why meat and dairy products are produced on a large scale in Brazil
Answers
1) huge consumer base
2) low labour cost
3) distance from the global market
Too often Brazil’s agricultural
sector is associated primarily
with farms operating thousands of
hectares in the vast savannah known
as the cerrado. Our purpose is to
demonstrate that this association is
inaccurate, that there exists enormous
heterogeneity within the sector across
farm sizes. To this end, we separately
examine how 1985–2006 total factor
productivity (TFP) growth and 2006
production scale vary over farm sizes.
We draw on microdata from Brazil’s
agricultural censuses, aggregated into
five farm size classes at the
municipality level. While TFP growth
has been high on the largest farms, it
has been slightly higher on the
smallest farms. And when attention is
restricted to the 9.5 per cent of farms
that accounted for 86 per cent of total
production value – those that we
designate as ‘large scale’ – it is clear
that most were small and mediumsized farms located in the South and
Southeast. Taken together, these
results indicate that Brazil’s
agricultural success has not been only
about the large farms. As scholars
and policymakers debate the costs
and benefits of replicating Brazil’s
‘Agricultural Miracle’ in other parts of
the world, it is critical not to overlook
the contributions of small and
medium-sized farms.
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