< Back to all Publications

The Impacts of Rural Credit on Agricultural Outcomes and Land Use

and

Published: March, 2020

An Analysis by Credit Lines, Producer Types and Credit Uses

In this work, Climate Policy Initiative (CPI/PUC-RIO) provides a detailed impact analysis of the Brazilian Rural Credit policy on agricultural production, land use and deforestation. The impact estimation is done separately for credit lines (Pronaf, Pronamp, Rural Savings – Restricted, and Compulsory Resources), producer types (individuals and firms), and types of credit use (working capital, investments and trade).

Results from this disaggregated analysis show that credit for small farmers leads to greater increases in agricultural productivity, more efficient land use and reduced deforestation. Therefore, the Brazilian rural credit policy should prioritize small farmers. This will better align rural credit subsidies both with the needs of financially constrained producers and national efforts to increase forest conservation.