The economic impacts of the rural credit: An analysis of the Brazilian National Family Farming Strengthening Program by biome

Abstract

This study aims to assess the economic impacts of the National Family Farming Strengthening Program (Pronaf) in the various Brazilian biomes. The impacts at the sectoral, regional, and macroeconomic levels, arising from increases in rural credit to farmers in Brazilian territory – family and non-family farmers separately considered –, are carried out using the Computable General Equilibrium model, TERM-Biomas, specially built for analysis of the rural sectors in the Brazilian biomes. The key conclusion is that all regions of the model win, in the most varied magnitudes. Regions with higher participation in family farming production earn more than others. Up to the year 2020, some regions – from the Caatinga biome – show comparative losses. This may be because traditionally family farming regions would have their demands for primary factors more drastically increased, investments and jobs migrate, for example, from those regions of Caatinga. When the results are analyzed in a wider time limit, however, the results suggest general gains. The more vulnerable and specialized in family farming sectors are the regions, the greater the gains.