PUBLIC INVESTIMENTS FOR AGRICULTURE DEVELOPMENT: the
Brazilian story
José Garcia GasquesEliana Teles Bastos
Seminar IFPRI / Embrapa
Brasília, June 2, 2010
2SOURCE: MINISTÉRIO DA FAZENDA - TESOURO NACIONAL - PORTARIA N.371, 29 DE JUNHO DE 2009
Consolidation of Public Accounts – Consolidation of Public Accounts – Expenditures of 2008Expenditures of 2008
Millions R$Millions R$
FunctionsFunctionsMUNICI-MUNICI-
PALITIESPALITIES STATESSTATES UNIONUNION TOTALTOTAL
AGRICULTUREAGRICULTURE 1.703,71.703,7 4.421,04.421,0 9.475,59.475,5 15.600,215.600,2
AGRARIANAGRARIANORGANIZATIONORGANIZATION 2,52,5 172,8172,8 4.444,04.444,0 4.619,34.619,3
TOTALTOTAL 1.706,21.706,2 4.593,84.593,8 13.919,613.919,6 20.219,520.219,5
Percentage (%)Percentage (%)
MUNICI-MUNICI-
PALITIESPALITIES STATESSTATES UNIONUNION TOTALTOTAL
AGRICULTUREAGRICULTURE 10,9210,92 28,3428,34 60,7460,74 100,00100,00
AGRARIANAGRARIANORGANIZATIONORGANIZATION 0,050,05 3,743,74 96,2096,20 100,00100,00
3
Growth rates of GDP, Union, Agriculture and Agrarian Organization ExpendituresGrowth rates of GDP, Union, Agriculture and Agrarian Organization Expenditures
Annual growth rate (%)Annual growth rate (%)
1980 - 20091980 - 2009
UnionUnionExpendituresExpenditures 6,176,17
GDPGDP 2,492,49
AGR+ AOAGR+ AO 0,300,30Source: MF/ STN, Ipea - Ipeadata
4
Share of Share of Agriculture Agriculture
and Agrarian and Agrarian Organization Organization in Total Union in Total Union Expenditures Expenditures
Share of Share of Agriculture Agriculture
and Agrarian and Agrarian Organization Organization in Total Union in Total Union Expenditures Expenditures
source: Ministério da Fazenda/STN; Ipea - Ipeadata; FGV - Fundação Getúlio Vargas
Union Expenditures
AGR+ AORelation
%1980 207.871 15.670 7,541981 187.517 8.346 4,451982 196.565 10.923 5,561983 185.665 11.377 6,131984 176.319 7.767 4,411985 208.904 7.338 3,511986 362.395 25.778 7,11 Plano Cruzado1987 328.744 39.268 11,95 Plano Cruzado1988 411.378 35.518 8,63 Plano Cruzado1989 968.110 18.677 1,931990 1.388.200 26.929 1,941991 573.462 25.135 4,38 Drought in Southern Region1992 721.135 18.088 2,511993 834.498 21.161 2,541994 604.538 22.293 3,691995 525.723 27.812 5,291996 549.468 19.322 3,52 New Instruments1997 726.976 24.795 3,411998 829.436 18.353 2,211999 784.018 19.631 2,502000 680.757 13.329 1,962001 749.767 13.321 1,782002 756.543 11.856 1,572003 692.230 11.134 1,612004 697.375 13.150 1,892005 734.574 14.603 1,992006 949.249 16.802 1,772007 1.319.623 18.041 1,372008 1.272.538 14.206 1,122009 1.423.883 18.942 1,33
Million reais of 2009
5
Share of Agriculture and Agrarian Organization in Total Union Expenditures
Share of Agriculture and Agrarian Organization in Total Union Expenditures
Source: Ministério da Fazenda/STN; Ipea - Ipeadata; FGV - Fundação Getúlio Vargas
7,5
6,1
11,9
4,43,7
5,3
3,5
2,2 2,0 1,9 1,81,31,1
1,42,0
1,6
1,82,5
3,42,5
1,9
5,6
3,54,44,5
8,6
7,1
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
%
High inflation subsidies
Economy Opened to International
Markets
Family Agriculture Plan (Pronaf)
New commercialization
instruments
6
ExpendituresExpendituresExpendituresExpenditures
Key Actors Key Actors Agriculture SectorAgriculture Sector
Key ActorsKey ActorsAgrarian OrganizationAgrarian Organization
MAPA63,3%
OTHERS6,1%
MF30,6%
MDA96,9%
MAPA2,5%
OTHERS0,7%
MAPA63,3%
OTHERS6,1%
MF30,6%
MDA96,9%
MAPA2,5%
OTHERS0,7%
Source: MF/ STN
7
Federal Expenditures on Agriculture and Agrarian Organization Functions– 1980-
2009
Federal Expenditures on Agriculture and Agrarian Organization Functions– 1980-
2009
Agriculture
14.18115.523
Agrarian Organization
147
4.760
0
5.000
10.000
15.000
20.000
25.000
30.000
35.000
40.00019
80
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
* deflated by IGP-DI of FGV
mill
ions
R$*
200
9
source: STN/MF
8
Federal Expenditures on Agriculture and Agrarian Organization Functions 2000-
2009
Federal Expenditures on Agriculture and Agrarian Organization Functions 2000-
2009
Source: STN/MF
10.9
69
10.7
20
9.47
7
9.12
8
9.79
3
10.2
12
11.8
18
12.6
27
9.67
0
14.1
81
02.0004.0006.0008.000
10.00012.00014.00016.000
mill
ion
s R
$ 20
09*
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
*deflated by IGP-DI of FGV
Agriculture
2.36
0
2.60
1
2.37
9
2.00
6 3.35
7 4.39
2
4.98
4
5.41
4
4.53
5
4.76
00
1.0002.000
3.0004.0005.0006.000
milli
ons
R$
2009
*
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
*deflated by IGP-DI of FGV
Agrarian Organization
9
Share of National Treasury resources
in financing of farmers and cooperatives
Share of National Treasury resources
in financing of farmers and cooperatives
And now, How And now, How farmers obtain farmers obtain
Resources?Resources?
• Self capitalSelf capital• Firms that sell Firms that sell
inputs (Credit inputs (Credit from Industry).from Industry).
• Banking systemBanking system
And now, How And now, How farmers obtain farmers obtain
Resources?Resources?
• Self capitalSelf capital• Firms that sell Firms that sell
inputs (Credit inputs (Credit from Industry).from Industry).
• Banking systemBanking system
Source: Banco Central do Brasil, Anuário do Crédito Rural
yearsyears Share %Share %
19851985 63,9863,98
19861986 64,8764,87
19871987 37,2937,29
19881988 24,5124,51 What Happened ?
19891989 23,9623,96
19901990 26,7226,72
Changes in Rural Credit Legislation
19911991 24,1824,18
19921992 22,9722,97 New sources of financing
19931993 26,6726,67
19941994 27,1127,11 Real Plan “Plano Real”
19951995 19,7019,70 PRONAF
19961996 3,483,48
19971997 1,501,50
19981998 1,661,66
19991999 0,110,11
20002000 0,020,02
20012001 1,611,61
20022002 1,681,68
20032003 1,901,90
20042004 3,833,83
20052005 2,172,17
20062006 0,960,96
20072007 0,960,96
20082008 0,560,56
20092009 0,550,55
10
Evolution of Rural Credit Resources - values of 2009 deflated millions reais
75.186
19.28630.308
48.491
104.438
49.114
132.610
117.232
26.304
0
20.000
40.000
60.000
80.000
100.000
120.000
140.000
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Source: Banco Central do Brasil, Anuário do Crédito Rural
11
Expenditures on Research: Embrapa and Total Factor Productivity
344
TFP
Expenditures on Research (Embrapa)
606
1000
100
200
300
400
500
600
70019
7519
7619
7719
7819
7919
8019
8119
8219
8319
8419
8519
8619
8719
8819
8919
9019
9119
9219
9319
9419
9519
9619
9719
9819
9920
0020
0120
0220
0320
0420
0520
0620
0720
0820
09
Source: Embrapa
Ind
ex
12
Time Series Model ResultsTime Series Model Results
• Figura 1 – Cummulative effects of Embrapa Expenditures shock on TFP.
• Figura 1 – Cummulative effects of Embrapa Expenditures shock on TFP.
• Figura 2 – Cummulative effects of price relation shock on TFP.
• Figura 2 – Cummulative effects of price relation shock on TFP.
Source: Gasques, Bastos e Bacchi, 2008Source: Gasques, Bastos e Bacchi, 2008
13
Agriculture and Agrarian FunctionsWhat Were the Priorities in 2009 ?Agriculture and Agrarian FunctionsWhat Were the Priorities in 2009 ?
ProgramsProgramsMillionsMillionsReaisReais %%
CommercializationCommercialization 4.283,434.283,43 22,6122,61
Rural CreditRural Credit 3.071,473.071,47 16,2216,22
ResearchResearch 1.855,381.855,38 9,809,80
Coffee EconomyCoffee Economy 1.776,161.776,16 9,389,38
Family Agriculture ( Pronaf ) Family Agriculture ( Pronaf ) 1.944,031.944,03 10,2610,26
OthersOthers 6.011,276.011,27 31,7431,74
Agriculture+Agrarian OrganizationAgriculture+Agrarian Organization 18.941,7418.941,74 100,00100,00Source: MF/ STN and Embrapa
14
Agriculture and Livestock Plan Agriculture and Livestock Plan 2010/ 2011 Perspectives2010/ 2011 Perspectives
Agriculture and Livestock Plan Agriculture and Livestock Plan 2010/ 2011 Perspectives2010/ 2011 Perspectives
1. To guarantee higher quantity of financial resources
2. To support medium farmers and the cooperatives
3. To maintain the investment programs
4. To improve Rural Credit operations
5. To increase the capacity of storage
6. To support commercialization
7. Encourage environmentally-friendly practices
8. To expand areas of crops/livestock, forest and Direct Planting Integration
9. Rural insurance expansion
10. Approval of the Catastrophe Fund
15
Assessoria de Gestão Estratégica - AGE
Ministério da Agricultura, Pecuária e AbastecimentoEsplanada dos Ministérios, Bloco D, 7º Andar
CEP 70043-900 Brasília/DFTel: (061) 3218-2644/2978
Chefe - Derli Dossa: [email protected]
EquipeJosé Garcia Gasques: [email protected] Teles Bastos: [email protected]
Assessoria de Gestão Estratégica - AGE
Ministério da Agricultura, Pecuária e AbastecimentoEsplanada dos Ministérios, Bloco D, 7º Andar
CEP 70043-900 Brasília/DFTel: (061) 3218-2644/2978
Chefe - Derli Dossa: [email protected]
EquipeJosé Garcia Gasques: [email protected] Teles Bastos: [email protected]
16
Expenditures of Union in Commercialization and Rural Credit
Expenditures of Union in Commercialization and Rural Credit
Source: MF/ STN
CommercializationCommercialization Rural CreditRural Credit TotalTotal
20002000 3.170,213.170,21 2.446,482.446,48 5.616,695.616,69
20012001 2.820,852.820,85 2.542,302.542,30 5.363,155.363,15
20022002 1.154,671.154,67 3.013,343.013,34 4.168,004.168,00
20032003 2.105,822.105,82 3.056,163.056,16 5.161,985.161,98
20042004 270,26270,26 4.249,184.249,18 4.519,444.519,44
20052005 1.996,611.996,61 3.422,313.422,31 5.418,925.418,92
20062006 3.525,593.525,59 2.934,812.934,81 6.460,396.460,39
20072007 2.861,022.861,02 3.659,603.659,60 6.520,626.520,62
20082008 894,12894,12 2.301,652.301,65 3.195,763.195,76
20092009 4.283,434.283,43 3.071,473.071,47 7.354,907.354,90