Examining Rural Productivity in Brazil: A Biome-based Analysis of Large-scale and Family Farming

Brazil, a country with a great territorial dimension and relevant and heterogeneous agricultural production, faces the challenge of climate change, of increasing productivity in the countryside, and of developing an economy with low environmental impact. This paper is designed to assess the impacts of hypothetical 1% productivity increases in large-scale and in family farming within Brazilian biomes induced by public policies that promote the adoption of sustainable agricultural practices as a strategy to address climate change. Such analysis uses a Computable General Equilibrium model specially built for analysis of the rural sectors in the Brazilian biomes: TERM-Biomas. The study reveals that less developed regions could benefit from productivity increases, potentially leading to a reduction in regional inequality if such policies were directed toward them. The cattle industry demonstrates its capacity to drive national economic growth and significantly contributes to exports. The Large-Scale Soybean sector emerges as a key contributor to economic influence. Furthermore, Soybean cultivation exhibits significant ripple effects on non-agricultural sectors such as agricultural pesticides, public utilities, and freight transportation. Initiatives resembling Sustainable Rural Project (SRP) can potentially foster widespread productivity improvements across Brazilian biomes, benefiting large-scale and family farmers.