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ENHANCINGBRAZIL’S

AGRICULTURESUPPORT:

POLICIESFORACOMPETITIVE,GREEN,ANDINCLUSIVE

AGRIFOODSECTOR

MariePaviot,HectorPe?a,MaurodelGrossi,ElenaMoraLópez,

MaríaFlorenciaTejeda,VictoriaTraverso,BeatrizGarcia,LuisaLeite

2025

?2025TheWorldBank

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Attribution

Pleasecitethisworkasfollows:

WorldBank.2025.EnhancingS?oPaulo’sAgricultureSupport:PoliciesforaCompetitive,

Green,andInclusiveAgrifoodSector.Paviot,M.,Pe?a,H.,delGrossi,M.,MoraLópez,E.,Tejeda,M.F.,Traverso,V.,GarciaFerreira,B.M.,Leite,L.WorldBank:Washington,DC.

Anyqueriesonrightsandlicenses,includingsubsidiaryrights,shouldbeaddressedto:WorldBankPublications,TheWorldBankGroup,1818HStreetNW,Washington,DC20433,USA;fax:202-522-2625;e-mail:pubrights@

ENHANCINGBRAZIL’S

AGRICULTURESUPPORT:

POLICIESFORACOMPETITIVE,GREEN,ANDINCLUSIVE

AGRIFOODSECTOR

MariePaviot,HectorPe?a,MaurodelGrossi,ElenaMoraLópez,

MaríaFlorenciaTejeda,VictoriaTraverso,BeatrizGarcia,LuisaLeite

2025

TABLEOFCONTENTS

ACKNOWLEDGEMENTS11

ACRONYMS12

1.INTRODUCTION14

2.ECONOMICPERFORMANCEOFTHEAGRICULTURAL

SECTOR(BRAZILANDS?OPAULO)16

2.1GrossDomesticProductBrazil16

2.2ValueAddedandContributiontoGDPbyEconomicSector17

2.3ContributiontoGDPbyState19

2.4Externaltrade19

2.5NationalConsumerPriceIndex24

2.6S?oPaulo25

2.6.1StateGrossDomesticProduct25

2.6.2ValueAddedandContributiontoGDPbyEconomicSector26

3.EVALUATIONOFAGRICULTURALSUPPORT

INS?OPAULO(2017-2021)28

3.1Methodology28

3.2ProducerSupportEstimates(PSE)33

3.2.1LevelofSupport33

3.2.2CompositionandStructureoftheProducer

SupportEstimate(PSE)bySupportCategory35

3.2.3AnalysisofProducerSupportbyProduct38

3.3ConsumerSupportEstimate(CSE)39

3.3.1StructureoftheConsumerSupportEstimate(CSE)40

3.3.2EstimatedConsumerSupportbyProduct40

3.4GeneralServiceSupportEstimates(GSSE)41

3.5TotalAgriculturalSupportEstimates(TSE)45

3.6SourcesofFundingforSupportinS?oPaulo47

3.7EnvironmentalImpactofSupportto

theAgriculturalSectorinS?oPaulo48

4.SUMMARYANDRECOMMENDATIONS51

REFERENCES55

ANNEX1.SECTORSUPPORTESTIMATE,S?OPAULO2017-202156

ANNEX2.STATEPUBLICBUDGET.S?OPAULOPROGRAMS59

ANNEX3.BUDGETEXERCISEDBYS?OPAULOSTATEPROGRAM

(OTHERDIRECTSUPPORT)66

ANNEX4.BUDGETEXERCISEDFORCONSUMPTION

SUBSIDIESOFTHESTATEOFS?OPAULO74

FIGURES

FIGURE1.17

ANNUALCHANGEINGDPS

FIGURE218

ANNUALVARIATIONINVALUEADDEDBYECONOMICSECTOR(2011-2020)

FIGURE3.18

COMPOSITIONOFBRAZIL’SGROSSDOMESTICPRODUCT:2011VS2021

FIGURE419

STATESHAREOFTOTALGDP:2011VS2020

FIGURE520

BRAZIL’SFOREIGNTRADE(MILLIONUSD)

FIGURE620

BRAZILEXPORTSBYECONOMICACTIVITY

FIGURE721

EXPORTSOFMAINPRODUCTS(SHAREOFVALUEOFTOTALEXPORTS)

FIGURE822

AGRICULTURALSECTOREXPORTS,2022-100%=$74.787MILLION

FIGURE923

TOTALEXPORTSBYCOUNTRYOFDESTINATION

FIGURE1025

ANNUALVARIATIONOFTHENATIONALCONSUMERPRICEINDEX(INPC)

2017–MAY2023

FIGURE1125

ANNUALVARIATIONOFGDP

FIGURE1226

ANNUALVARIATIONINVALUEADDEDBYECONOMICSECTORIN

S?OPAULO:2011–2020

FIGURE1327

COMPOSITIONOFS?OPAULOGROSSDOMESTICPRODUCT:2011VS2021

FIGURE1427S?OPAULO:SECTORALBREAKDOWNOFGHGEMISSIONS

FIGURE1530SCHEMEOFTRANSFERSASSOCIATEDWITHTHEIMPLEMENTATIONOF

AGRICULTURALPOLICIES

FIGURE1634S?OPAULOPRODUCERSUPPORTESTIMATEASAPROPORTION

OFTOTALINCOME(PSE%)

FIGURE1734BENCHMARKINGPSE%-2017-2021

FIGURE1838%PSEBYPRODUCTINS?OPAULO(AVERAGE2017-2021)

FIGURE19.40S?OPAULOPERCENTAGEOFCONSUMERSUPPORTESTIMATE(%CSE)

FIGURE2043BENCHMARKINGGSSEASPROPORTIONOFAGRICULTURALGDP–

AVERAGE2017-2021

FIGURE2144BENCHMARKINGTHECOMPOSITIONOFTHEGSSE

FIGURE2245S?OPAULO,COMPOSITIONOFTSE

FIGURE2346S?OPAULOTOTALSUPPORTESTIMATEINMILLIONR$ANDAS

PROPORTIONOFAGGDP

FIGURE2446BENCHMARKINGTSEASSHAREOFAGGDP

FIGURE2548BENCHMARKINGTSEBYSOURCEOFFUNDINGS

TABLES

TABLE1.24EXPORTSBYSTATE(100%=$334.136MILLION)SOURCE:MINISTRYOFDEVELOPMENT,

INDUSTRY,TRADEANDSERVICES/MINISTRYOFFOREIGNTRADE(BRAZIL).

TABLE2.36

STRUCTUREANDCOMPOSITIONOFPSES?OPAULO(AVERAGE2017-2021)

TABLE337STRUCTUREANDCOMPOSITIONOFPSE.BAHIA,SANTACATARINA,

S?OPAULOANDOECD(AVERAGE2017-2021)

TABLE439

%PSEPERPRODUCTPERYEAR

TABLE541

%CSEBYPRODUCTINS?OPAULO(2017-2021)

TABLE6.42

S?OPAULO,GSSE

TABLE754AREASOFREFORMSFORACOMPETITIVE,GREEN,RESILIENT

--ANDINCLUSIVEAGRICULTURESECTORINS?OPAULO

BOXES

BOX129OECDINDICATORSOFSUPPORTFORAGRICULTURE

BOX231APPROACHTOTSEFORS?OPAULO

P

ACKNOWLEDGEMENTS11

ACKNOWLEDGEMENTS

ThisreportwaspreparedbyaWorldBankteamledbyMariePaviot(Senior

AgricultureEconomist,WorldBank),andincludingElenaMoraLópez(AgricultureEconomist,WorldBank),MaríaFlorenciaTejeda(AgricultureEconomist,World

Bank),VictoriaTraverso(AgricultureAnalyst,WorldBank),BeatrizGarcia(Intern,WorldBank),HectorPe?a(Consultant),MaurodelGrossi(Consultant),LuisaLeite(Intern,WorldBank).

TheteamisgratefulfortheguidanceandsupportreceivedfromDiegoArias

(PracticeManager,WorldBank),EliWeiss(ProgramLeader,WorldBank),EdwardBresnyan(LeadAgricultureEconomist,WorldBank),SergiyZorya(LeadAgricultureEconomist,WorldBank),SvetlanaEdmeades(LeadAgricultureEconomist,World

Bank),VaninaDaphneForget(SeniorAgricultureEconomist,WorldBank)and

PaolodeSalvo(SeniorSectorSpecialistforRuralDevelopment,Inter-AmericanDevelopmentBank),BarbaraFarinelli(SeniorAgricultureEconomist,WorldBank),EirivelthonSantosLima(SeniorAgricultureEconomist,WorldBank),Leonardo

Bichara(SeniorAgricultureEconomist,WorldBank).

TheteamexpressesitsgratitudeforlogisticalandadministrativesupportfromKayoBarbosa(TeamAssistant,WorldBank).

12

ACRONYMS

AAGR

AverageAnnualGrowthRate

ABC

LowCarbonAgriculture–AgriculturadeBaixoCarbono

AgGDP

AgriculturalGrossDomesticProduct

APP

AreaofPermanentPreservation-AreadePreserva??oPermanente

BNDES

BrazilianNationalDevelopmentBank–Banco

NacionaldeDesenvolvimentoEconomicoeSocial

CAR

RuralEnvironmentalCadaster–CadastroAmbientalRural

CNPA

NationalAgriculturalPolicyCouncil–ConselhoNacionaldePolíticaAgrícola

CSE

ConsumerSupportEstimate

EMBRAPA

BrazilianAgriculturalResearchCorporation-EmpresaBrasileiradePesquisaAgropecuaria

GDP

GrossDomesticProduct

GHG

GreenhouseGas

GRID

Green,ResilientandInclusiveDevelopment

GSSE

GeneralServicesSupportEstimate

IBGE

BrazilianInstituteofGeographyandStatistics-InstitutoBrasileirodeGeografiaeEstadistica

LAC

LatinAmericaandCaribbean

LCA

AgriculturalCreditNotes–LetrasdeCréditodoAgronegocio

LPI

LogisticsPerformanceIndex

MAPA

MinistryofAgricultureandLivestock–MinisteriodeAgriculturaePecuaria

MPS

MarketPriceSupport

13

NDC

NationallyDeterminedContribution

NPC

NominalProtectionCoefficient

OECD

OrganizationforEconomic

CooperationandDevelopment

PGPM

MinimumPriceGuaranteePolicy

PNCPD

NationalProgramforConversionofDegraded

PasturestoSustainableAgrifoodProductive

Systems-ProgramaNacionaldeConvers?ode

PastagensDegradadasemSistemasdeProdu??oAgropecuárioseFlorestaisSustentáveis

PPCDAm

PlanforthePreventionandControlofDeforestationintheLegalAmazon

PPP

PurchasingPowerParity

PROAGRO

AgriculturalActivityGuaranteeProgram

PSE

ProducerSupportEstimate

PSR

PremiumSubsidyProgram

R&D

ResearchandDevelopment

RL

LegalReserve-ReservaLegal

SCT

SingleCommodityTransfer

SICAR

NationalElectronicSystemforRuralEnvironmentalCadaster–Sistema

NacionaldeCadastroAmbientalRural

SNCR

NationalRuralCreditSystem–SistemaNacionaldeCréditoRural

TFP

TotalFactorProductivity

TSE

TotalSupportEstimate

PRONAF

NationalProgramtoStrengthenFamilyFarming–ProgramaNacionalde

FortalecimentodaAgriculturaFamiliar

e

B

e

B

B

1.INTRODUCTION

1.Therearevariouseffortstoconductcomprehensiveassessmentsof

agriculturalpoliciesincountriesaroundtheworld.Withtheuseof

variousmethodologies,theworkofinternationalbodiessuchastheFoodandAgricultureOrganizationoftheUnitedNations(FAO),theWorld

TradeOrganization(WTO),theInternationalFoodandPolicyResearchInstitute(IFPRI),andtheOrganizationforEconomicCooperationandDevelopment(OECD)havecarriedoutseveraleffortstowardsthisgoal.

2.InthecaseoftheOECD,itsmethodology(designedinthe1970sand

firstappliedinthe1980s)hasbeenadaptedandconsolidatedasan

effectivetoolforpolicymonitoringandevaluation.Inpracticalterms,

ithasfrequentlybeenusedasareferenceforestablishingadialogue

atthenationalandinternationallevels.Itsstandardcharacterallows

comparisonsbetweencountries,economiesorovertime;highlightingtheimpactofpoliciesonthegrossincomeofbothconsumersandproducers.

3.Importantly,theOECDmethodologyestimatesthevalueofmonetarytransfersmadebytaxpayersandconsumerstoagricultural

producers.Initsdefinition,thetransfersgeneratedasaresultof

theimplementationofagriculturalpoliciesareconsidered.Basedonthis,itispossibletoobserve,aspartofitsindicators,theimportanceofthesetransfersinthetotalgrossincomeofproducers.

4.Themethodologyconsidersfourbasicindicatorsto

determinetheamountoftransferstotheagriculturalsector

andtotheconsumerofagriculturalproducts:

INTRODUCTION15

a.TotalSupportEstimates(TSE).Quantifies,inmonetary

terms,theimpactofallpoliciesandthesectorasawhole.

b.ProducerSupportEstimates(PSE):Quantifiesthetotaltransferstotheproducerresultingfromtheimplementationofagriculturalpoliciesaimedataspecificproductorgroupofproducts.

c.ProducerSupportEstimatesasapercentageofgrossincome

(PSE%):Estimatestheimpactofestimatedtransfersasa

proportionofthegrossincomeoftheproducerunderanalysis.

d.ConsumerSupportEstimates(CSE):Quantifiestheimpactof

agriculturalpoliciesondomesticconsumersoronaparticularproduct.

5.Oneoftheobjectivesofthisanalysisistoquantifytheimpactofthe

agriculturalpoliciesofthestategovernmentofS?oPauloonproducers,

consumers,andthesectorasawholebasedonthetransfersthatthese

policiesgenerate,thus,inthisanalysistheresultobtainedwillonlyreflect

thetransfersderivedfromtheimplementationofagriculturalpoliciesofthe

governmentofthestateofS?oPaulo.Inthissense,thetransfersderivedfromtheimplementationofnationalpoliciesarenotconsideredinthisexerciseandinanycase.Duringtheanalysis,theamountofthesetransfersisestimated,aswellastheirimportancewithintheproducer’sgrossincome,whichfacilitates.1

6.Theanalysisconsiderstheperiod2017-2021,whichisrelevant

consideringthevariouseventsthataffectedthesectorduringthat

period,suchasthepresenceoftheglobalpandemicandafoodprice

crisis.Basedontheresultsobtained,recommendationsforrepurposingpublicpoliciesandprogramstofosteracompetitive,greenandresilientgrowthofthesectorhavebeenformulatedinthefinalsection.

1TheOECDannuallyestimatesthetransfersderivedfromtheimplementationofnational

governmentpolicies,consideringBrazilasanon-membercountry.TheirresultsarepublishedontheOrganization’swebsite.

2.ECONOMICPERFORMANCEOF

THEAGRICULTURALSECTOR(BRAZILANDS?OPAULO)

2.1GrossDomesticProductBrazil

7.Thepaceofgrowthofthecountry’seconomyhasslowedoverthepasttenyears.AccordingtodatafromtheBrazilianInstituteofGeographyandStatistics(IBGE),in2020theGrossDomesticProduct(GDP)

wasrecordedat7,6trillionreais,whichrepresentedanannualgrowthof3.0percentoverthepreviousyearwhichmeantadecreaseof9.6p.p.comparedtotheannualgrowthof12.6percentrecordedin2011whenGDPstoodat3,885,847.00millionreais.Forthatperiod,the

AverageAnnualGrowthRate(AAGR)ofGDPstoodat5.7percent.

8.Itisimportanttonotethat,during2020,thepandemicandthe

confinementandsocialdistancingmeasurestocontainthespread

ofthevirussignificantlyaffectedtheeconomicactivity,resultingin

challengesforwhichthecountryimplementedaseriesofmeasuressuchasdirectcashtransfers,supportforsmallandmedium-sizedenterprises,postponementofthepaymentofcertaintaxes,amongothers.

ECONOMICPERFORMANCEOFTHEAGRICULTURALSECTOR(BRAZILANDS?OPAULO)17

FIGURE1.

AnnualchangeinGDP

(Source:IBGE)

12.6%

10.0%

10.7%

8.4%

6.4%

AAGR

5.7%

5.5%

3.0%

4.6%5.0%3.8%

2011201220132014201520162017201820192020

2.2ValueAddedandContributiontoGDPbyEconomicSector

9.DespitethedecreaseinGDPgrowthinrecentyears,thevalueaddedof

agriculturalproductionhashadthegreatestdynamismamongsectors.In

2020,theannualvariationinAgriculturalValueAddedwasrecordedat39.9percent,whichimpliedanincreaseof21.1p.p.comparedto2011.Fortheperiodfrom2011to2020,theagriculturalsectorpresentedaCAGRof8.6percent.

10.During2020,ayearinwhichtherewaslowgrowthoftheeconomyingeneralduetotheeffectsofCOVID-19,theagriculturalsectorshowedresilience

beinganimportantenginefordevelopment,providingfoodsecuritywith

recordproductionsincropssuchascornandsoybeansandrecordedsolid

exports.AccordingtodatafromtheMinistryofForeignTrade(Brazil),

agriculturalexportsgrewby4.9percentin2020comparedtothoseobservedin2019,whileexportscorrespondingtotheprocessingandextractive

industriesdecreasedby9.7percentand3.0percent,respectively.

18

ENHANCINGBRAZIL’SAGRICULTURESUPPORT:

PoliciesforaCompetitive,Green,andInclusiveAgrifoodSector

FIGURE2.

AnnualVariationinValueAddedbyEconomicSector(2011-2020)

(SourceIBGE)

40.0%

35.0%

30.0%

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%

-5.0%

-10.0%

39.9%

18,8%

2011201220132014201520162017201820192020

uAgriculturaluIndustryServicesuAdministrationaTaxes

11.Inaddition,theagriculturalsectorhasincreaseditsparticipationinthetotaleconomy.In2020,theagriculturalsectorcontributed5.7percentoftheTotalGDP,whichimpliedanincreaseinthesector’sshareof1.6p.p.aftertenyears,onlybehindthecontributionoftheservicesector,whichincreasedby2.6p.p.forthesameperiod.

FIGURE3.

CompositionofBrazil’sGrossDomesticProduct:2011vs2021

(Source:IBGE)

CompositionofBrazil’sGDP:2011CompositionofBrazil’sGDP:2020

Agricultural4.1%Industry23.3%

Services43.8%

Administration13.8%Taxes15.0%

Agricultural5.7%

Industry19.5%

Services46.4%

Administration15.1%Taxes13.3%

ECONOMICPERFORMANCEOFTHEAGRICULTURALSECTOR(BRAZILANDS?OPAULO)19

2.3ContributiontoGDPbyState

12.AlthoughtheGDPshareoftheStateofS?oPaulointhetotaleconomy

hasdecreasedinrecentyears,itremainssignificantandthemost

importantinthecountry.During2020,theStateofS?oPaulocontributed

31.2percentoftotalGDP,adropof1.6p.p.fromthe2011record.

FIGURE4.

StateShareofTotalGDP:2011vs2020

(SourceIBGE)

ShareoftheStateofS?oPaulointheNationalGDP:2011

S?oPaulo32.8%Others67.2%

2.4Externaltrade

ShareoftheStateofS?oPaulointheNationalGDP:2020

S?oPaulo31.2%Others68.8%

13.Brazil’stradebalanceishistoricallyinsurplus,however,inrecentyears

importshaverecordedahigherrateofgrowththanexports.Between2017and2022,exportsregisteredanAverageAnnualGrowthRate(AAGR)of9.2percent,whiletheaveragegrowthofimportswas11.4percent.In2022,thetradebalancestoodat61.525milliondollars,theresultofatotalamountof

334.136milliondollarsofexportsand272.611milliondollarsofimports.

20

ENHANCINGBRAZIL’SAGRICULTURESUPPORT:

PoliciesforaCompetitive,Green,andInclusiveAgrifoodSector

FIGURE5.

Brazil’sforeigntrade(MillionUSD)

(Source:MinistryofDevelopment,Industry,TradeandServices/MinistryofTrade(Brazil).

.br/produtividade-e-commerce-exterior/pt-br/assuntos/commerce-exterior/estatisticas

)

400,000

300,000

200,000

100,000

0

201720182019202020212022

ExportsImports

14.Bytheendof2022,themaineconomicexportactivitywasthe

processingindustry,witha54.3percentshareofthetotalvalueexportedinthatyear,followedbytheextractiveindustrywith22.8percent

andagriculturalactivitywith22.4percent.Itshouldbenotedthattheprocessingindustry,asthemainexportactivity,isstronglydrivenbytheexportofagri-food,whichaccountsforalmostathirdofthissector.

FIGURE6.

Brazilexportsbyeconomicactivity(MUSD)

(Source:MinistryofDevelopment,Industry,TradeandServices/MinistryofTrade(Brazil).

.br/produtividade-e-commerce-exterior/pt-br/assuntos/commerce-exterior/estatisticas

)

ProcessingIndustry

Agrifood31%Others69%

Agriculture22.4%

ExtractiveIndustry22.8%ProcessingIndustry54.3%Others0.5%

ECONOMICPERFORMANCEOFTHEAGRICULTURALSECTOR(BRAZILANDS?OPAULO)21

15.Themainexportproducts,accordingto2022figures,weresoybeans,crudeoil,andironore,withsharesoftotalexportsof13.9percent,12.7percentand8.7percent,respectively,registeringaveragegrowthratesof12.6percent,20.7

percent,and8.5percent,respectively.Inaddition,10ofthe22mainproductsexportedcomefromtheprocessingindustry,7ofwhichareagri-food.

FIGURE7.

Exportsofmainproducts(Shareofvalueoftotalexports)

(Source:MinistryofDevelopment,Industry,TradeandServices/MinistryofTrade(Brazil).

.br/produtividade-e-commerce-exterior/pt-br/assuntos/commerce-exterior/estatisticas

)2017

Soy12%

Ironores9%

Crudepetroleumoils8%Sugar5%

Passengermotorvehicles3%Soy?our3%

Beef2%

Cellulose3%Co?ee2%

Fueloils1%Birdmeat3%

Ungroundcorn2%Semi-products

2022

Soy13