A new report prepared by the U.S. Department of Agriculture Economic Research Service suggests that farms in Brazil are growing rapidly due to changes in policies that have fostered participation in research and modernization.
Authors of the report postulate that some policies favoring larger producers are widening the production gap between big and small producers. However, that that gap has been narrowed through other policies, including credit and infrastructure investments.
The report says that these changes have also led to investments in science and technology and adoption of those new techniques. The study found that Brazil's ratio of total output to total inputs—or Total Factor Productivity—has increased by 2.55% annually between 1985 and 2006.
The report also concludes that this growth allowed the most efficient farms to produce 138% more in 2006 than in 1985, all while maintaining the earlier input levels.
Though the TFP of average farmers increased more slowly, those farms were still able to produce 62% more in 2006 than in 1985.
The also study points to Embrapa, the agricultural research agency linked to the Ministry of Agriculture and Food Supply in Brazil, as a key factor in boosting TFP on a national level.
Read the full study here.