The impact of agricultural policy in Brazil and Germany: a comparative approach between the Western Mesoregion of Paraná and Nordrhein-Westfalen State
From Firenze University Press Journal: Italian Review of Agricultural Economics (REA)
Eduardo de Pintor, Universidade Federal da Integração Latino Americana (UNILA)
Geisiane Michelle Zanquetta de Pintor, Universidade Federal da Integração Latino Americana (UNILA)
Carlos Alberto Piacenti, Universidade Estadual do Oeste do Paraná, Toledo campus (UNIOESTE)
Agriculture plays a key role in society, both in developed and developing economies. In Brazil, it has fulfilled its basic functions, being strongly linked to economic dynamics and food security. It has thus contributed to economic growth, whether it is linked to production focused on the foreign market or to domestic consumption.In the European Union (EU) agriculture has played a prominent role and after The Second World War this has unfolded in the formulation of a Common Agricultural Policy (CAP) which was mainly based on providing food security within its territory. However, its trajectory was strongly influenced by the interests of its member countries related to commercial issues, which were important components in the decisions taken in the economic aspect of agricultural policy (Carvalho, 2016; Contini, 2004). This has raised the economic relevance of agriculture internally in the EU and externally on trade relations in global agricultural markets.In the Brazilian case, the current agricultural policy was systematized around the National Rural Credit System (SNCR), created in 1965 (Do Brasil, De Agronegócio, 2014).
This policy was based on rural credit, aiming at the modernization of agriculture, and reduction of the risk of agricultural activity through rural insurance, thus having its incentives strongly related to these objectives, which were absorbed by grain producers focused on the international market, fulfilling the classical functions of agriculture (Pintor, Silva, Piacenti, 2015). Nevertheless, incorporation of the new targets for agriculture has occurred through specific programmes, which have partially affected farmers.For the EU and Germany, on the other hand, the CAP began with a view to food security and as part of the political bargaining between member countries. The developments of this negotiation based its initial incentives on a system of agricultural price support that provided food security, even at high costs for the bloc, thus needing to be reformed in its trajectory. Reforms that culminated in structural change in the CAP in 1992 (Carvalho, 2016; Abramovay, 2002).
This reform modified the main incentive system established so far, from sustaining agricultural prices to direct payments per hectare. This change deepened in the 2003 reform, which provided for a gradual reduc-tion in incentives until 2013. After this year, the policy’s incentives were exclusively linked to direct payments per hectare.It is in this context of different countries and agri-cultural and international trade policies that cereal-pro-ducing farmers are inserted, both in the Western Mes-oregion of Paraná, Brazil and in the State of Nordrhein-Westfalen, Germany. From 2000 to 2018, both regions had their agricultural production specialized in cereals. The study thus aims to investigate the impacts of agri-cultural policy incentives for cereal production in the Western Mesoregion of Paraná and Nordrhein-Westfalen State from 2005 to 2017.Examining the literature on the subject, it is com-mon to find studies aimed at measuring the impact of agricultural policies in the countries of Europe and South America. For Germany there are studies with the aim of quantifying the incentives promoted by the CAP to farmers (Zhu, Lansink, 2010; Giannakis, Brugge-man, 2015; Tranter et al., 2007). For Brazil there is also a range of studies aimed at measuring the effects of rural credit for agriculture (Capellesso, Cazella, Búrigo, 2018; Do Brasil, De Agronegócios, 2014; Feijó, 2014; Gasques et al., 2014).
However, there is a lack in the study literature that seeks to comparatively measure the impact of agricultural policies in different countries.Thus, the paper also aims to contribute to the inter-national literature by using a methodology that allows the incentives of agricultural policy in countries of different continents to be measured. To achieve the pro-posed objective, an index was elaborated, which has the objective of measuring the percentage of agricultural subsidy in relation to the Gross Value Added of agriculture, calculated from 2005 to 2017 for both regions. This was chosen due to its ability to represent the relation-ship between the total wealth generated in agriculture and the subsidies received by the sector in each country, using the local currency as a measure without the need to resort to monetary or exchange rate corrections.
DOI: https://doi.org/10.36253/rea-12811
Read Full Text: https://oajournals.fupress.net/index.php/rea/article/view/12811
