Agricultural Policy Monitoring and Evaluation 2024

5. Brazil

Main findings

Support to agriculture

Brazilian agriculture has low levels of support and protection. The Producer Support Estimate (PSE) fell from 7.6% of gross farm receipts in 2000-02 to 3.3% in 2021-23. PSE has been relatively low over the past decade, not surpassing 5% and below the average of the 54 countries covered in this report (9%). Domestic prices align with international markets almost fully, with a ratio of producer to border price (Nominal Protection Coefficient, NPC) of 1.02. Average Market Price Support (MPS) is relatively small, but still accounted for more than 60% of PSE. The highest rates of positive Single Commodity Transfer (SCT) are seen for cotton, maize, and wheat.

Budgetary support to producers is provided through input payments, in particular credit at preferential rates and crop insurance. Concessional credit is available for farm marketing, working capital, and fixed capital investment. Since the late-2000s, all support based on input use, mainly credit and insurance, is conditional on environmental criteria and specific farming practices.

Expenditures to general services (General Service Support Estimate, GSSE) amounted to 0.8% of the country’s agricultural value of production in 2021-23, down from 3.5% in 2000-02. More than 90% of that support goes to agricultural research and development (R&D), technology transfer, and extension services, with the rest used for inspection and control and infrastructure. Expenditures on R&D and extension services are equivalent to 0.7% relative to the agricultural value of production, which is above the average of the 54 countries covered in this report (0.5%). The Total Support Estimate (TSE) declined from 0.7% of Gross Domestic Product (GDP) in 2000-02 to 0.5% in 2021-23.

Key recent policy changes

The Harvest Plan of 2023/24 increased the total credit allocation for the 2023/24 harvest by 27% to BRL 364.2 billion (USD 73.6 billion) from the previous Harvest Plan. Credit destined to smallholders, traditional agriculture, and family agriculture was also increased by more than 35% from the previous plan. BRL 1.1 billion (USD 215 million) was allocated to rural insurance subsidies (PSR). This subsidy covers approximately 7.3 million ha equivalent to 3.1% of total agricultural land.

The government allocated BRL 1 billion (USD 200 million) to the Minimum Price Policy (PGPM/CONAB) for the 2023/24 harvest, covering 27 products including main grains for the domestic market. The government allocated BRL 1 billion (USD 200 million) in 2023 to this programme, which includes both government purchases of these products and deficiency payments.

Rural credit was made conditional on the adoption of sustainable agricultural practices, with focus on the recovery and conversion of degraded pastures; after the publication, in 2023, of the National Program for Conversion of Degraded Pastures into Sustainable Agricultural and Forestry Production Systems (PNCPD), which aims to convert 40 million ha of degraded land into arable land over ten years. A new system to reward producers committed to sustainability was created in April 2023, producers registered under the Rural Environmental Registry (CAR) and analysed by the environmental authority, benefit from an additional reduction of interest rates of 0.5 percentage points. These producers also benefit from a further reduction of 0.5 percentage points by adopting selected sustainable agricultural production practices. In 2021, the Rural Product Certificate (CPR Verde) was created, a bond of mandatory registration authorised by the Central Bank. The bond is a promise of future delivery of agricultural products subject to sustainable and conservation practices, which works as a bond for environmental services.

Assessment and recommendations

• Brazil’s main strategic approach to promoting sustainable productivity growth relies on fostering the adoption of technologies adapted to Brazilian landscapes and biomes. The agricultural R&D and innovation system led by EMBRAPA develops plant and animal genetics, as well as production systems that have helped the country to produce more sustainably. More needs to be done to promote sustainability practices for all types and sizes of farms, including continued efforts to limit potentially illegal land clearing for agriculture. The enforcement of the Forest Code needs to be strengthened to build on recent progress to fully halt illegal deforestation.

• Credit at preferential interest rates is a key part of agricultural support in Brazil. This system could be improved by reducing the share of concessional loans for working capital to commercial farms and by simplified regulations and procedures could make it easier for small and medium size farms to access credit.

• Credit programmes that provide incentives for sustainable agriculture could be expanded to reach more farmers to accelerate the transition to an environmentally sustainable sector. These programmes should have robust measurement and verification mechanisms. A larger share of supported credit should be for technological packages that focus on innovation, modernisation, climate-change mitigation and adaptation, and on productivity. Furthermore, subsidised agricultural insurance schemes should be evaluated to determine their efficacy and impacts, while ensuring that they do not crowd out private insurance initiatives.

• Agricultural credit and insurance programmes provided under environmental criteria and zoning rules (ZARC), should continue being assessed with respect to outcomes such as targets related to deforestation and GHG emissions. Moreover, the impact of environmental conditionality set by the Environmental Rural Registry (CAR), the ZARC, and the Forest Code, should remain the basis for improving policy design, along with specific programmes such as the RenovAgro (former ABC+) and initiatives against deforestation.

• GSSE support is mostly invested in R&D, technology transfers, and extension services. But these public outlays represent less than 1% of the value of agricultural production. It is important to increase Brazil’s research and extension capacity to match sector growth, notably through EMBRAPA by focusing on sustainable productivity growth. Additionally, technology transfer and adoption are lower for small-scale farms, policies need to increase the diffusion and creation of innovation networks for medium- and small-scale farmers in all regions of the country and for all production systems, from cereals and agro-industrial product to fruits and vegetables, to livestock and agroforestry, etc.

• The Brazilian Agricultural Policy for Climate Adaptation and Low Carbon Emission (ABC+Plan), has the national sectorial strategy to adapt the sector to climate change. However, the implementation of tailored adaptation practices needs to be monitored and evaluated to ensure progress in the sustainable transformation of production systems.

Development of support to agriculture

Figure 5.1. Brazil: Development of support to agriculture

Table 5.1. Brazil: Estimates of support to agriculture

Million USD

	2000-02	2021-23	2021	2022	2023p
Total value of production (at farm gate)	35 538	220 589	209 079	219 130	233 559
of which: share of MPS commodities (%)	77.53	89.25	90.42	89.50	87.84
Total value of consumption (at farm gate)	34 563	134 353	121 197	135 816	146 047
Producer Support Estimate (PSE)	2 869	7 431	6 830	8 096	7 365
Support based on commodity output	1 013	4 001	4 713	4 472	2 818
Market price support¹	973	3 982	4 712	4 468	2 765
Positive market price support	1 179	4 706	6 884	4 468	2 765
Negative market price support	-206	-724	-2 172	0	0
Payments based on output	40	19	1	4	53
Payments based on input use	1 856	3 377	2 071	3 577	4 483
Based on variable input use	825	1 969	950	2 073	2 884
with input constraints	0	1 969	950	2 073	2 884
Based on fixed capital formation	955	1 388	1 102	1 483	1 579
with input constraints	0	1 388	1 102	1 483	1 579
Based on on-farm services	76	21	20	21	21
with input constraints	0	0	0	0	0
Payments based on current A/An/R/I, production required	0	52	46	48	64
Based on Receipts / Income	0	52	46	48	64
Based on Area planted / Animal numbers	0	0	0	0	0
with input constraints	0	0	0	0	0
Payments based on non-current A/An/R/I, production required	0	0	0	0	0
Payments based on non-current A/An/R/I, production not required	0	0	0	0	0
With variable payment rates	0	0	0	0	0
with commodity exceptions	0	0	0	0	0
With fixed payment rates	0	0	0	0	0
with commodity exceptions	0	0	0	0	0
Payments based on non-commodity criteria	0	0	0	0	0
Based on long-term resource retirement	0	0	0	0	0
Based on a specific non-commodity output	0	0	0	0	0
Based on other non-commodity criteria	0	0	0	0	0
Miscellaneous payments	0	0	0	0	0
Percentage PSE (%)	7.56	3.32	3.23	3.63	3.09
Producer NPC (coeff.)	1.03	1.02	1.04	1.02	1.01
Producer NAC (coeff.)	1.08	1.03	1.03	1.04	1.03
General Services Support Estimate (GSSE)	1 242	1 556	1 416	1 509	1 742
Agricultural knowledge and innovation system	663	1 457	1 318	1 406	1 646
Inspection and control	51	18	17	18	18
Development and maintenance of infrastructure	471	46	44	46	48
Marketing and promotion	5	3	3	4	3
Cost of public stockholding	53	32	34	36	26
Miscellaneous	0	0	0	0	0
Percentage GSSE (% of TSE)	29.78	15.85	15.70	14.49	17.48
Consumer Support Estimate (CSE)	-1 176	-1 216	-1 825	-1 841	18
Transfers to producers from consumers	-1 175	-3 025	-5 468	-2 510	-1 098
Other transfers from consumers	-277	-94	-60	-140	-82
Transfers to consumers from taxpayers	31	814	775	809	860
Excess feed cost	245	1 088	2 928	0	337
Percentage CSE (%)	-3.34	0.93	-1.52	-1.36	0.01
Consumer NPC (coeff.)	1.04	1.02	1.05	1.02	1.01
Consumer NAC (coeff.)	1.03	1.01	1.02	1.01	1.00
Total Support Estimate (TSE)	4 142	9 801	9 021	10 415	9 967
Transfers from consumers	1 452	3 119	5 528	2 650	1 179
Transfers from taxpayers	2 967	6 776	3 553	7 904	8 869
Budget revenues	-277	-94	-60	-140	-82
Percentage TSE (% of GDP)	0.72	0.52	0.55	0.54	0.47
Total Budgetary Support Estimate (TBSE)	3 169	5 819	4 309	5 946	7 202
Percentage TBSE (% of GDP)	0.55	0.31	0.26	0.31	0.34
GDP deflator (2000-02 = 100)	100	467	437	473	491
Exchange rate (national currency per USD)	2.37	5.18	5.39	5.16	5.00

Note: p: provisional. NPC: Nominal Protection Coefficient. NAC: Nominal Assistance Coefficient. A/An/R/I: Area planted/Animal numbers/Receipts/Income. 1. Market Price Support (MPS) is net of producer levies and excess feed cost. MPS commodities for Brazil are: wheat, maize, rice, soybean, sugar, milk, beef and veal, pig meat, poultry, cotton, coffee.

Source: OECD (2024), “Producer and Consumer Support Estimates”, OECD Agricultural policy monitoring (database), https://data-explorer.oecd.org/.

Policy landscape

Main policy instruments

The annual Agricultural and Livestock Plan (better known as the Harvest Plan), administered by the Ministry of Agriculture and Livestock (MAPA), defines the key parameters of the agricultural policy (MAPA, 2023[1]). The plan defines the allocation of resources through credit lines and their respective interest rates. In addition, family farming is managed by the Ministry of Rural Development and Family Farming (MDA). Brazilian agricultural policy has been stable over the past decade, with a focus on:

• rural credit (since the 1960s)

• risk management programmes including subsidised insurance programmes (since 2005)

• limited use of minimum and reference prices and marketing interventions (e.g. government purchases of food)

• agricultural land zoning with environmental compliance

• promotion of biofuels.

Brazil’s innovation system is a key part of its agricultural policy. Services related to innovation and R&D are provided by the Brazilian Agricultural Research Corporation (EMBRAPA), created in 1973. Extension services are provided by National Agency for Technical Assistance and Rural Extension (ANATER) that has agencies in each state.

Price support is low overall, but minimum guaranteed prices are used in some regions of the country. These cover a broad range of crops and a few livestock products such as milk and honey. Minimum prices are set by the National Monetary Council (CMN) based on domestic and international prices and the evolution of production costs in different parts of the country. These are implemented through premiums to commercial buyers who pay minimum fixed prices to producers and public and private options contracts backed by a private risk premium option, among other methods. In addition, producers receive concessional marketing loans at reduced interest rates, which let them time sales for when market prices are higher. The National Food Supply Company (CONAB) operates these programmes on behalf of MAPA. Several programmes offer deficiency payments calculated as the difference between the market price and the minimum (reference) price (e.g. the Rural Equity Prize programme called PEPRO, and the Product Reward Prize programme known as PEP).

Credit at preferential interest rates is jointly administered between the Central Bank, the Treasury, the Secretariat of Economic Policy (Ministry of Finance) and the MAPA. Most rural credit is allocated under the National Rural Credit System (SNCR) and provided at preferential interest rates with differentiated conditions for family farmers (PRONAF), small and medium size farmers (PRONAMP) and commercial farms. The main sources of preferential rural credit are “compulsory resources” or lending quotas for commercial banks equivalent to around 25% of deposits and 59% of Rural Saving deposits, Constitutional Funds, and loans from the National Bank for Economic and Social Development (BNDES).

Short term credit is provided for commercialisation and working capital and long-term credit for investments on fixed capital formation. Long-term credit is provided through the Programme RenovAgro (former ABC+) used on investments on adaptation and mitigation, Moderfrota used for machinery and equipment, the PRONAF and PRONAMP with their investment component, and Inovagro, Moderagro, Proirriga, etc. Additional sources of rural credit are the Coffee Fund (FUNCAFÉ) and the Agribusiness Credit Notes (LCAs).

Created by Law 8929/1994, in 2023 Brazil created the Rural Product Certificate (CPR Verde), a bond of mandatory registration authorised by the Central Bank. The bond is a promise of future delivery of agricultural products subject to sustainable and conservation practices, which works as a market alternative for environmental services. The CPR is one of the most important instruments for rural financing in Brazil, and by the end of 2023 BRL 298 billion (USD 60 billion) of CPRs were delivered in the stock market (MAPA, 2024[2]).

The rural insurance premium programme (PSR) provides subsidised insurance to a diverse range of producers including commercial producers who establish contracts with insurance companies listed by the government. The general agriculture insurance programme (PROAGRO) offers farmers partial compensation for investment losses on working capital loans. Small-scale family farms can benefit from the PROAGRO-Mais, the family farming insurance (SEAF), as well as, in the north-east of the country, the crop guarantee programme (Garantía Safra, GS). Both the rural credit and insurance programmes must comply with environmental criteria defined by the Environmental Rural Registry (CAR). Credit for working capital is conditional on zones of climatic risks (Agricultural Risk Zoning, ZARC), which links agricultural support to farming practices and activities adapted for the environmental sustainability of each geographical zone. Compliance with zoning is also required to access both PRS and PROAGRO programmes. Rural environmental registration of geo-referenced information on rural property, including property perimeters, location of Permanent Preservation Areas, Legal Reserves, Restricted Use Areas, and areas of agricultural production is compulsory across the country since 2012.

Innovation for sustainable productivity growth

Strategic planning

Brazil’s main strategic approach to promoting sustainable productivity growth is by fostering adoption of modern technologies adapted to Brazilian landscapes and biomes, mostly developed within the country itself. Sustainable productivity growth is seen as resulting from sustainable intensification defined as producing more with the same area of land, while reducing negative environmental impacts and increasing contributions to natural capital and environmental services.1 The strategy is structured around three concepts (MAPA, 2023[1]):

• Integrated Landscape Approach (ILA), focusing on increasing the resilience of agricultural production systems

• Synergy between GHG mitigation and adaptation

• Adoption and maintenance of Sustainable Production Systems, Practices, Products and Processes (SPS_ABC).

Research and innovation

In terms of ILA, a major strategy of innovation for sustainable productivity has been R&D to develop high-yielding crops or livestock, conducted by EMBRAPA and disseminated by public and private entities. Several laws were promulgated since the 1980s that led to institutional frameworks for R&D investments and the generation of new technologies such as genetically engineered crops together with strategies to develop markets. Research on traditional plant breeding has also contributed significantly to the expansion and sustainability of agriculture in Brazil over the years. Through different breeding methods, high-performance varieties were produced that improved productivity, yields, resistance to pathogens, tolerance to abiotic stresses and better adaptation to the climatic conditions of each region of the country.

Moreover, genetic engineering methods have been used to develop agronomic traits that are not easily obtained using conventional methods, such as resistance to herbicides and insect pests. The use of transgenic approaches in major crops contributed significantly to integrated pest management. In addition to transgenic technologies, genome editing has become more prominent, developing new traits of agronomic interest through gene knockdown. Research carried out by EMBRAPA also led to improved farm management practices for major crops like soybeans, such as planting windows for each region based on climatic conditions and irrigation management. These production methods allowed for two harvests per agricultural year in certain regions, as well as balanced fertilisation and livestock-forest integration (MAPA, 2024[2]).

Programme implementation

The ABC+Plan fosters sustainable agricultural production systems through an integrated landscape management approach. It also aims to increase productivity and farm income while favouring climate change adaptation and mitigation. The ABC+Plan, which follows the ABC plan (2010-20), involves rural credit, developing and disseminating new technologies among producers (MAPA, 2024[2]). This includes the promotion of several technologies developed by EMBRAPA that decrease total GHG emissions in the Brazilian soybean production system, such as no-tillage system, biological nitrogen fixation, crop-livestock-forest integration, biological inputs, in partial or total, substitution to chemical inputs, and integrated pests, diseases, and weeds management.

Well known examples of the Brazilian agriculture R&D have been the developments of tropical wheat, soybeans, and maize production systems. Sustainable productivity growth is also manifest in the implementation of the Sustainable Production Systems, Practices, Products and Processes (SPSABC), which is supported by the ABC+Plan. These production systems have been adopted across the country, and form part of the adaptation and low carbon emissions measures of the RenovAgro Programme of rural credit.

Precision farming technology is promoted through the National Policy for Incentives on Precision Agriculture and Livestock (Law No. 14 475). The law aims to increase efficiency in the application of inputs, to reduce waste, reduce production costs and increase productivity, as well as ensure environmental, social, and economic sustainability. To support this approach, most rural credit lines finance precision farming equipment. Public investment on infrastructure, particularly digitalisation is a limiting factor as not all rural areas have broadband connectivity.

The National Bio-inputs Programme (NBP) reduces environmentally harmful inputs by promoting bio-inputs and reduced use of pesticides. The NBP, implemented by the Decree (10 375) within the scope of the Ministry of Agriculture, is structured around five action areas:

• products for controlling pests and diseases in plants

• soil fertility, plant nutrition and tolerance to adverse environmental conditions products

• plant and animal genetics, including reproduction

• veterinary products; animal feed; aquaculture products

• post-harvest and processing products of animal and plant origin.

The adoption of bio-inputs and their incorporation into production systems has increased considerably each year, reducing the use of agrochemicals. A widely used practice in the country is integrated pest management (IPM), a group of different technologies used for pest control under agro-ecosystem sustainability. One of the pillars of IPM is integrating control methods such as plant resistance, chemical control (seeking to apply the product to the target and reduce selection pressure) and biological control, conserving the pests’ natural enemies. IPM aims to reduce economic losses from pest attacks, monitor pests and carry out controls only when populations reach the action levels recommended by research.

In 2023, Brazil adopted the Amazon Agricultural Development Plan (2023) that aims to converge public agricultural policies and territorial planning, through regularisation of land ownership, environmental adaptation, re-organisation of agricultural value chains, reduction of deforestation in the Amazon biome and by providing conditional credit to environmental conservation practices. The Permanent Inter-Ministerial Commission for the Prevention and Control of Deforestation was also reinstituted in 2023 and renewed the Action Plan for the Prevention and Control of Deforestation in the Legal Amazon (PPCDAm) and the Action Plan for the Prevention and Control of Deforestation and Queimadas no Cerrado (PPCerrado) (MAPA, 2024[2]).

The two plans propose a set of activities to be implemented to reduce the loss of native vegetation and achieve zero deforestation by 2030. The National Programme for Conversion of Degraded Pastures into Sustainable Agricultural and Forestry Production Systems has the goal to convert 40 million ha of degraded land into arable land over 10 years by developing a production traceability process on sustainability practices. The Rural Product Certificate (CPR Verde), which is a bond to monetise environmental preservation and emissions reduction, offers payments for environmental services.

Recent policy developments

Domestic policy developments in 2023-24

The Ministry of Agriculture has developed its annual 2023/24 Harvest Plan that defines the financial resources and guidelines for Brazil’s main policy instruments such as rural credit, agricultural insurance, commercialisation support, zoning programme, minimum and reference prices and biofuels. Budgets were allocated as follows.

• The total credit allocation for commercial agriculture for the 2023/24 harvest was increased by 27% to BRL 364.2 billion (USD 73.6 billion). Working capital and commercialisation credit represent 75% of the total credit, the remaining 25% is directed to investment. Of this credit for commercial agriculture, medium-size producers receive 17% or BRL 61.14 billion (USD 12.22 billion) through the PRONAMP programme. Preferential interest rates were established at between 7% and 12.5% depending on the type of credit provided to farmers.

• Credit destined to smallholders, traditional agriculture, and family agriculture was set at BRL 77.7 billion (USD 15.6 billion), an increase of more than 35% from the previous period. This credit is implemented by PRONAF. Preferential interest rates vary from 0.5% to 6% depending on the type of credit given to farmers.

• Expenditures on rural insurance subsidies (PSR) is BRL 1.1 billion (USD 215 million). This subsidy covers approximately 7.3 million ha (3.1% of total agricultural land), benefiting more than 78 000 producers, and resulting in a total insurance coverage of BRL 43.9 billion (USD 8.5 billion).

• The Minimum Price Policy (PGPM/CONAB) for the 2023/24 harvest identifies 27 products including main grains for the domestic market. The government allocated BRL 1 billion (USD 200 million) in 2023 to this programme, which includes both government purchases of these products and deficiency payments.

The Harvest Plan of 2023/24 emphasises rural credit to consolidate and expand the adoption of sustainable agricultural practices, with greater focus on the recovery and conversion of degraded pastures under the financing branch of the ABC+ programme (renamed to RenovAgro) by reducing interest rates even further. This measure is expected to increase the availability of arable land, productivity and decrease the pressures to expand agriculture into new areas (MAPA, 2023[1]).

A new system to reward producers committed to sustainability was created in April 2023. Under this programme, producers already registered under the Rural Environmental Registry (CAR) and validated by the environmental agency benefit from an additional reduction of interest rates of 0.5 percentage points. These producers also benefit from a further reduction of 0.5 percentage points (making a total of 1 percentage point less). To qualify for the reduction, the producer must meet one of the following criteria: hold a certification in good agricultural practices recognised by MAPA, possess certification from MAPA's Integrated Production Programme, be certified for organic production, or have undertaken investments under the RenovAgro programme within the past five years. As a result of this and other existing programmes, by the end of 2023, 43% of total rural credit loans of the Harvest Plan were financing production systems with sustainable practices.

A new rule document for the Agricultural Risk Zoning (ZARC) was published in October 2023, establishing a new method for classifying soil, based on water availability. The new method for soil classification increases the accuracy of water risk estimates. The water availability is now classified in six soil categories within each production zone. Soybeans and sesame are the first crops to apply the new method.

The country created in December 2023 the National Programme for Conversion of Degraded Pastures into Sustainable Agricultural and Forestry Production Systems (PNCPD) that aims at converting 40 million ha of degraded pastures into arable land by developing a production traceability process on sustainability practices.

Trade policy developments in 2023-24

In 2023, some agricultural tariffs were reduced to curb food price inflation. Import tariffs for non-Mercosur imports, which had been at 8% for maize and soybeans, 6% for soymeal and 10% for soy oil, were temporarily reduced to zero until December 2024.

Policy context

Key economic and agricultural statistics

Brazil is the largest country in Latin America in terms of area and population and is one of the 10 biggest economies of the world. The country has abundant land and water resources and is a major agricultural producer and exporter. The share of agriculture in Brazil’s GDP increased from 5.5% in 2000 to 6.8% in 2022, while its share in employment decreased from 15.4% to 8.7% during the same period (Table 5.2). These shares remain higher than in most other countries covered in this report. Agro-food exports have grown in importance for Brazil, representing 41.8% of its total exports in 2022. Arable land accounts for 24% of Brazilian agricultural land. Brazil is among the world’s leaders in the production of soybeans, poultry, beef, cotton, corn, and orange juice. Around two-thirds of the total value of agricultural production are crop products, and one-third livestock products. The main product in Brazilian exports is soybeans in grain, meal, and oil.

Table 5.2. Brazil: Contextual indicators

	Brazil		International comparison
	2000*	2022*	2000*	2022*
Economic context			Share in total of all countries
GDP (billion USD in PPPs)	1 582	3 837	3.9%	2.8%
Population (million)	176	215	4.1%	4.1%
Land area (thousand km2)	8 358	8 358	10.2%	10.1%
Agricultural area (AA) (thousand ha)	228 324	239 370	7.6%	8.2%
			All countries1
Population density (inhabitants/km2)	21	26	52	64
GDP per capita (USD in PPPs)	8 995	17 822	9 363	25 965
Trade as % of GDP	8.8	16.3	12.3	16.6
Agriculture in the economy			All countries1
Agriculture in GDP (%)	5.5	6.8	2.9	3.8
Agriculture share in employment (%)	15.4	8.7	-	-
Agro-food exports (% of total exports)	23.4	41.8	6.4	8.0
Agro-food imports (% of total imports)	7.2	4.8	5.8	6.9
Characteristics of the agricultural sector			All countries1
Crop in total agricultural production (%)	67	68	-	-
Livestock in total agricultural production (%)	33	32	-	-
Share of arable land in AA (%)	20	24	32	34

Notes: *or closest available year.

1. Average of all countries covered in this report.

Sources: OECD statistical databases; International Labour Organization (ILO); UN Comtrade; World Bank, WDI; FAO database and national data.

After a drop related to COVID-19, Brazilian GDP grew moderately at 2.9% in 2022 and 3.04% in 2023 (Figure 5.4). At the same time, unemployment decreased to 7.84% in 2023 from 9.272% in 2022, reaching levels not seen since 2015. Inflation decreased to reach 4.59% in 2023, from a 9.3% in 2022, mainly explained by changes in food and energy prices.

Agro-food exports in Brazil have exceeded USD 80 billion per year since 2011, generating an annual agro-food trade surplus of more than USD 125.88 billion in 2022 (Figure 5.5). Around 56% of Brazilian agro-food exports are primary products for industry and 21% of processed food for industry for 2022.

Between 2012 and 2021, Brazilian agricultural production increased at an annual rate of 2.6%, slightly above the world average (1.89%). Increases in production were driven by intermediate input growth (1.49%) and Total Factor Productivity (TFP) growth of 1.42% per year, again well above the global average, while increased use of intermediary inputs was offset by the declining use of primary factors in agricultural production (Figure 5.6).

Agriculture accounted for 43% of GHG emissions in 2021, which is below the level observed in 2000, but still high compared to the OECD average (Table 5.3). The use of energy by the agricultural sector has increased up to 5.6% of total use in 2021, also above the OECD average. The larger share of the agricultural sector in the Brazilian economy and the importance of pasture-based livestock contribute to these outcomes. Even though the agriculture’s share of water abstractions remained high at 61.6%, water stress is low (0.8). Nutrient surpluses in Brazil have increased since 2000, and phosphorous balance is higher than the OECD average.

Table 5.3. Brazil: Productivity and environmental indicators

	Brazil		International comparison
	1991-2000	2012-2021	1991-2000	2012-2021
			World
TFP annual growth rate (%)	2.8%	1.4%	1.7%	1.1%
			OECD average
Environmental indicators	2000*	2022*	2000*	2022*
Nitrogen balance, kg/ha	21.0	28.1	32.1	28.2
Phosphorus balance, kg/ha	11.8	19.7	3.3	2.3
Agriculture share of total energy use (%)	4.8	5.4	1.7	2.0
Agriculture share of GHG emissions (%)	45.3	43.3	8.7	10.1
Share of irrigated land in AA (%)	1.4	2.3	-	-
Share of agriculture in water abstractions (%)	58.3	61.6	47.0	49.5
Water stress indicator	0.5	0.8	8.7	..

Notes: * or closest available year.

Sources: USDA Economic Research Service, Agricultural Productivity database; OECD statistical databases; FAO database and national data.

Historical trends in agricultural policies

Before the 1990s, Brazil had a history of government intervention in the agricultural sector. Price interventions were first introduced in the 1940s amid food security concerns, and starting in the 1950s, Brazil adopted an import-substitution industrialisation strategy with wide-ranging controls over supply and prices in the agro-food sector. Prices were both supported for producers and subsidised to consumers.

The National Agency for Food Supplies (SUNAB) regulated distribution of basic foodstuffs and set prices and profit margins for all levels of the food chain, including low prices for consumers. SUNAB also controlled agro-food imports and exports. At the producer level, a general price support system existed for rice, maize, soybeans, beans, cassava, and cotton. Another government agency, the Company for Production Financing (CFP), carried out direct purchases of these commodities at minimum guaranteed prices. Marketing boards were created for wheat, sugar, and coffee. They set overall production volumes, administered marketing quotas, and controlled prices and trade (OECD, 2005[3]; Anderson and Valdes, 2007[4]).

These policies continued until the late 1980s, when the government undertook a general restructuring of the economy. Trade was liberalised, state owned enterprises privatised, domestic markets deregulated, and a customs union established with other South American countries (Mercosur). Agricultural policies were no exception to this move towards openness and less state intervention. State enterprises related to agriculture were dismantled or their functions reduced. Agricultural import tariffs were substantially reduced. Export licensing for primary agricultural products was removed. Brazilian producers faced fewer controls and obtained freer access to world commodity and input markets (OECD, 2015[5]).

Since the mid-2000s, policy has emphasised support to smallholders and setting minimum prices for staples produced in the poorest regions of the country. Purchases of staple foods to be distributed to poor populations has been enhanced, and mandatory sugar cane ethanol fuel-blending continue to be imposed. The National Programme for the Production and Use of Biodiesel was established in 2005 and the blending of biodiesel with mineral diesel became mandatory in 2008. The blend percentage varies between 6% and 15%. Biodiesel is sold through public auctions, where preference is given to manufacturers that support family farming. In addition to prioritising the acquisition of raw materials from family farms, technical assistance by the government is targeted to these farms. Since 2023, the country has emphasised environmental sustainability measures for the sector, such as adaptation and mitigation to climate change, as well as reducing deforestation rates (Table 5.4).

Table 5.4. Brazil: Agricultural policy trends

Period	Broader framework	Changes in agricultural policies
Prior to 1990s	Import substitution Industrialisation model Closed economy	Fixed exchange rates High agricultural tariffs Production and marketing control of agricultural products (CFP state company) Minimum agricultural prices for producers (CFP state company) Subsidised prices of agricultural products for consumers (SUNAB state company) Creation of the Brazilian Agricultural Research Corporation (EMBRAPA) Consumption of sugar cane ethanol stimulated through obligatory blending of ethanol with gasoline
1990-2005	Reforms to trade liberalisation	Floating exchange rates Removal of agricultural price and output controls Reduction of agricultural tariffs of both outputs and inputs Dismantling of marketing boards for wheat, sugar and coffee Dismantling of SUNAB and CFP WTO agreement and Mercosur signed Minimum prices of basic products kept but reduced Subsidised credits (working capital and marketing loans) enhanced as the financial crisis hit farmers Liberalisation of the wheat, coffee and sugar sectors Creation of the Ministry of Rural Development and Family Farming (MDA) Consumption of sugar cane ethanol was also stimulated by the growth of the flex fuel vehicle fleet. Flex Fuel cars have represented more than 85% of new vehicle sales in Brazil since the late 2000s. Law 8 929/1994, creates the Rural Product Certificate (CPR), a bond of mandatory registration authorised by the Central Bank.
2005-2015	Continuing reforms and emphasis on sustainability	Subsidised agricultural credit and insurance subsidies as main agricultural policy, supported by the Law of agribusiness bonds 11076/2004. Minimum prices of basic products set for smallholders through government purchases of staple foods Sugar cane ethanol ratio policy continues to apply Government purchases of staples kept in order to provide food to poor populations Institutionalisation of the National Programme for the Production and Use of Biodiesel. Current regulations of blending ranged between 6% and 15%. Law No. 12 114, 2009 - Creates the National Fund on Climate Change. Law No. 12 187, 2009 - Institutes the National Policy on Climate Change – PNMC. The law establishes the guidelines for the different national sectors, including agriculture, to contribute to the commitments to reduce GHG emissions and adapt to climate change. Decree No. 7 390, 2010 (Art. 3, item IV) established the Sectoral Plan for Mitigation and Adaptation to Climate Change for the Consolidation of a Low-Carbon Economy (ABC Plan), a strategy to consolidate mitigation and adaptation actions. Law 12 651, 2012 (Forest Code) establishes standards for protecting native vegetation in permanent preservation areas, legal reserves, restricted use, forest exploitation, and related matters. Since 2010. Sustainability emphasis on measures for adaptation and mitigation to climate change in agriculture.
2015-2022	Institutional changes and continuous emphasis on sustainability	Incorporation of the structure of the Ministry of Rural Development and Family Farming (MDA) into the into the Ministry of Agriculture and Livestock (MAPA) in 2019, then reinstated as an independent Ministry in 2023. Decree No. 10 606/2021 - Establishes the Integrated Information System of the Sectoral Plan for Consolidation of a Low-Carbon Economy in Agriculture and the Technical Committee for Monitoring the Sectoral Plan for Consolidation of a Low-Carbon Economy in Agriculture. Decree No. 10 828/2021 regulated the issuance of Rural Product Certificate (CPR). The bond was adjusted to be a market alternative for immediate and large-scale adoption of Payment for Environmental Services (PSA).
2023-present	Continuing institutional changes and more emphasis on sustainability	Relatively low support, with subsidised credit continuing as key agricultural policy tool. New competences of the 2023 MDA include family farming, agrarian reform, incorporation of several state enterprises such as CONAB (national supply), CEASA-Minas (wholesale Minas), CEAGESP (warehouse company), ANATER (extension services) and INCRA (agrarian reform). In 2023, MAPA created under its structure the Department of Reforestation and Recovery of Degraded Areas. In 2023, Decree 11 815 established the National Program for the Conversion of Degraded Pastures into Sustainable Agricultural and Forestry Production Systems. Continuous emphasis on the sustainability of rural credit and on strengthening climate change adaptation and mitigation measures.

Brazil provides a relatively low aggregate level of support and protection to agriculture, reflecting its position as a competitive exporter and price maker for a range of commodities. Brazil’s support to agricultural producers included market price support and input subsidies in the 2000s, up to 10% of gross farm receipts. Market price support has gradually disappeared and is dominated by subsidised credit and insurance subsidies. In recent years, total support in Brazil is mostly in the form of budgetary support, in particular for producers’ inputs and for the provision of general services. (Figure 5.7).

References

[4] Anderson, K. and A. Valdes (2007), Distortions to Agricultural Incentives in Latin America, World Bank Group, Washington, DC, http://documents.worldbank.org/curated/en/518211468170062688/Distortions-to-agricultural-incentives-in-Latin-America.

[2] MAPA (2024), Ministry of Agriculture: Brazil’s contribution to the Monitoring and Evaluation of the OECD, 2024.

[1] MAPA (2023), Ministry of Agriculture Plano Safra 2023-2024.

[5] OECD (2015), Innovation, Agricultural Productivity and Sustainability in Brazil, OECD Food and Agricultural Reviews, OECD Publishing, Paris, https://doi.org/10.1787/9789264237056-en.

[3] OECD (2005), OECD Review of Agricultural Policies: Brazil 2005, OECD Review of Agricultural Policies, OECD Publishing, Paris, https://doi.org/10.1787/9789264012554-en.

Note

← 1.  This definition was adopted by Brazil from the Convention on Biological Diversity (target 10) https://www.cbd.int/gbf/targets/10.