Climate effects and technical progress: an analysis for the Brazilian agriculture.
Agricultural productivity; drought index, climate anomaly; technical progress; Brazilian agriculture; fixed effects panel, translog.
This thesis aims to incorporate the effects of climate variations in the measure of technical progress in the Brazilian agriculture. Technical progress is represented as a residual and is interpreted as the portion of growth in agricultural output that is not explained by the increase in the quantity of inputs used. Adding the climate dimension to this analysis expands the sources of production growth and the development of a more complete measure of productivity. For this, a flexible translog production function was estimated, using a fixed effects panel techniques, for the Brazilian agriculture, at micro-region level, covering the last three Agricultural Censuses of the years 1995, 2006 and 2017. A period when Brazil consolidates its position as a world player in food production. The climate dimension was added in the form of a climate anomaly, specified by means of a drought indicator, expressing short-term climate variations relevant to the Brazilian agriculture. Results of estimating the production function without the climate variable show an annual average of technical progress equal to 1.4%, with elasticities of production factors consistent with the Brazilian agriculture growth trajectory. The estimation of the production function with the inclusion of the drought indicator had an expected negative and statistically significant effect on the Brazilian agricultural product. The elasticities of production factors remained consistent with the sector's growth trajectory. Technical progress accounted for climate increased to 1.8%. This evidence suggests that efforts to eliminate the residue not explained by growth in inputs are important for obtaining a more accurate measure of technical change, allowing a better understanding of the determinants of growth in this important sector.