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As Agricultural Production Surges in Matopiba, What Are the Consequences for the Local Economy?

Revised: January, 2018
Published: August, 2016

The states of Maranhão, Tocantins, Piauí and Bahia, known collectively as MATOPIBA, have emerged as an important agricultural frontier over the past two decades. The region now produces 10% of the nation’s crops and is an important driver of the expansion in soy and maize production. Despite the importance of MATOPIBA to Brazil’s economy, the impact and extent of this surge in agricultural output has not been thoroughly studied. In order for policymakers and stakeholders to understand more fully how increased production will affect local municipalities, CPI researchers under INPUT (Land Use Initiative – Iniciativa para o Uso da Terra) examine this expansion.

The study shows that agricultural expansion in MATOPIBA is heavily concentrated in municipalities located in the Cerrado biome. The estimates indicate that, since the late 1990s, the share of cropland and value of the agricultural production started to increase faster in municipalities located within the biome than in municipalities outside the biome. Cropland in the Cerrado municipalities grew by 3.6 percentage points more than in non-Cerrado municipalities during the period 1995–2012, whereas the value of the agricultural production in the municipalities in this biome grew by 140% more than in the municipalities outside it during the same period. 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. The analysis also shows that the expansion induced a decrease in cattle ranching as farmers shifted their land from pastures to cropland.

HIGHLIGHTS

 

  • 1995–2012: Compared to non-Cerrado municipalities, the share of cropland in Cerrado municipalities grew 3.6 percentage points more and the value of the agricultural production grew by 140% more;
  • The agricultural expansion boom led to a 37% increase in GDP per capita and a related 10% increase in the service sector GDP. Between 1999 and 2012, GDP per capita increased 11% more in the Cerrado municipalities than in the non-Cerrado ones.