A new study from Climate Policy Initiative shows that the surge in agriculture output in Cerrado municipalities led to a 37% increase in agricultural GDP per capita.

Rio de Janeiro – Matopiba (the area comprising the Cerrado portions of the Brazilian states of Maranhão, Tocantins, Piauí and Bahia) is considered Brazil’s new agriculture frontier. However, despite the importance of the region to the nation’s economy, the economic aspects of this surge in agricultural output over the past two decades has not been thoroughly studied.

A new study from Climate Policy Initiative (CPI) and PUC-Rio, under the Land Use Initiative (INPUT – Iniciativa Para o Uso da Terra), examines the causes and consequences of agricultural production growth for local economies in Matopiba, an area which is responsible for 10% of the nation’s crops production today.

The analysis shows that agricultural expansion in Matopiba is heavily concentrated in municipalities located in the Cerrado biome. Between 1995 and 2012, cropland in the Cerrado municipalities grew by 3.6 percentage points more than in non-Cerrado municipalities, whereas the value of the agricultural production in the municipalities in this biome grew by 140% more than in the municipalities outside it. CPI/PUC-Rio researchers reveal that this increase in productivity was due not only to cropland expansion, but also to a shift in the mix of crops from rice to soy.

Another important finding is that the the expansion induced a decrease in cattle ranching as farmers shifted their land from pastures to cropland.

Data on GDP also illustrates the changes in the region. For example, the agricultural boom led to a 37% increase in agricultural GDP per capita and a related 10% increase in the services GDP per capita due to increased local demand.

Juliano Assunção, director of CPI and professor in the Department of Economics at PUC-Rio, says Matopiba has the potential to grow even more due to ideal geographical conditions for crops production and relatively cheap land.

“Nevertheless, it is essential for policymakers to better understand the effects of this expansion, so that policies reconciling food production and environmental protection are created in the region.”

The study integrates a series of analyses about Matopiba that INPUT has been developing. Read more about it at http://www.inputbrasil.org/regioes/matopiba/?lang=en.

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Mariana Campos
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