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New evidence of the driving forces behind Brazil's agricultural TFP growth—A stochastic frontier analysis with climatic variables and land suitability index

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  • Spolador, Humberto Francisco Silva
  • Danelon, André Felipe

Abstract

Using panel data from 510 Brazilian micro-regions in three census years (1995, 2006 and 2017), this study presents a productivity decomposition for the Brazilian agricultural sector using stochastic production frontier methods that account for the effects of rainfall, temperature and the land suitability index. We also calculated the total factor productivity (TFP) index and decomposed it into technical efficiency, technological change, scale efficiency and environmental efficiency. This article thus provides a new and more realistic assessment of recent Brazilian agricultural productivity growth. In recent decades, Brazilian agriculture has become widely known for presenting fast productivity growth; however, our results suggest that a lower TFP growth rate than previous estimates (1.96% per annum) and the overall effects of climate change could potentially compromise Brazilian agricultural TFP growth in the long run. Our findings might thus generate insights for agricultural and regional policies to increase efficiency in the sector and promote sustainable agricultural development in Brazil, which will contribute to the sector's competitiveness in international markets, the country's social and economic welfare, and environmental conservancy.

Suggested Citation

  • Spolador, Humberto Francisco Silva & Danelon, André Felipe, 2024. "New evidence of the driving forces behind Brazil's agricultural TFP growth—A stochastic frontier analysis with climatic variables and land suitability index," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 68(02), January.
    • Handle: RePEc:ags:aareaj:343086
    DOI: 10.22004/ag.econ.343086
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    References listed on IDEAS

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    1. Cassiano Bragagnolo & Humberto F. S. Spolador & Geraldo Sant’Ana de Camargo Barros, 2010. "Regional Brazilian Agriculture TFP Analysis: A Stochastic Frontier Analysis Approach," Economia, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 11(4), pages 217-242.
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