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Abstract
The Brazilian agricultural sector has been transformed from a traditional system of production
with low use of modern technologies to a world agricultural leader. That transformation
occurred as the country moved away from import-substitution policies—which nurtured
domestic industrial development at the expense of agriculture—toward market-oriented
policy reforms. These reforms included openness to foreign trade and foreign investment
and the use of new technologies, which led to a new growth pattern. To evaluate that
transformation, the authors use agricultural censuses spanning 1985-2006 to characterize
Brazilian total factor productivity growth, decomposing that growth into technical and
effi ciency changes. This report presents the fi ndings of a study that focuses on the effect of
Brazil’s science and technology investments and other public policies on farm production.
The fi ndings indicate that agricultural research benefi ts have been most rapidly adopted by
the most effi cient farms, widening the productivity gap between these farms and average
farms. That gap, however, has been narrowed through other public policies, such as rural
credit and infrastructure investments, that favor average producers.