15.5 5.7 5.7 7.7 9.6 10.0 10.9 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Source: Tables 4.5a and 4.5b. Table 4.6: Bank of Brazil and Private Commercial Bank Loans Outstanding to Agriculture, End-of-Year 1971-1979 (Millions of cruzeiros) Bank of Brazil Private Commercial Banks Total Year-end Crop Livestock Crop Livestock Crop Livestock credits credits Total credits credits Total credits credits Total Current prices: 1971 8564 2584 11148 4141 2267 6408 12705 4851 17556 1972 11584 4033 15617 5666 3155 8821 17250 7188 24438 1973 17017 6186 23203 8301 5178 13479 25318 11364 36682 1974 32504 9837 42341 12919 7658 20577 45423 17495 62918 1975 51549 20399 71948 20311 12829 33140 71860 33228 105088 1976 83265 31488 114753 25347 18911 44258 108612 50399 159011 1977 130501 39136 169637 34268 23381 57649 164769 62517 227286 1978 171336 54711 226047 41465 30711 72176 212801 85422 298223 1979 304161 86525 390686 i>.a. n.a. n.a. n.a. n.a. n.a. Constant prices (1965/67): 1971 2883 870 3752 1394 763 2157 4276 1633 5909 1972 3370 1173 4544 1649 918 2566 5019 2091 7110 1973 4286 1558 5845 2091 1304 3395 6377 2862 9240 1974 6088 1842 7931 2420 1434 3854 8508 3277 11785 1975 7461 2953 10414 2940 1857 4797 10401 4809 15210 1976 8238. 3115 11353 2508 1871 4379 10745 4986 15731 1977 9302 2789 12091 2442 1667 4109 11744 4456 16200 1978 8673 2769 11443 2099 1555 3654 10772 4324 15096 1979 8689 2472 11161 n.a. n.a. n.a. n.a. n.a. n.a. Indices of real credit outstanding (1971=100) 1971 100 100 100 100 100 100 100 100 100 1972 117 135 121 118 120 119 117 128 120 1973 149 179 156 150 171 157 149 175 156 1974 211 212 211 174 188 179 199 201 199 1975 259 339 278 211 243 222 243 294 257 1976 286 358 303 180 245 203 251 305 266 1977 323 321 322 175 218 190 275 273 274 1978 301 318 305 151 204 169 252 265 255 1979 301 284 297 n.a. n.a. n.a. n.a. n.a. n.a. Source: Central Bank Table 4.7: Crop Credit to Producers and CooPer-ti-es fron Book of Brazil, by Crop, 1975-1979 (Millions of croneiros) --- -----1975 ----------1976--------------------- 1977 --------------- 1978 -----------1979---- Production l6orketing Investment b Production Marketing Investotnt Production Marketing Invest-ent Prodoction Marketing Investoent b roduction M-rketig Inve1 tent Crop Credit Credit Credit Total- Credit Credit Credit _a Crit Credit Cd Tota CrCreditCet o- Credit Credit Credit Totl' Whbeat 3,271.9 3,271.9 4,825.7 4,825.7 5,968.9 5,968.9 8,785.4 89785.4 17,236.4 17,236.4 Rice 4,751.0 1,431.3 6,182.3 6,501.1 3,265.5 9,766.6 9,888.0 3,017.9 12,905.9 11,044.6 2,529.6 13,574.2 24,037.2 3,343.4 27,39o.6 Corn 2,502.4 622.0 3,124.4 3,981.1 1,333.2 5,314.3 4,306.8 1,813.3 6,120.1 6,313.8 864.2 7,178.0 15,005.2 2,128.7 17,133.9 Hanioc 111.0 13.7 124.7 339.7 7.1 346.8 535.8 64.8 600.6 584.5 145.7 730.2 2,775.8 78.5 2,854.3 White potato 186.5 186.5 319.2 319.2 550.3 550.3 952.5 952.5 1,543.7 1,543.7 Peanuts 147.1 45.3 192.4 134.3 90.3 . 224,6 191.2 105.0 296.2 447.3 142.2 589.5 5,075.8 991.9 6,067.7 Black beans 376.2 129.5 505.7 763.2 19.9 783.1 1,950.6 194.9 2,145.5 2,433.6 837.4 3,271,0 4,403-3 4,403.3 Fruits 315.0 315.0 577.6 577.6 1,101.9 1,101.9 2,004.5 2,004.5 35,461.1 7,805.1 43,266.2 Soybeans 3,907.4 3,895.8 7,803.2 7,426.0 4,622.5 12,048.5 10,623.2 7,310.8 17,934.0 16,928.4 6,700.2 23,628.6 2,128.2 2,128.2 Coco. 249.5 249.5 394.3 394.3 726.5 726.5 1,485.3 1,485.3 18,594.9 18,594.9 Coffe. 2,172.0 2,172.0 4,441.1 4,441.1 6,518.5 6,518.5 8,234.3 8,234.3 2,710o.4 2,710o 4 Tobacco 206.9 206.9 447.9 447.9 668.6 668.6 1,651.3 1,651.1. 9,801.8 9,801.8 Sogarcane 1,834.6 1,834.6 2,937.4 2,937.4 3,836.5 3,836.5 6,060.9 6,060.9 8,992.1 10,0560 8992.1 Cotton 1,038.3 1,452.1 2,490.4 2,467.2 1,634.0 4,101.2 3,900.6 4,051.2 7,951.8 4,207.5 5,677.1 / 9,88416 10,25o.4 3,237!/ 13,483 Otber crops 459.8 1,214.0-/ 1,672.8./ 832.5 1,215.6.9/ 2,048.1 1,857.4 1,205.18! 3,06250/ 2,975.4 1,217.3_ 4 1927 13 Noncrop-specific credits 145.7 238-3 384.0 279.0 248.5 527.5 1,737.0 291.2 2,028.2 3,782.8 691.1 4,473.9 6,013.5 3,485.4 9,498.9 Total 21,674.3 9,042.0 10,384.6k/ 41,100.9 36,667.3 12,436.6 14,016.5b/ 63,120.2 54,361.8 18,054.2 18,463.4-/ 90,879.4 77,892.1 18,804.8 25,240.8-/ 121,937.7 164,029.6 31,126.8 45,032.1_b 240,188.5 a/ May include credits to so-e crops specified above. b/ Breakdown of investment credits by crop is not available. Source: Bank of Brazil. - 232 - a/ Table 4.8a: Credits Conceded Under Minimum Price Program, Center-South, by Crop and Type of Beneficiary, 1967/68 - 1978/79 (Millions of eruzeiros) Crop and Type of C R 0 P Y E A R S Beneficiary 1967/68 1968/69 1969/70 1970/71 1971/72 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 Cotton (ginned and ! unginned) 38.5 43.0 50.5 99.8 213.5 144.2 508.4 1063.4 | 847.7 2733.3 j 3597.1 6749.3 Producers and Cooperatives 19.5 12.5 17.0 33.2 1 65.3 36.7 150.9 268.5 r149.4 627.7 |465.6 1164.2 Processors 19.0 30.4 33.6 66.6 148.2 107.5 357.5 794.9 698.3 2105.6 3131.5 5585.1 Peanuts 11.4 15.3 18.0 33.6 30.6 14.4 40.2 43.4 90.0 i 115.4 134.5 411.1 Producers and Cooperatives 0.2 0.3 0.7 1.1 3.2 0.2 1.1 3.1 6.7 | 4.9 14.1 64.3 Processors 11.1 15.0 17.3 32.5 27.3 14.2 39.0 40.3 83.3 110.5 130.4 346.8 Rice 67.1 105.0 171.2 159.5 286.5 433.8 486.4 1156.6 3003.1 2787.3 2558.1 3690.3 Producers and | Cooperatives 43.5 78.3 133.8 104.8 193.7 289.2 321.2 766.4 2385.9 2053.0 1490.2 2263.4 Processors 23.6 26.8 37.4 54.7 92.7 144.6 165.2 390.2 617.2 734.3 1067.9 1426.9 Manioc (flour and Paste) 0.6 0.6 0.6 0.4 2.3 46.9 19.0 13.9 7.0 54.1 105.1 72.1 Producers and Cooperatives 0.5 0.4 0.6 0.3 1.5 27.1 1.3 0.11 0.3 7.8 i 34.5 6.8 Processors 0.1 0.2 0.0 0.2 0.8 19.7 17.8 13.9 f 6.7 46.3 70.6 65.3 Black Beans 2.2 1.0 2.4 9.7 22.0 3.0 37.9 125.0 20.1 195.1 770.8 896.9 Producers and Cooperatives 2.2 1.0 2.4 9.7 22.0 3.0 37.9 125.0 20.1 195.1 736.8 896.9 Processors - - - 0.1 - - - - - - 34.0 - Corn 21.8 13.5 46.4 28.0 53.8 113.9 389.4 565.8 1325.2 1765.2 i 828.6 2175.2 Producers and Cooperatives 19.4 10.3 43.4 23.4 41.3 69.8 334.6 485.7 990.7 1549.0 413.7 1523.3 Processors 2.4 3.2 3.0 4.5 12.5 44.1 54.8 80.1 334.5 216.2 414.9 651.9 Soybeans 12.3 22.3 46.8 135.2 265.7 2.5 892.0 3369.3 14626.7 7370.5 6975.3- 9868.3 Producers and Cooperatives 2.1 7.9 20.1 73.6 139.8 0.9 387.2 2635.6 3246.4 5247.0 4069.8 6111.4 Processors 10.1 14.4 26.7 61.6 125.9 1.6 504.7 733.7 1380.3 2123.5 2905.5 3756.9 b/ b/ b/ c/ c/ c/ d/ e/ f/ E/ h Other 0.0 3.9 6.9 5.3 1.8 7.0 53.6 122.3 208.8 2 585.1 1288.3 Producers and Cooperatives 0.0 0.0 0.0 0.0 0.4 3.3 26.1 37.2 102.4 139.1 1 213.0 440.0 Processors - 3.9 6.9 5.2 1.4 3.7 27.4 85.1 106.6 128.5 372.1 848.3 TOTAL 153.8 204.5 342.9 471.5 876.1 765.5 2426.8 6459.8 10,128.6 15288.5 15554.6 25151.5 Producers and Cooperatives 87.4 110.6 217.9 246.1 467.3 430.1 1260.4 4321.6 6,901.7! 9823.6 7427.7!12470.3 Processors 66.3 93.9 125.0 225.4 408.8 335.4 1166.4 2138.2 3,227.0 5464.9 8126.9!12681.2 a/- Includes Southeast, South, and Center-West. - Castor beans. c/ - Castor beans and Sorghum. d/- Ramie, Sisal, Sorghum, Silk Fiber and Castor Beans. e/ - Oats, Barley, Silk Fiber, Castor Beans, Mint Oil, Ramie, Sisal, Carnauba wax and Sorghum. - Garlic, Oats, Barley, Rye, Sorghium, Sunflower seed, Castor Beans, Mint Oil, Ramie, Silk Fiber, and Sisal. - Garlic, Barley, Sorghum, Castor Beans, Jute, Ramie, Silk Fiber. Sisal, Carnauba wax, and, gr-ape derivatives. hJ- Garlic, Oats, Brazilnuts, Parley, Rye, Silk Fiber, Jute, Castor beans, Ramie, Potato, Sisal, Sorghum, Grape derivatives. Source: CFI' -233- Table 4. 8b:- Distribution of Credits Under Minitmum Price Program, Center-South, 1967/68 - 1978/79 (Percent) Crop and Type of C R 0 P Y E A R S Beneficiary 196/6 196869 969/70[1970/71.~l 737_____ 1973/74 '1974/75- 1957 7/7 177/78 1987 Cotton 25.0 21.0 114.7 21_2 24.4 18.8 209 1. 84 17.9 23.1 26.8 Producers and Cooperatives (50.7)1 (29.1) 1(33.6) (33.3) 1(30.6) [(25.4) '(29.7) (25.3) '(17.6) (23.0) (12.9) (17.2) Processors (49.3) (70.9) (66.4) (66.7) 1(69.4) 'I(74.6) (70.3) (74.7) :'(82.4) (77.0) (87.1) (82.8) Peanuts 7.4 7.5 5.2 7.1 3.5 1.9 1.i 07 0.9 0.8 0.9 1.6 Producers and Cooperatives (2.0). 2.2) (3.8> 3.3) !(10.6) (1.2) (2.8) (7.1) 1( 7.4) (4.2) (3.0) (15.6) Processors (98.0) (97.8) (96.2) (96.7) i(89.4) (98.8) 1(97.2) (92.9) (92.6) (95.8) (97.0) (84.4) Rice 43.6 51.3 49.9 1 33.8 .132.7 56.7 20.0 17.9 29.6 18.2 16.4 14.7 Producers and Cooperatives (64.8) (74.5) (78.1) (65.7) 1(67 .6) (66.7) :(66.0) (66.3) (79.4) (73s.7) (58.3) (61.3) Processors (35.2) (25.5) (21.9) (34.3) 1(32.4) (33.3) 1(34.0) (33.7) (20.6) (26.3) ([41.7) (38.7) Manioc 0.4 0.3 0.2 0.1 0.3 6.1 0.8 0.2 0.1 0.4 I 0.7 0.3 Producers and Cooperatives (88.0) (61.2) 917 66)168 (57 () 6.6) (0.6) (4.5) (14.4) (32.8) (9.4) Processors (12.0) (38.8) (8.3) (35.4) 1(33.2) (42.1) (93.4) (99.4) ~(95.5) (85.6) (67.2) (80.6) Black Beans 1.4 0.5 0.7 i 2.1 2.5 0.4 16 1.9 0.2 1.3 5.0 3.6 Producers and[ Cooperatives (100.0) 10O) (100.0) (99.2) (100.0)! (100.O)j (100.0)'(0-0! (10o) (100.0) (95.6) (100.0) Processors ( ,(-)(-) 0.8) 1 ( ~ (- )(- )(- ) ) C.. *4.,4) ( Corn 14.2 6.6 13.5 5.9 6.1 14.9 16.0 8.8 13.1 1. . . Producers and Cooperatives (89.0) (76.2) (93.5) (83.8) (76.7) (61.3) (85.9) (85.8) (74.8) (87.8) (49.9) (70.0) Processors (11.0) (23.8) ( 6.5) (16.2) (23.3) (38.7) (14.1) (14.2) (25.2) (12.2) (50.1) (30.0) Soybeans 8.0 10. 9 13.6 28.7 30.3 0l 3 36.8 52.2 45.7 4R.2 44.8 39.2 Producers and Cooperatives (17.5) (35.4) (43.0) (54.4) -(52.6) (36.6) (43.4) (78.2) (70.2) (71.2) (58.3) (61.9) Processors (82.5) (64.6) (57.0) (45.6) !(47.4) (63.4) I(56.6) (21.8) (29.8) (28.8) ([41.7) (38.1) Other 0.0 1.9 2.0 1.1 0.2 0.9 1, 2.2 1.9 2.1 1.8 3.8 5.1 Producers and I Cooperatives (100.0) (1.1) (0.0) (0.4) '(20.7) (47.6) (48.8) (30.4) (48.9) (52.0) (36.4) (34.2) Processors (- )(98.9) (100.0) (99.6) :(79.3) (52.4) (51.2) (69.6) (51.1) ([48.0) (63.6) (65.8) TOTAL 100.0 100.0 '100.0 100.0 100.0 100.0 100.0 I10.0 11____ 100.0 100.0 100.0 Producers and Cooperatives (56.9) (54.1) (6.) (52.2) (53.3) (62 (5.) (66.9) (68.1) (43 4-) (96 Processors (43.1) (45.9) (36.4) (47.8) (46.7) (43.8) (48.1) (33.1) I(31.9) (57 5.) (04 Source: Table 4.1 a. - 234 - Table 4.9a: Credits Conceded Under Minimum Price Program, North-Northeast, by Crop and Type of Beneficiary, 1968/69 - 1979 (Millions of Cruzeiros) Crop and Type of Beneficiary C R 0 P Y E A R S 1968/69 1969/70 1970/71 1971/72 1972/73 1973/74 1974/75 1975/76 1977 1975 1979 Cotton (ginned and unginned) 31.1 26.5 15.1 30.8 84.8 74.5 346.7 265.0 1447.3 2252.5 3381.4 Producers and Cooperatives 0.9 0.8 0.7 1.4 4.0 7.7 23.2 21.3 444.1 676.9 951.8 Processors 30.2 25.7 14.4 29.4 80.9 66.9 323.5 243.7 1003.2 1575.6 2429.6 Rice 9.6 11.4 8.5 10.7 12.0 26.2 18.4 164.9 242.2 2.5 4.5 Producers and Cooperatives 1.4 2.7 1.6 1.4 2.0 5.4 3.7 60.4 119.7 2.0 2.6 Processors 8.2 8.8 6.9 9.4 10.0 20.8 14.7 104.5 122.5 0.8 1.9 Manioc Flour 0.0 0.0 - - 0.1 0.2 0.0 - 9.4 38;4 4.7 Producers and Cooperatives 0.0 0.0 - - 0.1 0.2 0.0 - 9.0 37.2 3.8 Processors - - - - 0.0 - - - o.4 1.2 0.9 Black Beans 0.1 0.1 0.7 0.6 0.5 0.2 2.1 0.6 2.5 6.o 1.5 Producers and Cooperatives 0.1 0.1 0.7 0.6 0.5 0.2 2.1 0.6 2.5 5.6 1.5 Processors - - - - - - - - - 0.4 - Corn 0.5 0.4 0.7 7.8 5.6 1.7 24.3 34.1 58.0 25.1 46.7 Producers and Cooperatives 0.4 0.3 0.6 5.6 3.7 1.6 14.4 24.2 46.9 20.7 36.1 Processors 0.1 0.0 0.2 2.1 1.9 0.1 9.9 9.9 11.1 4.4 10.6 Sisal 3.6 8.4 5.1 - - - 607.3 551.0 13+.4 96.4 197.3 Producers and Cooperatives 1.8 6.7 5.0 - - - 313,6 290.4 108.0 78.2 61.5 Processors 1.8 1.7 0.1 - - - 293.7 260.6 26.4 18.2 135.8 Jute and Malva 7.3 10.5 9.0 7.3 15.6 8.0 21.8 103.9 169.3 148.5 202.4 Producers and Cooperatives - - - - 0.3 - - 1.2 18.7 32.5 20.6 Processors 7.3 10.5 9.0 7.3 15.3 8.0 21.8 102.7 150.6 116.3 181.8 Other 1.1 4.6 1.6 3.5 2.8 23.2 114.8 142.6 190.8 224.8 716.2 Producers and Cooperatives 0.0 0.1 0.1 0.4 0.7 1.7 33.0 59.8 82.7 95.6 162.3 Processors 1.1 4.5 1.5 3.1 2.0 21.5 81.8 82.8 108.1 129.2 553.9 TOTAL 53.3 61.9 40.7 60.7 121.4 134.0 1135.5 1262.2 2253.9 2794.8 4554.7 Producers and Cooperatives 4.6 10.7 8.7 9.4 11.3 16.8 390.0 457.9 831.6 948.7 1240.2 Processors 48.7 51.2 32.0 51.3 110.1 117.3 745.4 804.2 1422.3 1846.1 3314.5 a - Castor Beans. b - Peanuts, Carnauba wax, and Castor Beans. c -.Carnauba wax. d - Castor Beans and Carnauba wax. e - Peanuts, Castor Beans, Brazil nuts, Cashews and Carnauba wax. f - Castor beans, Cashews, Carnauba wax, Sorghum, and Guarana. g - Brazil nut, cashews, Carnauba wax, Guarana, and Castor Beans. Source: CFP - 2.5 - Table 4.9b: Distribution of Credits Under Minimum Price Program, North-Northeast, 1968/69 - 1979 (Percent) Crop and Type of Beneficiaries C R 0 P Y E A R S 1968/69 1969/70 1970/71 1971/72 1972/73 197/714 .1974/75 '1975/76 1977 1978 1979 Cotton 58.3 42.8 37.1 50.7 69.9 55.6 30.5 21.0 64.7 80.6 74.2 Producers and , Cooperatives (2.9) (3.2) (4.4) (4.5) (4.7) (10.3) (6.7) (8.0) (30-7) (30-1) (28.1) Processors (97.1) (96.8) (95.6) (95.5) (95.3) (89.7) (93.3) (92.0) (69.3) (69-9) (7J..9) Rice 18.0 18.4 20.9 17.6 9.9 19.6 1.6 13.1 10.7 0.1 0.1 Producers and I Cooperatives (14.9) (23.3) I (18.7) (12.8) (16.8) (20.6) (20.0) (36.6) (49.4) (71.4) (57.8) Processors (85.1) (76.7) (81.3) (87.2) (83.2) (79.4) (80.0) (63.4) (50.6) (28.6). 42.2 Manioc 0.0 0.0 0.1 0.1 0.0 - 0.4 1.4 0.1 Producers and Cooperatives (100.0) (100.0) - - (92.7) (100.0) (100.0) - (95.7) (96.9). (80.9) Processors (-) (-) - - ( (-)3 - (4-3) (3.1) (19.1) Black Beans 0.2 0.2 1.7 1.0 0.4 0.1 0.2 0.0 0.1 0.2 0.0 Producers and Cooperatives (100.0) (100.0) (10O.0) (100.0) (100.0) (100.0) (100.0) (100.0) (100.0) (93,3) (100.0) Processors ( -) (-) ( -) (-) (-).(-) (-)(-) (-) (6.7)(-) Corn 0,9 0.6 1.7 12.9 4.6 1.3 2.1 2.7 2.6 o.g 1.0 Producers and Cooperatives ( 76.3) (93.4) (78.5) (72.5) (66.9) (94.1) (59.3) (71.0) (80.9) (82.5) (77-3) Processors ( 23,7) ( 6.6) (21.5) (27.5) (33.1) ( 5.9) (40.7) (29.0) (19-1) (17-5) (22-7) Sisal 6.8 13.6 12.5 - - 53.5 43.7 6.o 5.4 4.3 Producers and Cooperatives (49.8) (79.5) (98.2) - - - (51.6) (52.7) (8o,4) (81-1) (31.2) Processors (50.2) (20.5) ( 1.8) - - - (48.4) (47.3) (19.6) (18.9) (68.8) Jute and Malva 13.7 17.0 22.1 12.0 12.9 6.0 1.9 8.2 7.5 5.3 4.4 Producers and Cooperatives (- ) (-) (- ) (- ) (0.2) (- ) (- ) (1.2) (11.0) (21.8) (10.2) Processors (100.0) (100.0) (100.0) (100.0)!; (99.8) (100.0) (100.0) (98.8) (89-0) (78.2) (89.8) Other 2.1 7.4 3.9 5.8 2.3 19.3 10.1 11.3 8.5 8.0 15.7 Producers and Cooperatives (0.2) (1.9) (6.0) (12.4) (27.0) (7.4) (28.7) (41.9) (43-3) (42.5) (22.7) Processors (99.8) (98.1) (94.0) (87.6) (73.0) (92.6) (71.3) (58.1) (56.7) (57.5) (77.3) TOTAL 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Producers and 3 j3! Cooperatives ( 8.6) (17.3) (21.4) (15-5) ( 9.3) (12.5) (34.3) (36.3) (36.9) (33.9) (27.2) Processors (91.4) (82.7) (78.6) (84.5)1 (90.7)j (87.5); (65.7) (63.7) (63.1) (66.1) (72.8) Source: Table 4.2a. a! TABLE 4.10: REAL FINANCING UNDER MINIMUM PRICE PROGRAM, BY REGION AND MAJOR CROP, 1967/68 - 1978/79 (Millions of 1965-67 cruzeiros) C R 0 P Y E A R S Crop and Region 1967/68 1968/69 1969/70 1970/71 1971/72 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 Cotton 38.6 33.5 41.4 75.4 61.3 121.4 230.1 128.5 338.2 341.3 383.9 Center-South 24.2 22.4 22.0 36.0 65.9 38.6 105.9 173.5 97.9 221.1 209.9 255.8 North-Northeast 16.2 11.5 5.4 9.5 22.7 15.5 56.6 30.6 1l7J1 131.4 128.1 Rice 59.7 79.5 60.7 91.7 119.5 106.7 191.7 365.8 245.1 149.4 140.0 Center-South 42.2 54.7 74.5 57.6 88.4 116.3 101.3 188.7 346.8 225.5 139.2 159.8 North-Northeast 5.0 5.0 3.1 3.3 3.2 5.4 3.0 19.0 19.6 0.2 0.2 Manioc 0.3 0.3 0.2 0.7 12.6 4.0 2.3 0.8 5.2 8.3 2.9 Center-South 0.4 0.3 0.3 0.2 0.7 12.6 4.0 2.3 0.8 4.4 6.1 2.7 North-Northeast 0.0 0.0 - - 0.0 0.0 0.0 - o.8 2.2 0.2- Black Beans 0.6 1.1 3.7 7.0 0.9 7.9 20.7 2.4 16.0 45.4 34.0 o Center-South 1.4 0.5 1.1 3.5 6.8 0.8 7.9 20.4 2.3 15.8 h5.0 34.o North-Northeast 0.1 . 0.0 0.2 0.2 0.1 0.0 0.3 0.1 0.2 o.4 0.1 Corn 7.3 20.4 10.4 19.0 32.0 81.5 96.3 156.9 147.5 49.8 84.2 Center-South 13.7 7.0 20.2 10.1 16.6 30.5 81.1 92.3 153.0 142.8 48.3 82.4 North-Northeast 0.3 0.2 0.3 2.4 1.5 0.4 4.0 3.9 4.7 1.5 1.8 Soybeans 7.7 11.6 20.4 48.8 82.0 0.7 185.8 549.6 534.3 596.3 407.0 373.9 Center-South 7.7 11.6 20.4 48.8 82.0 0.7 185.8 549.6 534.3 596.3 407.0 373.9 Other 16.2 17.9 21.3 13.2 10.7 26.2 148.3 126.7 71.0 69.4 106.7 Center-South 7.1 10.0 10.6 14.0 10.0 5.7 19.6 27.0 34.5 31.0 42.0 64.4 North-Northeast 6.2 7.3 7.3 3.2 5.0 6.6 121.3 92.2 40.0 27.4 42.3 Total 134.3 173.1 186.5 289.0 237.7 533.5 1239.0 1315.4 1419.3 1070.6 1125.7 Center-South 96.7 106.5 149.1 170.2 270.4 205.2 505.6 1053.8 1169.6 1236.9 1 7.5 953.1 North-Northeast 27.8 24.0 16.3 18.6 32.5 27.9 185.2 145.8 182.4 163.1 172.6 a/ - Deflated by FGV index number 2 for year of harvest. SOURCE: Tables 4.8a and 4.9a. Table 4.11: Volumes of Major Crops Financed Under Minimum Price Credit Program, 1968/69 - 1978/79 (Thousand metric tons) Crop C R 0 P Y E A R S 1968/69 1969/70 1970/71 1971/72 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 Rice 481.2 591.6 444.4 648.5 709.1 625.7 842e2 2000.4 1398.4 884.8 961.7 Corn 134.6 352.6 178.5 291.0 415.4 763.2 884.8 1650.2 1599.6 575.8 1167.9 Manioc (cake and flour)6.1 4.8 2.5 7.7 89.3 25.0 17.6 7.5 34.9 66.6 23.8 Peanuts 67.0 60.9 85.0 59.2 21.3 39.5 28.4 45.7 42.4 39.5 85.8 Black beans 3.8 6.4 27.3 32.1 4.8 28.8 77.2 9.5 48,9 163.2 143.1 Soybeans 120.6 203.9 416.4 636.0 4.9 1495.2 3294.5 3602.6 4154.6 3222.0 3404.5 Sisal 12.5 27.0 16.1 - - - 187.4 167.7 35.6 19.9 20.5 Cotton (ginned and 61.4 58.0 60.4 96.4 76.7 130.6 367.0 190.0 411.1 416.7 562.01 Castor beans 16.8 27.3 16.3 6.7 6.4 95.5 113.4 58.5 37.4 79.9 159.8uW Jute and Malva 10.6 15.9 11.8 6.8 10.3 4.3 7.6 24.7 28.0 20.7 24.9 Carnauba wax and wax dust - 1.8 0.2 1.2 0.8 0.0 5.5 7.0 o.5 6.0 5.8 Source: CFP - 238 - TABLE 4.12: CROP ACQUISITIONS UNDER MINIMUM PRICE.PROGRAM, BY REGION, 1973 /74 - 1978/79 (Millions of cruzeiros) Crop/Region C R O P Y E A R S 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 Cotton 269.8 23.5 - 18.1 168.7 92.2 Center-South 262.1 8.3 - 15.5 9.8 - North-Northeast 7.7 15.2 - .2.6 158.9 92.2 Rice 3.2 4.2 1389.2 1299.3 391-3 4465.6 Center-South 3.1 1.1 1343.3 1095.1 324.0 3923.9 North-Northeast 0.1 3.1 45.8 204.1 67.3 541.7 Manioc Flour 0.3 - - 14.4 71.1 19.5 Center-South - - - 14.4 21.8 o.6 North-Northeast 0.3 - - - 49.3 18.9 Black Beans 2.4 63.7 - 2.2 322.2 80.3 Center-South 2.4 63.7 - 2.2 318.4 80.2 North-Northeast - - - - 3.8 0.1 Corn 96.4 79.2 350.3 1564.4 3457.8 a/ 6808.0a/ Center-South 96.4 79.1 349.9 1564.1 3337.1 5602.6 North-Northeast - 0.1 0.3 0.3 120.7 1205.4 Sisal - 665.3 574,,3 54.4 91.5 51.9 Center-South - - North-Northeast - 665.3 574.3 54.4 91.5 51.9 Jute and Malva - - 27.0 53.4 25.9 1.2 Center-South - - - North-Northeast - - 27.0 53.4 25.9 1.2 Carnauba Wax and Wax Dust - 56.8 102.5 102.5 145.0 132.5 Center-South - - - - - - North-Northeast - 56.8 102.5 102.5 1455.0 132.5 Other 2,3 b/ 8.7 c/ 56.3 d/ 92.8 e/ 33.-9j 1495.4g/ Center-South 0.9 8.6 24.9 92.8 29.7 1495.4 North-Northeast 1.4 0.1 31.4 - 3.3 - TOTAL 374.4 901.5 2499.4 3201.4 4706.5-/ 13146.6aJ Center-South 364.8 160.9 1718.1 2784.1 4040.8 11102.7 North-- Northeast 9.6 740.6 781.3 417.3 665.7 2043.9 a - Includes imported corn purchased by CFP. b - Includes sorghum and castor beans. c - Sorghum, castor beans, peanuts, soybeans and silk. d - Sorghum, peanuts, mint oil, soybeans and Brazil nuts. e - Oats, sorghum and silk fiber. f - Sorghum, Guarana, manioc cake, and silk fiber. g - Manioc cake, soybeans, and sorghum. SOURCE: EGF - 239 - Table 4.13: Real Value of Crop Acquisitions Under Minimum Price Program by Region, 1973/74 -1979a/ (Millions of 1965-67 Cruzeiros) Crop/Region 1973/74 1974/75 1975/76 1976/77 1978 1979 Cotton 56.2 3.8 - 1.5 9.8 3.5 Center-South 54.6 1.4 - 1.3 o.6 - North-Northeast 1.6 2.5 - 0.2 9-3 3.5 Rice 0.7 0.7 160.4 105.1 22.8 169.2 Center-South 0.6 0.2 155.1 88.6 18.9 148.7 North-Northeast 0.0 0.5 5.3 16.5 3.9 20.5 Manioc Flour 0.1 - - 1.2 4.1 0.7 Center-South - - 1.2 .3 0.0 North-Northeast 0.1 - - - 2.9 0.7 Black Beans 0.5 10.4 - 0.2 18.8 3.0 Center-South 0.5 10.4 - 0.2 18.6 3.0 North-Northeast - - - - 0.2 0.0 Corn 20.1 12.9 40.5 126.6 201.74 258.0k- Center-South 20.1 12.9 40.4 126.5 194.7 212.3 North-Northeast - 0.0 0.0 0.0 7.0 45.7 Sisal 108.5 66.3 4.4 5.3 2.0 Center-South - - - North-Northeast - 108.5 66.3 4.4 5.3 2.0 Jute and Malva - - 3.1 4-3 1.5 0.0 Center-South - - - - North-Northeast - - 3.1 4.3 1.5 0.0 Carnauba Wax - 9.3 11.8 8.3 8.5 5.0 Center-South - - - - - North-Northeast - 9.3 11.8 8.3 8.5 5.0 Other 0.5 1.4 6.5 7.5 1.9 56.7 Center-South 0.2 1.4 2.9 7.5 1.7 56.7 North-Northeast 0.3 0.0 3.6 - 0.2 - Total 78.0 147.1 288.6 259.0 274.6J? 498.2ˇ! Center-South 76.0 26.2 198.4 225.3 235.8 420.7 North-Northeast 2.0 120.8 90.2 33.8 38.8 77.4 a/ Deflation by FGV index No. 2 for year of harvest. b/ Includes imported corn puˇrchased by EGF. Source: Table 4.5. Table 4.14: Volume of Crops Acquired Under Minimum Price Program, 1973/74 - 1979 (Thousands of metric tons) Crop 1973/74 1974/75 1975/76 1976/77 1978 1979 Rice 3.1 2.3 978.3 860.5 156.1 447.9 Black Beans 1.8 38.5 - 0.6 69.0 11.3 ,lanioc flour and paste 0.8 8.4 33;5 7.0 Cats - - - 0.6 - - Corn 174.0 102.1 432.6 1476.2 1586a!/ 1676.2-/ Sorghum .9 0.4 28.6 77.7 7.3 0.4 Peanuts - 0.0 0.2 - - Castor Beans 1.7 O.i - - Mint Oil 0.0 - Soybeans 2.6 0,2 199.3 Cotton 53.2 3.6 1.6 7.2 2.6 TUe and Malva - - 6.3 10.1 2.1 0.1 Silk - 0.0 - 0.1 0.1 - Sisal - 189.3 170.9 16.2 19.7 8.6 Brazil nuts - - 3.9 - -- - Carnauba wax and wax dust - 4.9 8.3 6.7 7.2 5.7 Guarana - - - - 0.0 - Totals 236.5 344.0 1629.3 2456.5 1888.2 2359.1 a/ Includes imported corn. So-urce: EGF - 241 - Table 4.15: Crops Acquired Under Special Purchase Programs by State or Territory, 1980 State or Rice Corn Soybeans Territory Volume Value Volume Value Volume Value ('000 kg) (Cr$'000) ('000 kg) (Cr$'000) ('000 kg) (Cr$'000) Rondonia 6,603 55,040 59 226 - - Mato Grosso 99,931 752,291 222 739 8,281 64,523 Goias 9,967 77,585 - - - - Para 7,533 64,637 - - - - Acre 232 1,838 35 125 - - Roraima 559 5,890 - - - - Totals 124,826 957,281 316 1,089 8,281 64,523 a/ Includes freight. Source: CFP - 242 - Table 5.0: Production of Improved Seeds, Selected Crops, 1974/75-1979/80 (Thousands of metric tons) Crop Year Rice Corn Soybeans Wheat 1974/75 108.5 105.0 474.0 255.0 1975/76 119.2 112.6 452.2 354.0 1976/77 85.9 127,5 548.6 340.0 1977/78 126.2 108.7 700.8 500.7 1978/79 148.6 112.0 647.0 500.7 1979/80 166.5 114.8 808.9 480.8 Trend rate of growth - % a/ 9.5(.73) 0.8(.22) 12.1(.93) 14.0(.90) a/ Correlation coefficients given in parentheses. Source: FGV. Table 5.1: Apparent Consumption of Fertilizers, 1960-1980 (Thousand metric tons of nutrients) ------------ Nitrogen-------------- ----------Phosphorous------------- ---------Potassium----------- Domestic Apparent Domestic Apparent Domestic Apparent Year Production Im2prts Assumption Production Imports Assumption Production Imports Assumption 196n-64 (ave.) 12.6 45.1 57.7 91.6 42.7 134.3 - 81.8 81.8 1965 14.4 52.1 66.5 82.9 37.2 120.1 - 99.7 99.7 1966 6.5 64.7 71.2 84.1 32.6 116.7 - 93.2 93.2 1967 7.9 95.5 103.4 109.0 95.6 204.6 - 136.9 136.9 1968 9.3 135.0 144.3 122.5 150.6 273.1 - 184.3 184.3 1969 6.5 158.0 164.5 127.8 137.9 265.7 - 200.3 200.3 1970 20.4 255.6 275.9 169.4 246.5 415.9 - 306.7 306.7 1971 69.2 209.2 278.4 242.7 292.2 534.9 - 350.8 350.8 1972 88.5 323.1 411.6 289.9 585.7 875.6 - 460.0 460.0 1973 114.3 231.8 346.1 332.8 471.8 804.6 - 528.5 528.5 1974 157.4 239.0 396.4 371.0 526.8 914.2 - 521.3 521.3 1975 160.8 245.4 406.2 513.8 500.0 1013.8 - 557.6 557.6 1976 200.3 298.0 498.3 875.4 432.9 1308.3 - 721.5 721.5 1977 231.4 469.1 700.5 1055.5 490.0 1545.5 - 962.9 962.9 1978 273.1 434.6 707.7 1132.6 390.5 1523.1 - 990.9 990.9 1979n1 283 497 735 1190 377 1567 - 1085 1085 198OR/ 385 503 888 1507 342 1849 2 1267 1269 Source: Jose Roberto Mendonga de Barros, et. al., General Technical-Economic Survev of the Brazilian Fertilizer Sector, Instituto de Pesquisas Tecnologicas do Estado de Sao Paulo, Sao Paulo, 1980. FAO, Fertilizer Programme in Brazil, 1969-1979, Rome, 1980. FGV, Retrospectiva da Agricultura, Ano de 1980. p/ Preliminary. Tabla 5.4: Indexes of International and Domestic Fertilizer Prices, 1966-1976 (1966=100) International Price Year in Cruzeiros Price to Farmers General Price Index (2) - (1) (2) i (3) (1) (2) (3) 1966 100 100 100 100 100 1967 112 104 128 93 81 1968 114 137 159 120 86 1969 126 157 192 125 82 1970 140 169 230 121 73 1971 160 210 277 131 76 1972 240 259 324 108 80 1973 373 342 373 92 92 1974 1,254 850 480 68 177 s 1975 981 829a/ 613 84 135 ' 1976 721 827.a/ 866 115 95 a/ Adjusted for subsidy of 40 percent of selling price. Source: Jose R. Mendonga de Burros, op. cit. Table 5.5: Apparent Consumption of Insecticides, Fungicides and Herbicides, 1970-79 (Thousands of metric tons) 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 Insecticides 28.3 27.2 33.9 37.9 45.2 41.8 28.5 33.8 42.8 43.6 Domestic 13.2 11.0 14.0 16.3 14.5 15.6 7.7 10.1 19.9 19.4 Imported 15.1 16.3 19.9 21.6 30.8 26.2 20.8 23.8 22.8 24.2 Fungicides 7.7 11.5 24.7 37.1 40.5 14.2 16.6 24.6 22.9 23.2 Domestic 1.6 2.9 4.3 6.2 7.6 9.2 9.3 11.9 15.2 15.7 Imported 6.1 8.6 20.4 30.9 32.9 5.0 7.3 12.7 7.8 7.5 Herbicides 3.4 5.0 4.9 9.5 14.9 22.4 24.3 19.9 22.9 19.5 Domestic - - - 0.5 0.8 1.7 1.5 4.3 5.5 9.0 Imported 3.4 5.0 4.9 9.0 14.1 20.7 22.8 15.6 17.3 10.5 4: Source: FGV. - 247 - Table 5.6: National Static Storage Capacity, by Type of Unit, 1975-1979 (Thousands of metric tons) Type 1975 1976 1977 1978 1979 Silos 2,933.3 3,140.0 3,558.1 3,180.2 3,223.4 Baterias 271.9 273.8 315.1 740.1 874.4 Granary 7,554.7 9,249.4 10,438.4 13,655.0 14,462.3 Sack Storage 21,568.7 22,758.2 24,418.5 24,357.8 25,872.0 Deposits 2,846.9 3,086.7 3,242.2 4,978.9 5,849.9 Total 35,175.4 38,508.1 41,972.4 46,912.0 50,282.0 Source: CIBRAZEM. Table 5.7: Regional Distribution of Storage Capacity 1975-May 1979 (Thousands of metric tons) Region 1975 1976 1977 1978 1979 North 209.2 230.5 228.6 273.4 347.6 Northeast 2,942.9 2,025.5 2,258.5 2,581.6 2,977.5 Southeast 11,031.0 11,778.7 12,719.2 13,503.7 14,503.4 South 19,435.7 22,827.2 24,298.7 27,516.9 28,906.8 Center-West 1,556.6 1,646.2 2,466.3 3,036.4 3,546.7 Total 35,175.4 38,508.1 41,972.4 46,912.0 50,282.0 Source: CIBRAZEM. a! Table 5.8: Indexes of Real Farm Land and Labor Prices, 1966-1979- (1966=100) Cash Wages Cash Rental Values Sales Values Tractor Monthly Day Year- Crop Land Livestock Land Crop Land Pasture Administrator Foreman Operator Labor Labor 1966 100 100 100 100 100 100 100 100 100 1967 98 97 96 92 10i 101 92 104 103 1968 96 96 83 85 96 97 94 101 103 1969 102 93 83 78 94 98 94 108 101 1970 112 104 89 79 100 102 95 109 102 1971 126 119 93 84 100 105 99 114 108 1972 143 142 116 100 104 106 103 115 112 1973 180 182 200 159 122 124 117 131 135 1974 196 207 260 231 140 137 125 142 172 1975 198 216 311 271 164 153 136 150 186 1976 189 199 314 265 158 152 131 150 180 1977 176 185 322 247 164 159 139 154 183 1978 174 190 324 245 180 171 139 165 186 1979 174 193 339 248 187 181 139 172 196 Growth rate, c/ 6.3(.89) 7.5(.90) 14.3(.92) 11.7(.88) 6.0(.93) 5.4(.95) 3.9(.93) 4.6(.98) 6.6(.93) 1966-79 (%) a/ Deflated by GPI. b/ Averages of survey data for June and December of each year. c/ Calculated by method of least squares. Correlation coefficients are shown in parentheses. Source: FGV. Tab].e 5.9: Indexes of Real Cropland Rents by States and Territories, 1967-1979 (1966=100) States and Territories 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 Rondonia Acre Amazonas Para Maranhao 105 90 79 116 150 126 102 158 185 160 159 193 230 Piaui Ceara 106 103 131 129 135 157 164 198 200 190 228 217 178 Rio Grande do Norte 127 133 169 182 160 227 271 280 301 278 267 285 269 Paraiba 111 93 90 97 110 96 134 206 183 182 181 208 247 Pernambuco 94 85 92 93 96 172 192 208 232 199 200 210 231 Alagoas 115 129 177 167 181 211 315 294 262 310 418 430 516 Sergipe 84 75 72 80 105 117 127 162 175 179 170 154 162 Bahia 90 98 100 132 171 308 419 630 486 484 435 340 234- ID Minas Gerais 86 78 81 80 98 104 146 156 154 133 129 140 1431 Espirito Santo 131 158 187 184 190 240 283 286 431 431 360 356 410 Rio de Janeiro 97 127 129 150 160 219 341 373 358 343 364 408 344 Sao Paulo 96 90 96 110 161 162 167 173 162 167 161 Parana 132 161 174 198 199 223 320 397 403 329 340 390 439 Sta. Catarina 121 113 107 128 140 135 191 226 293 252 228 215 213 Rio Grande do Sul 125 120 137 183 202 231 266 265 279 295 286 263 268 Mato Grosso 87 90 94 103 118 138 152 164 158 151 122 146 177 Goias - 114 106 100 87 86 96 109 123 128 107 99 99 108 Brazil 98 96 102 112 126 143 180 196 198 189 176 174 174 Source: FGV Table 5.10: Indexes of Real Rents on Livestock Land, by States and Territories, 1967-1979 (1966=100) States and Territories 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 Rondonia Acre Amazonas Para Maranhao Piaui Ceara 111 121 152 129 155 113 125 162 153 150 181 194 230 Rio Grande do Norte 139 -*7 136 145 154 128 141 179 193 188 178 142 139 Paraiba 104 79 74 81 91 104 108 138 141 161 155 162 169 Pernambuco 134 115 156 149 146 229 209 181 162 192 215 259 313 Alagoas 105 115 154 139 141 210 216 244 342 308 239 307 305 Sergipe 87 71 68 73 74 141 168 174 204 165 142 143 154 Bahia 122 131 105 80 100 87 116 116 137 170 205 204 212 Minas Gerais 82 94 91 81 91 119 185 232 245 221 211 198 192 Espirito Santo 96 113 106 100 14 161 247 245 286 270 277 238 236 Rio de Janeiro 114 113 98 114 129 145 172 176 206 186 196 187 163 Sao Paulo 186 186 182 198 202 Parana 99 129 99 126 146 124 178 161 196 161 149 137 140 Sta. Catarina 153 131 146 134 142 184 236 291 290 239 201 225 213 Rio Grande do Sul 95 88 70 79 82 104 143 153 163 143 134 116 120 Mato Grosso 93 85 101 146 168 218 272 362 367 313 249 262 306 Goias 99 ,35 73 80 108 171 190 206 212 220 195 180 185 Brazil 97 96 93 104 119 142 182 207 216 199 185 190 193 Source: FGV Table 5.11: Indexes of Real Sales Prices for Cropland, by States and Territories, 1967-1979 (1966=100) States and Territories 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 Rondonia Acre Ama z on as Roraima Para Maranhao 80 97 85 140 161 273 252 227 262 291 368 435 493 Piaui Ceara 106 84 83 75 69 68 72 88 99 121 151 158 165 Rio Grande do Norte 118 130 101 89 84 85 96 111 134 142 177 186 179 Paraiba 111 106 102 103 92 94 117 160 217 208 260 265 256 Pernambuco 85 91 83 69 65 51 63 89 118 106 127 178 229 Alagoas 90 80 70 72 73 89 112 191 303 289 348 443 390 Sergipe 109 132 116 100 105 126 158 226 402 483 543 470 525 L Bahia 86 104 94 82 71 74 106 160 184 218 226 196 216 Minas Gerais, 83 69 54 53 56 58 108 151 181 185 179 194 232 Espirito Santo 98 96 103 112 109 106 159 332 453 499 524 476 458 Rio de Janeiro 92 77 77 78 79 63 104 195 238 292 339 328 315 Sao Paulo 90 110 132 149 216 394 436 429 429 429 433 Parani. 95 88 97 99 98 135 223 335 410 383 386 478 595 Sta. Catarina 100 87 89 87 91 97 116 183 242 269 279 250 261 Rio Grande do Sul 93 80 80 93 97 124 187 271 331 357 381 373 377 Mato Grosso 94 86 120 121 131 177 279 453 486 405 379 468 635 Goias 85 76 64 55 54 71 109 155 164 151 126 141 196 Brazil 96 83 83 89 93 116 200 260 311 314 322 324 339 Source: FGV Table 5.12: Indexes of Real Sales Prices for Pasture Land, by States and Territories, 1967-1979 (1966=100) States and Territories 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 Rondonia Acre Amazonas Roraima Para Maranhao 156 158 160 175 159 212 280 283 292 274 330 401 425 Piaul Ceara 138 118 122 103 94 83 96 127 126 173 197 198 205 Rio Grande do Norte 82 76 88 90 84 85 98 122 138 158 207 217 210 Parafba 102 82 89 95 93 94 116 145 198 186 256 258 238 Pernambuco 88 85 84 77 71 58 65 88 123 98 87 135 151 Alagoas 123 117 117 154 165 197 249 414 585 596 675 963 892 1 Sergipe 103 107 100 145 140 170 199 235 339 436 573 525 504 . s Bahia 94 101 97 89 81 69 97 144 156 170 181 159 149 Minas Gerais 82 69 52 46 46 52 90 140 167 164 149 155 158 Espirito 8anto 104 98 104 110 115 141 191 400 569 614 557 521 490 Rio de Janeiro 96 86 78 82 75 71 111 196 258 292 327 339 284 Sao Paulo 396 382 379 411 4-23 Parana 107 99 101 102 100 141 242 416 400 412 388 440 536 Sta. Catarina 94 86 97 105 104 123 147 229 285 276 256 238 234 Rio Grande do Sul 105 95 100 98 113 139 193 308 344 379 351 319 302 Mato Grosso 105 150 133 152 169 194 293 428 545 484 408 430 510 Goias 82 68 66 62 64 83 141 193 216 189 162 160 167 Brazil 92 85 78 79 84 100 159 231. 271 265 247 245 248 Source: FGV Table 5.13: Ratios of Cash Sales Price to Cash Rents, Cropland by States and Territories, 1966-1979 (Percent) States and Territories 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 Rondonia 172-/ 146 Acre 77 278-/ 13 3/ 13 3/ Amazonas 139 191 245 204 251 311 278 Poraima Para 112 105 1204i1 254b/ 616 469 Maranhao 92 70 100 100 111 99 201 228 132 131 168 214 208 199 Piaui 189 178 156 Ceara 422 420 346 269 244 214 184 186 186 208 269 278 307 380 Rio Grande do Norte 661 614 645 395 322 347 248 235 261 293 337 438 433 438 Paraiba 689 685 782 779 737 581 675 602 536 816 788 991 879 714 Pernambuco 996 903 1059 902 743 677 296 329 424 505 532 635 846 988 i-n Alagoas 1225 964 758 484 529 497 515 438 794 1419 1143 1018 1262 937 Sergipe 388 504 680 625 488 389 419 483 540 890 1049 1241 1181 1254 Bahia 548 519 583 515 339 227 132 139 139 208 247 285 316 506 Minas Gerais 684 659 574 459 456 388 383 507 663 804 952 948 951 1107 Espirito Santo 649 486 392 360 394 370 286 364 754 682 749 944 868 726 Rio de Janeiro .1243 1174 758 746 641 613 359 380 649 824 1059 1156 998 1138 Sao Paulo 964 904 1178 1326 1306 1293 2344 2517 2400 2570 2484 2597 Parana 1084 782 595 608 542 535 656 756 915 1103 1263 1234 1332 1471 Santa Catarina 691 575 532 576 473 448 497 420 561 571 737 846 804 847 Rio Grande do Sul 1466 1092 977 851 748 706 789 1032 1501 1741 1776 1950 2078 2063 Mato Grosso 248 268 235 318 292 276 318 455 685 763 662 769 796 891 Goias 450 337 323 285 284 280 332 449 569 569 623 562 626 797 Brazil 812 789 704 658 645 601 654 902 1079 1277 1350 1489 1512 1584 a/ Data from second semester only. b/ Data from first semester only. Source: FGV. Table 5.14: Growth Rates of Farm Cash Sales Prices and Rents, by States, 1970-79 Sales Prices Cash Rents States and Territories Cropland Pasture Cropland Pasture 1 + 4 2 - 5 Rc'ndonia Acre Amazonas Roraima Para Maranhao 13.1 (.94) 10.6 (.95) 6.6 (.79) 1.98 Piaui Ceara 11.9 (.95) 11.2 (.92) 5.3 (.82) 6.0 (.82) 2.25 1.87 Rio Grande do Norte 10.8 (.96) 13.1 (.96) 5.3 (.74) 1.0 (.21) 2.04 13.10 Paraiba 14.8 (.95) 14.4 (.96) 10.7 (.91) 8.8 (.96) 1.38 1.64 Pernambuco 15.8 (.92) 9.0 (.81) 9.3 (.80) 6.3 (.75) 1.70 1.43 Alagoas 25.9 (.96) 25.3 (.98) 12.5 (.95) 9.2 (.84) 2.07 2.75 Sergipe 24.9 (.95) 19.4 (.96) 7.5 (.83) 7.2 (.61) 3.32 2.69 Bahia 15.5 (.91) 10.1 (.83) 7.5 (.44) 12.4 (.97) 2.07 0.81 Minas Gerais 19.5 (.93) 17.7 (.88) 5.3 (.70) 10.6 (.76) 3.68 1.67 Espirito Santo 23.4 (.90) 23.4 (.89) 9.7 (.88) 10.2 (.77) 2.41 2.29 Rio de Janeiro 23.1 (.93) 21.8 (.92) 10.5 (.82) 4.8 (.74) 2.20 4.54 Sao Paulo 18.5 (.90) 7.1 (.81) 2.61 Parana 23.1 (.95) 21.3 (.91) 8.9 (.85) 0.8 (.17) 2.60 26.62 Santa Catarina 16.4 (.93) 12.1 (.85) 7.1 (.73) 4.9 (.55) 2.31 2.47 Rio Grande do Sul 19.8 (.94) 15.8 (.86) 4.2 (.79) 4.7 (.55) 4.71 3.36 Mato Grosso 19.1 (.90) 14.9 (.87) 3.5 (.63) 6.8 (.65) 5.46 2.19 Goias 14.3 (.87) 12.7 (.77) 1.9 (.43) 7.7 (.69) 7.53 1.65 Brazil 18.1 (.92) 15.7 (.87) 4.6 (.70) 6.6 (.77) 3.93 2.38 a/ Calculated by method of least squres (correlation coefficient given in parentheses). Source: Tables 5.8-5.12. - 255 - Table 5.15: Production of Improved Seed, 1974/75-1980/81 (Thousands of metric tons) Crop year Rice Corn Soybeans Wheat 1974/75 108.5 105.0 474.0 255.0 1975/76 119.2 .112.6 452.2 354.0 1976/77 85.9 127.5 548.6 340.0 1977/78 126.2 10.7 700.8 500.7 1978/79 148.6 112.0 647.0 500.7 1979/80 166.5 114.8 808.9 480.8 1980/81 203.0 140.0 837.0 385.0 ./ Projected. Source: FGV, Retrospectiva da Agricultura, Ano de 1980. - 256 - Table 6.1: Annual Per Capita Wheat Consumption, by State, for Selected Years, 1970-1978 (kilograms per person) Increase in Consumption State 1970 1975 1978 1970-78 (kg) (Percent) Amazonas 24.5 29.1 37.5 13.0 53 Maranhao 10.8 13.0 17.1 6.3 60 Para 15.9 33.0 41.9 26.0 163 Ceara 29.8 39.0 47.7 17.9 60 Paraiba 10.2 13.9 17.5 7.3 72 Pernambuco 33.3 45.7 56.7 23.4 70 Rio Grande do Norte 12.2 22.9 27.9 15.7 128 Alagoas 34.2 49.6 63.4 29.2 85 Bahia 16.1 20.4 26-1 10.0 62 Sergipe 19.1 36.8 47.6 28.5 149 Espirito Santo 18.3 37.1 47.6 29.3 160 Minas Gerais 19.4 25.6 33.2 13.8 76 Rio de Janeiro 53.4 62.6 75.1 21.7 40 Goias 10.1 15.0 19.6 9.5 94 Mato Grosso 7.6 9.0 9.5 1.9 25 Parana 21.0 19.4 31.8 11S8 56 Sao Paulo 59.8 71.1 75.4 15.6 26 Rio Grande do Sul 53.0 65.6 75.9 22.9 43 Santa Catarina 45.7 53.6 60.2 14.5 32 Brazil 32.5 41.4 50.3 17.8 55 Sources: , SUNAB Table 6.2: Relationship Between Mill Delivered Price and Costs of Imported and Domestically Produced Wheat, 1967-1979 (1977 cruzeiros/MT) Cost of Cost of Government Imported Domestic Wheat Price Wheat a/ Wheat b/ to Mill c/ Ratios Years (1) (2) (3) (1) , (2) (1) e (3) (2) j (3) 1967 - 2,690 2,150 - 1.25 1968 1,877 2,594 2,100 0.72 0.89 1.24 1969 1,789 2,595 1,918 0.69 0.93 1.35 1970 1,614 2,548 2,089 0.63 0.77 1.22 1971 1,438 2,316 2,045 0.62 0.70 1.13 1972 2,161 2,213 1,938 0.98 1.11 1.14 1973 2,646 2,118 1,880 1.25 1.41 1.13 1974 2,816 2,061 1,523 1.37 2.50 1.35 1975 2,791 2,952 1,180 0.94 2.37 2.50 1976 2,110 2,513 1,080 0.84 1.95 2.32 1977 1,476 2,260 1,202 0.65 1.23 1.88 1978 d/ 2,788 2,803 1,010 0.99 2.76 2.78 1979 d/ 2,676 3,162 766 0.85 3.49 4.13 (Nov.) 1979 d/ 2,700 2,330 625 1.16 4.32 3.73 Source: Zandonadi ( ) a/ Includes the average CIF import price plus $3.50 per ton for port and transport costs to mill. b/ Includes price paid to producer in year T-1, plus CR$170 (1977 base) for transport and storage charges. c/ Price set by the government. In addition, an ICM tax of 15 percent of this value was credited to the mill. Thus, true cost to mill was 15 percent less than listed values. d/ Estimated from information provided by Zandonadi. Table 7.1: Agricultural Land and Land Under Crops, By Region, 1950 - 1975 (Millions of Hectares) Total Agricultural Area Land Under Crops Crop Land as % of Total Region 1950 1960 1970 1975' 1950 1960 1970 1975?/ 1950 1960 1970 1975?/ North 23.1 93.5 23.2 29.8 0.6 1.0 2.7 3.4 Northeast 58.3 63.0 74.3 79.8 10.3 10.6 13.9 13.3 Southeast 61.7 64.4 69.5 72.9 9.6 10.2 13.8 14.0 South 35.4 39.0 45.5 46.5 11.0 12.9 24.3 27.6 1 Center-West 53.6 60.0 85.7 93.7 2.4 4.1 2.8 4.4 M Brazil 232.2 249.9 294.1 322.6 19.1 28.7 34.0 38.8 8.2 11.5 11.6 12.0 Average annual rates of growth 2 North 0.2 -0.1 5.1 10.5 Northeast 0.8 1.7 1.4 o.6 Southeast 0.4 0.8 1.0 1.1 South 1.0 1.6 0.5 3.1 Center-West 1.1 3.1 1.8 11.4 Brazil 0.7 1.6 1.9 4.2 1.7 2.7 p/ - Preliminary Source: FIBGE, Agricultural Censuses Table 7.2: Size Distribution-of Farms., 1960, 1970 and 1975 Number of Farms ('000) Total Area (10 ha) Size Class (ha)1 1960 197U 1975k' Z 1960 % 1970 % 1975 Z Less than 10 1495.0 44.8 2519.6 51.2 2616.6 52.3 6.0 2.4 9.1 3.1 9.0 2.8 10 - 100 1491.4 44.7 1934.4 39.3 1897.5 37.9 47.6 19.0 60.1 20.4 60.1 18.6 100 - 1,000 314.8 9.4 414.7 8.4 446.0 8.9 86.0 34.4 108.7 37.0 115.9 35.9 1.000 - 10,000 30.9 0.9 35.4 0.7 40.1 0.8 71.4 28.6 80.1 27.2 91.3 28.3 More than 10,000 1.6 0.0 1.4 0.0 1.8 0.0 38.9 15.6 36.2 12.3 -46,3 14.4 Undeclared 4.0 0.1 18.4 0.4 5.2 0.1 --- Total 3337.8 100.0 4924.0 100.0 5007.2 100.0 249.9 100.0 294.1 - 100.0 322.6 100.0 Pf/ - Preliminary Source: FIBGE Table 7.3 Distribution of Farms by Status of Producers, 1970 and 1975 Status of Number of Farms ('000) Total Area (10 ha) Producer 1970 % 1975 .PJ % 1970 % 1975 P1 % Owner 3094.9 62.9 3085.3 61.6 254.4 86.5 281.4 8'.2 Renter 637.6 12.9 601.5 12.0 13.7 4.7 11.0 3.4 Sharecropper 380.2 . 7.7 312.7 6.2 4.8 1.6 4.0 1.2 Squatter 811.4 16.5 987.9 19.7 21.2 7.2 25.9 8.0 Undeclared -- -- 19.8 0.4 -- -- 0.3 0.1 TOTAL 4924.0 100.0 5007.2 100.0 294.1 100.0 322.6 100.0 pj- Preliminary Source: FIBEE