Abstract
Technological change in the 1970s and 1980s made it possible to grow soybeans in the remote Brazilian Savanna. However, multiple constraints typical of a developing region prevented many ranchers from adopting soybeans. Following the macroeconomic reforms that opened up the market in Brazil, international traders introduced a new farmer–trader contract that bundled technology, finance, inputs, and market access. The analysis of a novel panel dataset with farm-level census data reveals that this bundled contract led to rapid technological diffusion, agricultural expansion, and a 10-fold increase in agricultural productivity by enabling the conversion of marginal land into commercial soybean plantations.
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