Study shows impact of rural credit on Agricultural GDP in Matopiba

What is the impact of granting rural credit on wages, employment and agricultural GDP? A study by Embrapa Territorial evaluated the relationship between these four variables in the period from 2013 to 2017, in the Matopiba region, an agricultural frontier area that comprises parts of Maranhão, Tocantins, Piauí and Bahia. The results of the analyzes indicate that both variations in rural credit and levels of wages and employment in agriculture have a positive effect on the sector's GDP in the municipalities studied. 

Another variable that can be positively impacted is the level of wages, which grows as GDP and employment levels improve. Rural credit and employment levels were, in turn, less susceptible to changes in the opposite direction, that is, no capacity for GDP variations to impact these two variables was observed. 

Attention is drawn to the high impact of the increase in the volume of credit on Agricultural GDP in a group of 17 municipalities located between the West of Bahia, the South of Maranhão and the Southwest of Piauí. Analyst Daniela Tatiane de Souza, from Embrapa Territorial, assesses that rural credit improves the production structure and, consequently, the producer's profits, which tends to encourage an increase in Agricultural GDP. 

Publication

The research employed a methodology that uses data panels to investigate the existence and impact of relationships between variables, previously little used for regional assessments. The result obtained by the authors is in a scientific article presented at the 50th National Economics Meeting, promoted by the National Association of Postgraduate Centers in Economics (Anpec).

An exercise was also carried out to evaluate the impulse response. For example, in a stability scenario, what would happen, over a period of 10 years, if there was an improvement in one of the variables. The level of economic activity, for example, would be positively impacted by the increase in the levels of wages, employment and rural credit.

For Souza, the research carried out shows the potential of the methodology to understand the relationships between economic indicators at a regional level. It can be used, for example, to think about strategies to stimulate the labor market in agriculture, as well as the role of rural credit in public policies.

GeoMatopiba

The work was inspired by and used data from a data platform about Matopiba launched by Embrapa Territorial in 2020, the GeoMatopiba. Available free online, it is made up of interactive panels with data from the 337 municipalities that make up the region, on formal jobs, rural credit and agricultural production, in addition to Embrapa technologies available for the region. The information is geospatial and is presented in maps, graphs and tables, with the possibility of downloading. 

To read the article, click here.