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Registro Completo |
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Biblioteca(s): |
Embrapa Cerrados. |
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Data corrente: |
15/08/2000 |
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Data da última atualização: |
15/08/2000 |
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Autoria: |
RIBEIRO. J. L. |
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Título: |
Rates of return to agricultural investiment in the cerrados area in Brazil. |
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Ano de publicação: |
1979 |
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Fonte/Imprenta: |
[S.l.]: University of Minnesota, 1979. |
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Páginas: |
124p. |
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Idioma: |
Inglês |
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Notas: |
PhD. Thesis. |
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Conteúdo: |
During the 1950's and 1960's the Brazilian policy to achieve increases in agricultural prodution was based mainly on the expansion of cultivated area. However in the early 1970's this policy of expansion was combined with a more agressive research program. This was due to the fact that soils of good quality were already in cultivation and policy makers faced one decision problem: should they try to increase productivity of land already in cultivation or should they attempt to increase the cultivated area using land of poorer quality? Both approaches have been taken by the Brazilian government. The research program was improved in the sense that with the creation of EMBRAPA (Brazilian Public Research Corporation) many Brazilians are now training in universities abroad, mainly in the U.S. This training is likely to improve the quality of research in the country. In addition new land has been brought into production. Among the regions that have a potential for agricultural utilization, the cerrados have fairly good potential even though the cultivation of these areas has some limitations. The cerrados area are plains and offer no problems with respect to mechanization; however soil quality is not good and lime and fertilizer must be used in order to assure some acceptable productivity level. Besides this, the cerrados area has irregular rain fall distribution which can be a major factor in limiting production. The POLOCENTRO ( Development Program of Cerrados ) is an institution created by the federal government which is responsible for the development of these regions. In 1974 the state of Minas Gerais started a development program in the Alto Paranaiba region. This program is part of the expansion of the cultivated area utilizing the cerrados. This program is associated to one of the strongest agricultural cooperatives in Brazil, namely the agricultural cooperative of Cotia. In the program's region there are two types of farmers: members and nonmebers of the cooperative. Farmers who are members of the cooperative are in the majority japanese people who came from the south of Brazil. They were selected to participate in the program according to their entrepreneurial ability and also according to their past experience in farming. They cultivate coffee, soybeans and wheat. Nonmembers of the cooperative are natives of the region. They produce mainly grains and dairy products. Little is known about the profitability of investment in the cerrados area. This study tries to determine what is the highest pay-off investment farmers have been making in that region. Separate estimates of investment returns are made for each group. Of primary interest is the difference in educational levels between the two groups of farmers and the contribution of education to agricultural production in the area. The production function technique is used to generate the necessary information to calculate rates of return. A Cobb-Douglas type function is used, allowing the estimation of marginal products and associated rates of return to investment in the corresponding inputs. The ordinary least squares method is used to estimate the production functions. The data used in this study are mainly cross-section collected through a survey with the agricultural producers in the Alto Paranaiba region. Some secondary data were collected from the institutions which work with the program. Farmers were divided into two groups: members and nonmembers of the cooperative of Cotia. The sample size for the first group of farmers was 74 and for the second group 119. The measurement of the output and input variables used in the estimation of the production function is detailed in chapter 3. The coefficients if the variables of the estimated production functions for both groups of farmers are presented in chapter 4. With respect to the results obtained for the members of the cooperative all the coefficients are of reasonable size and all are statistically significant at the usual confidence levels (95 and 99 percent), except the coefficient of the seeds variable. However this variable was not dropped from the equation because its coefficient had the expected sign and it was greater than the corresponding standard deviation. A statistical test was perfomed to test whether the coefficient of the education variable is different from the coefficient of the labor variable. The result showed that these two coefficients are not statistically different at 95 percent confidence level, implying that the labor variable could be adjusted for qualty differences. The sum of the partial elasticities of production is greater than unity implying that there are increasing returns to scale among these farmers. A statistical test showed that the sum of the partial elasticities of production significantly from unity. However, one should be reminded of the possible biases in the estimate of the returns to scale. Two estimated equations are reported for nonmembers of the cooperative. They differ by the absence of the education variable in one of them. Leaving out the education variable results in slight modifications in the size of the coefficients of the other variables. However these modifications alter the size of the value of the marginal productivity of the other inputs to some extent. Due to this fact, the equation containing the education variable was used in the analysis. In this equation all coefficients are statistically significant except for the buildings and education variables. The sum of the partial elasticities of production is greater than unity implying that there are increasing returns to scale among these farmers. Also, a statistical test showed that this sum differs significantly from unity. However the possibility of biases in the estimate of the returns to scale is not excluded. The economic efficiency of resource use was evaluated by comparing the value of the marginal productivity of the i th input with their corresponding resource prices. The value of the marginal productivity for each input is greater than the respective input price. The determination of input prices is detailed in chapter 4. For land and labor these prices are averages calculated from the sample for each group separately. With respect to the other prices, prices are the opportunity cost of one cruzeiro invested in each input. Maximum economic efficiency of resource use occurs when the VMP x 1/opportunity cost of xi ratio is equal to unity. A statistical test showed that for the cooperative this ratio does not differ statistically from unity for all resouces except the land resource. This implies a disequilibrium in the land market. With respect to the nonmembers of the cooperative the ratio does not differ statistically from unity for all resources. This implies that nonmembers are somewhat closer to equilibrium than members of the cooperative. This is expected because nonmembers have farmed in the region for a longer time. Also, a statistical test showed significant differences when the values of the marginal productivity of labor and land are compared between the two groups of farmers. Members of the cooperative obtained higher marginal value products for these two inputs than nonmembers. This may be explained by differences in the degree of mechanization, utilization of fertilizer and lime and quality of land and labor. Land that has been farmed longer is likely to be less productive than newly cleared land. Internal rates of return to investment were calculated for the inputs where a reasonable time length from the utilization of the input up to the selling of the crops could be determined. With respect to the members of the cooperative the highest maginal internal rate of return is obtained through investment in land resource (89%) and for nonmembers the highest marginal internal rate of return is related to investment in modern inputs (96%). This latter result appears to be inconsistent with the statistical test for equilibrium condition, i.e., the VMP xi/opportunity cost of xi ratio does not differ statistically from unity for the modern inputs. However one should be reminded that the calculated t-value for this test is a function of the variance of the above ratio. The greater the variance of the ratio, the smaller is the calculated t-value. In the present case a large variance of the above ratio resulted in a t-value that was not significant at the usual confidence levels. A demand function for fertilizer was derived from the estimated production for the members of the cooperative, assuming that quantities of other inputs and price of output are allowed to adjust when there is a change in fertilizer use. The price alasticity of demand for fertilizers together with the price elasticity of demand for agricultural output were used to estimate the effect of restricting the use of fertilizer say due to a reduction in imports. For example, restricting the quantity of fertilizer and lime by 20 percent should increase agricultural product prices in the aggregate by 10.48 percent. (See Chapter 4). The expected increases in agricultural product prices in the aggregate at the farm level are greater than those expected at the retail level, except when the elasticities of demand at retail and farm levels are equal. In this case the expected increases in output prices are the same for both levels. Returns to education were determined for farmers who are members of the cooperative of Cotia. When the average number of years of schooling of an average farmer is considered, the internal rate of return to investment in education is 24.78 percent. For this computation it is assumed that the yearly return to education for the average farmer will remain constant throughout his working life assumed to be 50 years. The two major components of the education costs used in this study are public and private costs with the latter being divided in forgone earnings and expenditures for books and supplies. Tuition costs amount to zero cruzeiros. Because there is a large variation in the level of schooling of the members of the cooperative, internal rates of return were determined by levels of schooling. Differences in net income among farmers are attributed to differences in education. The highest internal rate of return is obtained when investment in the level 4 to 8 years of education is cosidered. (25.49%). Internal rates of return to investment in education with respect to the nonmembers of the cooperative could not be determined. This is due to the fact that the coefficient of the education variable was not statistically significant in the estimated production fuction for this group of farmers and that net income per level of education turned out to be negative for education levels above 0 to 4 years. However the number of farmers in the education levels above 0 to 4 years is so small that one not draw any conclusion from these figures. The study indicates that education is an important factor of production, at least with respect to the members of the cooperative. Relatively high internal rates of return to education were obtained. Considering that the costs of education in the levels 0 to 4 and 4 to 8 years are relatively low, investment in this education should result in high rates of return. MenosDuring the 1950's and 1960's the Brazilian policy to achieve increases in agricultural prodution was based mainly on the expansion of cultivated area. However in the early 1970's this policy of expansion was combined with a more agressive research program. This was due to the fact that soils of good quality were already in cultivation and policy makers faced one decision problem: should they try to increase productivity of land already in cultivation or should they attempt to increase the cultivated area using land of poorer quality? Both approaches have been taken by the Brazilian government. The research program was improved in the sense that with the creation of EMBRAPA (Brazilian Public Research Corporation) many Brazilians are now training in universities abroad, mainly in the U.S. This training is likely to improve the quality of research in the country. In addition new land has been brought into production. Among the regions that have a potential for agricultural utilization, the cerrados have fairly good potential even though the cultivation of these areas has some limitations. The cerrados area are plains and offer no problems with respect to mechanization; however soil quality is not good and lime and fertilizer must be used in order to assure some acceptable productivity level. Besides this, the cerrados area has irregular rain fall distribution which can be a major factor in limiting production. The POLOCENTRO ( Development Program of Cerrados ) is an institution... Mostrar Tudo |
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Palavras-Chave: |
Brasil; Investiment. |
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Thesagro: |
Agricultura; Cerrado; Investimento. |
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Thesaurus Nal: |
agriculture; Brazil. |
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Categoria do assunto: |
-- |
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Marc: |
LEADER 10544nam a2200217 a 4500
001 1546315
005 2000-08-15
008 1979 bl uuuu m 00u1 u #d
100 1 $aRIBEIRO. J. L.
245 $aRates of return to agricultural investiment in the cerrados area in Brazil.
260 $a[S.l.]: University of Minnesota$c1979
300 $a124p.
500 $aPhD. Thesis.
520 $aDuring the 1950's and 1960's the Brazilian policy to achieve increases in agricultural prodution was based mainly on the expansion of cultivated area. However in the early 1970's this policy of expansion was combined with a more agressive research program. This was due to the fact that soils of good quality were already in cultivation and policy makers faced one decision problem: should they try to increase productivity of land already in cultivation or should they attempt to increase the cultivated area using land of poorer quality? Both approaches have been taken by the Brazilian government. The research program was improved in the sense that with the creation of EMBRAPA (Brazilian Public Research Corporation) many Brazilians are now training in universities abroad, mainly in the U.S. This training is likely to improve the quality of research in the country. In addition new land has been brought into production. Among the regions that have a potential for agricultural utilization, the cerrados have fairly good potential even though the cultivation of these areas has some limitations. The cerrados area are plains and offer no problems with respect to mechanization; however soil quality is not good and lime and fertilizer must be used in order to assure some acceptable productivity level. Besides this, the cerrados area has irregular rain fall distribution which can be a major factor in limiting production. The POLOCENTRO ( Development Program of Cerrados ) is an institution created by the federal government which is responsible for the development of these regions. In 1974 the state of Minas Gerais started a development program in the Alto Paranaiba region. This program is part of the expansion of the cultivated area utilizing the cerrados. This program is associated to one of the strongest agricultural cooperatives in Brazil, namely the agricultural cooperative of Cotia. In the program's region there are two types of farmers: members and nonmebers of the cooperative. Farmers who are members of the cooperative are in the majority japanese people who came from the south of Brazil. They were selected to participate in the program according to their entrepreneurial ability and also according to their past experience in farming. They cultivate coffee, soybeans and wheat. Nonmembers of the cooperative are natives of the region. They produce mainly grains and dairy products. Little is known about the profitability of investment in the cerrados area. This study tries to determine what is the highest pay-off investment farmers have been making in that region. Separate estimates of investment returns are made for each group. Of primary interest is the difference in educational levels between the two groups of farmers and the contribution of education to agricultural production in the area. The production function technique is used to generate the necessary information to calculate rates of return. A Cobb-Douglas type function is used, allowing the estimation of marginal products and associated rates of return to investment in the corresponding inputs. The ordinary least squares method is used to estimate the production functions. The data used in this study are mainly cross-section collected through a survey with the agricultural producers in the Alto Paranaiba region. Some secondary data were collected from the institutions which work with the program. Farmers were divided into two groups: members and nonmembers of the cooperative of Cotia. The sample size for the first group of farmers was 74 and for the second group 119. The measurement of the output and input variables used in the estimation of the production function is detailed in chapter 3. The coefficients if the variables of the estimated production functions for both groups of farmers are presented in chapter 4. With respect to the results obtained for the members of the cooperative all the coefficients are of reasonable size and all are statistically significant at the usual confidence levels (95 and 99 percent), except the coefficient of the seeds variable. However this variable was not dropped from the equation because its coefficient had the expected sign and it was greater than the corresponding standard deviation. A statistical test was perfomed to test whether the coefficient of the education variable is different from the coefficient of the labor variable. The result showed that these two coefficients are not statistically different at 95 percent confidence level, implying that the labor variable could be adjusted for qualty differences. The sum of the partial elasticities of production is greater than unity implying that there are increasing returns to scale among these farmers. A statistical test showed that the sum of the partial elasticities of production significantly from unity. However, one should be reminded of the possible biases in the estimate of the returns to scale. Two estimated equations are reported for nonmembers of the cooperative. They differ by the absence of the education variable in one of them. Leaving out the education variable results in slight modifications in the size of the coefficients of the other variables. However these modifications alter the size of the value of the marginal productivity of the other inputs to some extent. Due to this fact, the equation containing the education variable was used in the analysis. In this equation all coefficients are statistically significant except for the buildings and education variables. The sum of the partial elasticities of production is greater than unity implying that there are increasing returns to scale among these farmers. Also, a statistical test showed that this sum differs significantly from unity. However the possibility of biases in the estimate of the returns to scale is not excluded. The economic efficiency of resource use was evaluated by comparing the value of the marginal productivity of the i th input with their corresponding resource prices. The value of the marginal productivity for each input is greater than the respective input price. The determination of input prices is detailed in chapter 4. For land and labor these prices are averages calculated from the sample for each group separately. With respect to the other prices, prices are the opportunity cost of one cruzeiro invested in each input. Maximum economic efficiency of resource use occurs when the VMP x 1/opportunity cost of xi ratio is equal to unity. A statistical test showed that for the cooperative this ratio does not differ statistically from unity for all resouces except the land resource. This implies a disequilibrium in the land market. With respect to the nonmembers of the cooperative the ratio does not differ statistically from unity for all resources. This implies that nonmembers are somewhat closer to equilibrium than members of the cooperative. This is expected because nonmembers have farmed in the region for a longer time. Also, a statistical test showed significant differences when the values of the marginal productivity of labor and land are compared between the two groups of farmers. Members of the cooperative obtained higher marginal value products for these two inputs than nonmembers. This may be explained by differences in the degree of mechanization, utilization of fertilizer and lime and quality of land and labor. Land that has been farmed longer is likely to be less productive than newly cleared land. Internal rates of return to investment were calculated for the inputs where a reasonable time length from the utilization of the input up to the selling of the crops could be determined. With respect to the members of the cooperative the highest maginal internal rate of return is obtained through investment in land resource (89%) and for nonmembers the highest marginal internal rate of return is related to investment in modern inputs (96%). This latter result appears to be inconsistent with the statistical test for equilibrium condition, i.e., the VMP xi/opportunity cost of xi ratio does not differ statistically from unity for the modern inputs. However one should be reminded that the calculated t-value for this test is a function of the variance of the above ratio. The greater the variance of the ratio, the smaller is the calculated t-value. In the present case a large variance of the above ratio resulted in a t-value that was not significant at the usual confidence levels. A demand function for fertilizer was derived from the estimated production for the members of the cooperative, assuming that quantities of other inputs and price of output are allowed to adjust when there is a change in fertilizer use. The price alasticity of demand for fertilizers together with the price elasticity of demand for agricultural output were used to estimate the effect of restricting the use of fertilizer say due to a reduction in imports. For example, restricting the quantity of fertilizer and lime by 20 percent should increase agricultural product prices in the aggregate by 10.48 percent. (See Chapter 4). The expected increases in agricultural product prices in the aggregate at the farm level are greater than those expected at the retail level, except when the elasticities of demand at retail and farm levels are equal. In this case the expected increases in output prices are the same for both levels. Returns to education were determined for farmers who are members of the cooperative of Cotia. When the average number of years of schooling of an average farmer is considered, the internal rate of return to investment in education is 24.78 percent. For this computation it is assumed that the yearly return to education for the average farmer will remain constant throughout his working life assumed to be 50 years. The two major components of the education costs used in this study are public and private costs with the latter being divided in forgone earnings and expenditures for books and supplies.
650 $aagriculture
650 $aBrazil
650 $aAgricultura
650 $aCerrado
650 $aInvestimento
653 $aBrasil
653 $aInvestiment
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