Measurement of resource transfers from agriculture: brazil, 1950-1974

This article provides a measure of the substantial role Brazilian agriculture has played in the formation of urban capital during the Import Substitution Industrialization period as a result of implicit transfers. These implicit transfers were associated with divergences between the Intersectoral Terms of Trade and their shadow-value. The work shows that as industrialization intensified, from the mid 50's on, these divergences increased, so that a very large transfer of resources from agriculture took place. A highly subsidized rural credit policy (for modern input purchase) has been in operation since the mid 60's. However, while the policies affecting the agricultural product prices have taxed all producers evenly, the credit policy has only benefited the already well-off and most technologically advanced sections within agriculture. Thus, the rapid capital formation and the implicit tax burden, which the product price and input credit policies implied, have been highly selective and discriminatory, not only between agricultural and non-agricultural sectors as is usually admitted "a priori", but also within agriculture.