Rural credit and agricultural development in the Brazilian Amazon: spatial analysis and policy implications

Shenggen FanInternational Food Policy Research Institute and Institute of AgriculturalEconomics of the Chinese Academy of Agricultural SciencesLinxiu ZhangCenter for Chinese Agricultural Policy of the Chinese Academy of SciencesXiaobo ZhangInternational Food Policy Research InstituteI. IntroductionChina is one of the few countries in the developing world that has madeprogress in reducing its total number of poor over the past 25 years.

This Campbell systematic review examines the effects of input subsidies on agricultural productivity, beneficiary incomes and welfare, consumer welfare and wider economic growth. The review summarizes evidence from 15 experimental and quasi‐experimental studies and 16 studies that use computable models, the majority concerning sub‐Saharan Africa. This review examines studies that evaluate the impact of agricultural input subsidies, including subsidies for agricultural machinery, seeds or fertilisers, on farmers, farm households, wage labourers or food consumers in low‐ or lower‐ middle‐income countries. It includes 15 experimental and quasi‐experimental studies and 16 simulation modelling studies. The majority relate to sub‐Saharan Africa (15 to Malawi) and to subsidised fertilizers and seeds. Fertiliser and seed subsidies are associated with increased use of these inputs, higher agricultural yields and increased income among farm households, but evidence of their effects on poverty is limited. There is much evidence that subsidy schemes are prone to inefficiency, bias and corruption. Models show that introducing or increasing subsidies generally results in positive effects for consumers and wider economic growth. However, the models indicate that the way subsidies are funded, world input prices and beneficiary targeting all have important influences on predicted outcomes. The authors were not able to find any studies examining subsidies for machinery. Plain language summary Agricultural input subsidies raise input use, yields and farm income. The review in brief Agricultural input subsidies raise input use, yields and farm income, but the evidence base is small and comes from a limited number of schemes and countries. What is this review about? Greater use of improved seeds and inorganic fertilisers, and increased mechanisation, could boost agricultural productivity in some low‐ or lower‐middle‐income countries, but there is disagreement about whether subsidising these inputs is an effective way to stimulate their use. This review examines the evidence for impacts of input subsidies on agricultural productivity, beneficiary incomes and welfare, consumer welfare and wider economic growth. What is the aim of this review? This Campbell systematic review examines the effects of input subsidies on agricultural productivity, beneficiary incomes and welfare, consumer welfare and wider economic growth. The review summarizes evidence from 15 experimental and quasi‐experimental studies and 16 studies that use computable models, the majority concerning sub‐Saharan Africa. What are the main findings of this review? What studies are included? This review examines studies that evaluate the impact of agricultural input subsidies, including subsidies for agricultural machinery, seeds or fertilisers, on farmers, farm households, wage labourers or food consumers in low‐ or lower‐ middle‐income countries. It includes 15 experimental and quasi‐experimental studies and 16 simulation modelling studies. The majority relate to sub‐Saharan Africa (15 to Malawi) and to subsidised fertilizers and seeds. What are the main results of this review? Fertiliser and seed subsidies are associated with increased use of these inputs, higher agricultural yields and increased income among farm households, but evidence of their effects on poverty is limited. There is much evidence that subsidy schemes are prone to inefficiency, bias and corruption. Models show that introducing or increasing subsidies generally results in positive effects for consumers and wider economic growth. However, the models indicate that the way subsidies are funded, world input prices and beneficiary targeting all have important influences on predicted outcomes. The authors were not able to find any studies examining subsidies for machinery. What do the findings of this review mean? Input subsidies can increase input use, and raise agricultural productivity with wider benefits. However, the design of subsidy schemes is crucial to their effectiveness, if they are to reach the desired farmers and stimulate input use. The effectiveness of subsidies in comparison to other interventions requires further study. A relatively small number of appropriate studies were found, and well‐documented research in countries beyond sub‐Saharan Africa is needed to ensure the wider relevance of these results. Mixed‐methods, theory‐based impact evaluations would help explore the impacts of different levels of subsidies for different beneficiaries. Simulation models studies could make more use of rigorous evidence from experimental and quasi‐experimental studies and examine more helpful subsidy comparisons. More clarity is needed in the reporting of methodological approaches, statistical information and the type and size of input subsidy implemented or modelled. How up‐to‐date is this review? The review authors searched for studies up to 2013. This Campbell systematic review was published in 2018. Executive summary/Abstract Background In recent decades, agricultural productivity in low‐ and lower‐middle‐income countries, particularly in Africa, has fallen increasingly behind that of upper middle‐income countries. Adequate use of agricultural inputs such as improved seeds and inorganic fertilisers has been identified as one way of enhancing agricultural productivity. However, these inputs can be financially unaffordable or unattractive to many poor farmers in developing countries. Agricultural input subsidies aim to make inputs available to users at below market costs as a way of incentivising adoption, increasing agricultural productivity and profitability, increasing food availability and access and ultimately reducing poverty and stimulating economic growth. They were common in poor rural economies in the 1960s and 70s. Their use declined in the 1980s and 90s, but recent years have witnessed a resurgence of interest and investment, mainly in Africa. There remains considerable debate about the effectiveness and efficiency of their use and the conditions under which they may or may not work. Objectives This systematic review explores the effects of agricultural input subsidies on agricultural productivity, farm incomes, consumer welfare and wider growth in low‐ and lower‐middle‐income countries. This research question is divided into the following primary and secondary research questions: What are the effects of agricultural input subsidies on agricultural productivity and beneficiary incomes and welfare? What are the effects of agricultural input subsidies on consumer welfare and wider economic growth? Search methods We carried out a systematic search for includable studies in a wide range of sources and using a variety of search methods. We searched academic and online databases, carried out forwards and backwards citation tracking of included studies, and consulted experts. There were no restrictions on publication year, type or language, though searches were undertaken in English. The main searches were completed in November 2013. However, we incorporated additional papers after this date where they became available before our analysis was completed. Selection criteria To be included, studies had to examine the effects of agricultural input subsidies, including products, machinery, seeds or fertilisers, on farmers, farm households, wage labourers or food consumers in low‐ or lower‐ middle‐income countries. Eligible comparisons included no active agricultural input subsidy intervention, wait‐list, alternate input subsidy intervention, or other interventions providing access to inputs. We included experimental or quasi‐experimental studies to address our primary research question regarding primary outcomes of adoption, productivity and farm income. We included econometric modelling studies to address our secondary research question on consumer welfare and wider economic growth outcomes. Studies were assessed by a single reviewer at both title and abstract level and full‐text level. A second reviewer then checked screening decisions taken at full‐text level. Data collection and analysis We extracted a range of data including bibliographic details, outcomes, time period covered, study design and outcomes data. For our primary research questions we synthesised evidence from experimental and quasi‐experimental studies using meta‐analysis, meta‐regression analysis and a qualitative synthesis of relevant implementation and contextual factors. For our secondary research questions we synthesised evidence from modelling studies narratively and displayed effects in scatter plots where possible. Results We identified 15 experimental

Achieving agricultural productivity growth will not be possible without developing and disseminating improved agricultural technologies that can increase productivity to smallholder agriculture farm. It is significantly important to identify the factors that affect agricultural productivity and find the methods of the rural household income improvements. Therefore, the objective of this article is to review and summarize the different factors that affects agricultural productivity and rural household income in Ethiopia based on studies conducted by different scholars so far. Land-labor ratio, use of fertilizer, use of extension service, use of pesticide, manure, number of oxen used and household size are found to be the most significant variables that affect agricultural labor and land productivity. However, drought has statistically significant and has negative effect on both labor and land productivity by the same magnitude. Labor productivity, non-farm income and land productivity are found to be the most determinants of household income. However, number of dependency ratio is significantly and negatively affecting the rural household income. Sex of the household head is the main socio-economic factor for the variation of income among the rural households. The review also concludes that, Labor productivity is the most potent for factor of production and rural household income enhancement. Then increasing land-labor ratio is important for agricultural productivity enhancement and promotion of both farm labor and non-farm income are best focusing to speed up for the enhancement of rural household income. Keywords : labor productivity; land productivity, rural household income DOI: 10.7176/JESD/11-18-01 Publication date: September 30 th 2020

As one of the last agricultural frontiers of the humid tropics, Amazonia is the largest area of the world currently undergoing frontier settlement. Although the earliest intrusions of foreign populations into Amazonia date from pre-Hispanic times, the large-scale entrance of peasant colonists into the vast region is a recent phenomenon. Much of this movement represents the spontaneous migration of peoples, but governments in the region have also become increasingly interested in opening up and integrating Amazonia to national and international economies. These actions are frequently seen as potential solutions to a number of national problems, including the need to increase agricultural production, correct spatial imbalances in the distribution of population, exploit frontier lands for reasons of national security, and defuse potentially serious political problems resulting from the existing agrarian structure, landlessness, and unemployment. The upper basin of the Amazon in Ecuador, bordering on the eastern slopes of the Andes, is one such area of frontier settlement. Recent decades have witnessed the rapid conversion of these Amazonian forests to agricultural uses through a series of schemes bearing such labels as land development and colonization. Most forest intervention in the region has come at the hands of colonist farmers attempting to establish land claims along transport routes originally constructed to aid in petroleum exploration and exploitation. These are farmers who formerly have made a living in long-established farmlands and who, for various reasons (population pressures, pervasive poverty, maldistribution of farmland, lack of inputs for intensive cultivation, lack of nonagrarian livelihood opportunities, and generally inadequate rural development) have been increasingly squeezed out of their homelands. A marginal person by virtue of his low socioeconomic and political status, the farmer often perceives

This thesis consists of three essays which measure land security, estimate agricultural efficiency and farm productivity, and analyze their impacts on farm income in rural China. The work covered in this thesis is motivated by the impressive performance of China s agricultural production since the reform in 1979 and the currently hotly disputed issues on rural land policy reform. With three implicitly connected research topics being proposed, both theoretical discussions and empirical estimations have been comprehensively conducted in the thesis. This study contributes to the literature explaining China s agricultural productivity and efficiency change in the past three decades, the ongoing assessment of land tenure security under China s unique land tenure system, and, specifically, the impact of land tenure insecurity on farm household productive efficiency and thus in farm household income.

This article questions the promise of nature-based solutions (NBS) to generate income for communities by analyzing how payments for ecosystem services (PES) compensate or marginalize traditional sustainable production in the Brazilian Amazon. It finds two PES approaches: In the 2000s, peasant movements proposed the Public Program for the Sustainable Development of Rural Family Production in the Amazon, which compensated work and provided technical assistance. In contrast, the dominant PES projects aim for green business but restrict traditional production practices. The shift reflects the exploitation of ‘green labour' and the global push by agribusiness and finance to collect rents from NBS.

This study constructs a regional CGE model of China to analyze the differential regional impacts of China's WTO accession on agricultural production, trade, and farmers' income. The results show that China's WTO accession will generally improve the total welfare but will widen existing gaps among regions and sectors. It is expected that the agricultural sector will suffer if only agricultural trade is liberalized, as cheap imports of agricultural products, particularly grains, will increase and domestic agricultural production and farmers' agricultural income will decline. Full trade liberalization, i.e., lifting trade barriers in both agriculture and non-agriculture will benefit farmers and agriculture at the national level. However, the increase in rural income is still smaller than the increase in urban income, which implies that the rural- urban income gap may be further widened. Furthermore, among the regions, the less-developed rural areas will benefit little or even suffer because their major production activities and income sources are still from agriculture, especially from traditional agricultural activities such as grain production.

India has systematically pursued a supply-led approach to increasing agricultural credit. Its objectives have been to replace moneylenders, to relieve farmers of indebtedness, and to achieve higher levels of agricultural credit, investment, and output. India's success in replacing moneylenders has been outstanding. Between 1951 and 1971 their share of rural credit appears to have dropped from more than 80 percent to 36 percent. (It may have dropped to as low as 16 percent by 1981, but that estimate is disputed). Still, institutional credit is far from reaching all farmers. Only about a quarter of cultivators borrow, and no more than 2 percent take out long-term loans. Most small farmers have little access to credit, and long-term credit goes mostly to large farmers. Overall, farm debt has probably not increased sharply in real terms, as formal credit has primarily substituted for credit from other sources. Moreover, with the rapid growth of commercial banks in the 1970s, the system mobilized more deposits than it lent in rural areas in 1981. Of course, enhanced deposit services are a useful service of the rural population, but one must ask what has been the impact of heavy rural credit and better financial services on agricultural investment, production, and rural incomes. The authors' econometric results suggest that the rapid expansion of commercial banks in rural areas has had a substantially positive effect on rural nonfarm employment and output. The availability of better banking facilities appears to have overcome one of the obstacles to locating nonfarm activities in rural areas. Expanded rural finance has had less of an effect on output and employment in agriculture than in the nonfarm sector. The effect on crop output has not been great, despite the fact that credit to agricluture has greatly increased the use of fertilizer and private investment in machines and livestock. There has been more impact on inputs than on output, so the additional capital investment has been more important in substituting for agriclutural labor than in increasing crop output. But overall, rural credit and expansion of the rural financial system have had a positive effect on rural wages. Creating nonfarm jobs has apparently added more to total employment than the substitution of capital for labor has subtracted it in agriculture. So, wages have risen even for agricultural workers, albeit modestly. The supply-led approach to agricultural credit that has been pursued for three decades has clearly benefited current borrowers and farm households formerly indebted to moneylenders. It has also spurred fertilizer use and investment in agriculture. It has been less successful in generating viable institutions - and has failed to generate agricultural employment. The policy's costs to India's government have been high as portfolio losses associated with poor repayment ultimately have to be borne by the government or one of its institutions under optimistic assumptions. The benefits of the agricultural income are at best no more than 13 percent higher than the cost to the government of the extra agricultural credit. If assumptions about the cost of supplying the credit and about repayment rates are less optimistic, the social costs - and the costs to the government of providing the credit - would have exceeded the benefits in agricultural income. The expansion of commercial banks to rural areas paid off in nonfarm growth, employment, and rural wages. The question is: Could these benefits have been achieved without imposing agricultural credit targets on the commercial banks and credit cooperatives? Or did the commercial banks expand only because they were forced to lend to agriculture? The authors could not answer these questions with the data at hand.

This paper examines the effects of the Brazilian governments' title granting policies on the efficiency of agricultural and timber production in the Brazilian Amazon. A two-stage procedure is used that combines Data Envelopment Analysis (DEA) and a Tobit regression. Provision of private land titles before 1995 is found to positively affect the technical efficiency of agricultural and joint agriculture–timber production in 1995. Governmental expenditures, including expenditures to secure property rights, also are found to increase technical efficiency in the agricultural industry. The analysis indicates that revenue efficiency can be improved by producing more roundwood and less agricultural product. Land-granting policies may favorably affect environmental conservation by intensifying land use in agriculture, but they also may harm development by discouraging timber production.

Based on a panel data from the National Rural Fixed Point Survey of China, this study explored the effects of information and communication technologies (ICTs) on agricultural income and labour productivity of Chinese farmers using fixed effects models and two-stage least square estimations. The results indicate that the deployment of mobile 3 G led to a reduction in both farmers’ agricultural income and agricultural net income by CNY 560.64 and 331.2, respectively, because ICTs prompted farmers to engage in off-farm employment, thereby allocating less time and input to farming activities. Village access to Internet and 3 G increased farmers’ labour productivity, measured by agricultural net income per day, with increments of CNY 2.09 and 11.15, respectively. ICTs also decreased farmers’ grain production, production cost, fertilizer use, and increased grain productivity. Furthermore, ICTs exhibited a spill-over effect, with non-users in Internet-connected villages demonstrating higher labour productivity compared to those in villages without Internet access. These results imply that agricultural labour productivity can be enhanced by employing ICTs for China and countries with small-scale farms. Nonetheless, greater attention should be paid to the potential trade-offs between the income growth facilitated by ICTs in rural out-migration and the decline in agricultural income and grain production.

Agricultural production strategies: world experience

Governments pursue two major kinds of policies that affect agricultural production and incomes. First, they control the domestic prices of agricultural commodities, which cause movements along agricultural supply curves. Second, they invest in agricultural research, education, and transportation systems, which shift agricultural supply curves over time. The first will be called 'commodity' policies and the second, 'development' policies. Positive policies of either type can increase agricultural production and, given input prices, agricultural incomes, but the means of achieving such increases, as Ricardo ( 1970 [ 1821 ], p. 79) pointed out more than 160 years ago, greatly affect the overall rate of economic development in less developed countries. This paper examines these two types of policies in the case of four countries in East Africa. Kenya, Malawi, Tanzania, and Zambia are all former British colonies that became independent between 1961 and 1964. Owing to their common geographical and historical legacy, they have similar economic and institutional structures, including their governments' interventions in domestic food grain markets. All have been blessed with stable government since independence and considerable continuity in economic policy. The four countries are an economic laboratory for studying the impact of agricultural commodity and development policies. Between 1964 and 1978which excludes the effects of the most recent drought to hit the region, beginning in 1979real GDP grew faster in Kenya and Malawi than in Tanzania and Zambia (see Table 1.) Real GDP per caput also grew faster in Kenya and Malawi. But a more striking difference between the two groups of countries is that while real private consumption per caput grew in Kenya and Malawi, it actually declined in Tanzania and Zambia. Not only did real GDP per caput grow more slowly in Tanzania and Zambia, but also government consumption grew more quickly than in Kenya and Malawi. In all four countries, real growth in GDP has been associated with a declining share of agricultural production (see Table 2). But in Kenya and

Using typical counties in the Yimeng Mountain area of northern China as an example, this paper analyzed the household and agricultural input characteristics of different types of peasant households using survey data from 262 farm households. The target minimization of the total absolute deviations (MOTAD) model was applied to determine the optimal combinations in the allocation of agricultural input factors and production for different types of at-risk peasant households to obtain the ideal agricultural income. The relevant results are twofold. (1) The agricultural input behaviors of different types of peasant households vary significantly. The highest levels of agricultural land, labor, and yield-increasing and labor-saving inputs included I part-time peasant households (I PTPH), followed by full-time peasant households (FTPH), while the input levels of II part-time peasant households (II PTPH) and non-agricultural peasant households (NAPH) with higher levels of non-agricultural employment gradually decreased. In general, an increase in peasant households’ part-time employment revealed an inverted U-shaped trend in the agricultural input level, with a trajectory of I PTPH > FTPH > II PTPH > NAPH. (2) The current agricultural inputs and production combinations of different types of peasant households have room for improvement. It is necessary to adjust agricultural inputs and optimize production combinations to obtain target incomes. Overall, all types of peasant households must streamline labor inputs and increase capital inputs, except for I PTPH, for which capital inputs should be reduced. Following optimization, economic crops gradually replace grain crops, and the optimal agricultural incomes of peasant households will be improved. The study results provide practical policy insights for reducing agricultural production risks and improving agricultural production incomes.

A salient theme in D. Gale Johnson’s work is the importance of agricultural development for general prosperity and for economic diversification (e.g., Johnson 2000). Johnson has also noted that most of the world’s poor are engaged in farming, so that a key focus of development policy is to raise the incomes of farmers. From a global perspective, increasing the productivity of agriculture, given the fixity of land, is necessary for both poverty reduction and the development of the nonagricultural sector. At the level of the world, agricultural productivity gains, poverty reduction, and the growth of the nonfarm sector are complements. However, the question remains whether these observations imply that every poor country should focus its public resources on agricultural development in order to raise the incomes of people now engaged in farming and whether such a policy is necessary for obtaining economic diversity. In this article, we use the experience of India over the past 30 years to address the issue of whether agricultural technical change actually leads to economic diversification and income growth within the rural sector in the context of an open-economy country in which there are cross-area trade and capital flows. We focus in particular on the rural sector because this is the sector in which linkages between agricultural and nonagricultural sectors are thought to be the strongest. We exploit the fact that India has maintained a policy of openness with respect to agricultural technology over this period, permitting and actively supporting agricultural development, and has moved to a reformed regime in which goods are traded and capital is more mobile in the 1990s. Evidence on the relationship between agricultural growth and nonfarm

Elwady Elgedid considered as a promising Governorate in the field of sustainable agricultural development. This research aims to identify the current situation of agricultural plant production, crop composition, as well as crop yield, Agricultural Animal Production and the change in the number of cattle. The future prospects of agricultural production are also estimated. Proposals and recommendations on how to exploit the available optimum utilization of agricultural resources are also stated. The results showed that the average crop area, the value of agricultural production, the agricultural income and agricultural employment of Elwady Elgedid Governorate represents about 1.3%, 0.4%, 0.05%, 0.12% 0.12%, of the total crop area, agricultural production value, the value of production inputs, agricultural income value, the number of agricultural workers of the Republic. Results also showed that wheat crop area and ​​production represents about 1.9% 1.5% of the area and production of wheat crop in the Republic. The area and production of faba bean crop represents about 4.9% to 4.3% of the area and ​​production of faba bean crop in the Republic. The area and production of the winter tomato crop represents about 1.4% 1.8% of the area and production of the winter tomato crop in the Republic. While the area and production of alfalfa represents about 65.8%, 65.8% of the area and the production of alfalfa in the Republic as an average of the period, while the area and the production of sesame crop represents about 0.49%, 0.36% of the area and production of sesame crop in the Republic as an average of the period. The area and production of maize represent around 0.34%, 0.07% of the area and production of maize crop in the Republic as an average of the period. For Animal Production, numbers of cattle buffalo, sheep, goats, camels, representing about 2.6%, 1.3%, 0.97%, respectively of the total number in the Republic. By studying the expectation of future agricultural production in Elwady Elgedid Governorate years 2015, 2016 and 2017 showed the following: The crop area, agricultural production, agricultural production inputs, agricultural income and agricultural workers will increase with an increase estimated at 1.05%, 3.1%, 3.3%, 3.5%, 0.07% respectively out of 2014, and the area of wheat, bean and alfalfa, will increase by 2.1%, 70.8%, 0.09% Respectively from 2014, while summer sesame area will fall by 55.2% from 2014. The expectation for the future productivity of bean, and winter tomatoes will rise by 5.7%, 14.9% respectively from 2014, while the maize, summer sesame and alfalfa production will drop by 0.3%, 5.9%, and 5.2% from 2014. Forecasting the future of summer bean production will rise by 44.5% from 2014, while summer sesame, tomato and alfalfa production will fall by 70.13%, 1.4%, 5.3 respectively out of 2014.While forecasting the future number of, sheep, goats will rise by 0.55%, 0.06% respectively while the number of cows, buffalo, and camels will go down by 1.9%, 9.1%,1.3% from 2014. The research recommends dissemination crops appropriate to soil conditions and the environment in all varieties preservation area, and creates herd's nucleus for each of goats, cows and sheep, in the form of model farms.