GM technology over the agricultural productivity in Brazilian Cerrado

Occupying the central part of Brazil, Cerrado has about 204 million/ha distributed in 1390 municipalities, with 8.2% preserved areas, 24.4% of Brazilian GDP, and 36.5% of the Gross Production Value of Brazilian agriculture. The "Brazilian savanna", and its outstanding capacity for agricultural production and has been considered extremely relevant for the country in the last decades, taking Brazil a relevant player in the commodity market. The development and agricultural consolidation of the Cerrado can be characterized by three moments, occurring in different periods: the first, wide availability of land, migration, and public policies; advances in mechanization and technological contributions; and, research, improvements of handling techniques and genetic advances that allowed the expansion of productivity. Since legal permission, in 2005, the wide use of GM seeds, average yearly yields of the main GM crops in Brazil (maize and soybean) have increased by 4.93% and 2.63%, respectively. After the introduction of GM maize, many more farmers were able to plant two high-yield crops per year (CELERES, 2018) GM crops have become particularly important, but have not been studied extensively in Brazil. The economical literature is mainly based on Bt cotton crops analysis with groups of farms classified by GM adoption (QAIM; ZILBERMAN, 2003; CROST et al.,2007). Jointly with the advances of biotechnology over Cerrado, a new area is getting distinction, the MATOPIBA region. The region formed by 337 municipalities from four Brazilian states has been expanding its participation in Brazilian agriculture, especially grains. Modern agriculture and biotechnology in heterogeneous regions, such as Cerrado, have influenced the spatial and economic dynamics. These new agricultural processes, such as GM crops, have increased local income (MENDOLA, 2007; KASSIE, SHIFERAW, MURICHO, 2011) environmental benefits (BURACHIK, 2010; KOUSER), have positively affected other sectors, such as industry and services (BUSTOS; CAPRETTINI; PONTICELLI, 2016). Therefore, using a stochastic frontier, the present study explores and measures the effects on agricultural productivity of GM technology in Cerrado, Brazil's main agricultural biome. Different from the literature, we inserted GM technology in the frontier as a shifter. This study also examines elements that affect the technical efficiency of agricultural production in the biome. We also measure the productivity evolution between the MATOPIBA region and other regions of the Cerrado. All increments of production happened in the midst of the evolution of other factors that direct impact production and productivity in Cerrado, but one, in particular, contributed to the evolution of production, the adoption of genetically modified (GM) seed. For inputs and output levels, we used data from the Brazilian Agricultural Census of 2006 and 2017 for each of the 1390 municipalities from Cerrado to do a unique frontier for the whole area of the biome. The output is a real gross production value (price index IGP-DI used to adjust 2006 information). The inputs used are the number of employees (Labor), agricultural area (Land) and Capital measured as the number of tractors. The percentage of harvest land that used GMO seeds and a dummy for states were also used in the frontier. The inefficiency term was controlled by the percentage of establishment per size (Size); Schooling (EDU); Social Capital (CS) and Aridity Index (AI). The stochastic frontier defined in a polled data structure was estimated for all municipalities of Cerrado with data available. The sum of the input’s elasticities shows a constant return to scale. Helfand, Magalhães e Rada (2015) and Morais (2019) found similar results in analysis with Brazilian whole country information The model shows that a labor increase of 10% will expand production, on average, by 0.88%. A 10% expansion of capital produces almost eight times the expansion (7.74%), showing the relevance and impact of mechanization on Cerrado’s agricultural production. The expansion of capital and its relevance in the agricultural production process is demonstrated by Gasques et al. (2012). The Technical Change between 2006 and 2017 shows annual average productivity gains of 1.014%. Thus, the most efficient producers in 2017 were able to produce almost 17% more than in 2006 without increased inputs. In the local landscape, which is broad and flat, large-scale crops, such as cotton, maize, and soybean are particular crops well suited to modern agricultural technology. In the Cerrado, 74.49% of the total planted area in 2017 was devoted to these three crops (IBGE, 2017). The GMO coefficient is represented by a semi-elasticity. A one percentage point increase in the planting of GMO seeds increases the output by 0.364%. This positive result conforms to a priori expectations and correlates with several studies of the impact of GM technology on crops (QAIM; ZILBERMAN, 2003; ANDERSON; JACKSON; NIELSEN, 2005; BURACHIK, 2010; BAKHSH, 2017) When Technical Efficiency (TE), on average, is analyzed for all of the Cerrado, its value shows a small increase from 2006 to 2017, TE2006 = 0.7964 and TE2017 = 0.7967. Those coefficients show high technical efficiency in the Cerrado and a stable annual growth rate. Our results show positive rates while Rada (2013). Among all technical inefficiency controls estimated, only small farms are not supported by the data. Farms with more than 100 ha show greater inefficiency than those with 20 and 100 ha. The other variables, Schooling and Social Capital contribute positively to efficiency when compared with farms in other categories (lower level of education of the manager, for example). The Aridity Index significantly demonstrates that higher humidity increases technical efficiency. The relevant proposal of this study is to analyze the relevance of productivity of the MATOPIBA region when compared with the other regions of Cerrado. The MATOPIBA region had a gain of productivity 17.6% bigger than the rest of Cerrado. So, the main idea of the paper about the greater productive dynamics in the new frontier, as well as the contribution of the new technology, could be observed in the present work.