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Wheat policy and economy‐wide reform in Brazil
Author(s) -
Silva Orlando Monteiro da,
Grennes Thomas
Publication year - 1999
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/j.1574-0862.1999.tb00560.x
Subject(s) - subsidy , stimulus (psychology) , economics , welfare , stabilization policy , public policy , agricultural economics , economic policy , international economics , monetary policy , market economy , monetary economics , economic growth , psychotherapist , psychology
In recent years, the wheat sector in Brazil has moved from governmental protection and public intervention to a free market and privatization. In this study, those changes are analyzed through measures of governmental intervention on nominal rates of protection and on welfare of producers and consumers. Elasticities of demand and supply of wheat are estimated, and the effects of changes in policies are analyzed under official and shadow exchange rates. Welfare measures indicate that almost US$ 8 billion were spent from 1970 until 1989 with policies to subsidize producers and consumers. The policy‐induced stimulus to consumer demand exceeded the stimulus to domestic production, and self sufficiency in wheat declined. The reduction in wheat subsidies since 1989 was more than an isolated sector‐specific policy. It was part of macroeconomic antiinflation policy, and it coincided with other economy‐wide changes such as real appreciation and a decline in international commodity prices.