Determinants of Agricultural Expansion in the North and Northeast of Brazil

The agricultural sector is indispensable for the development of the Brazilian economy and has shown itself to be dynamic in terms of its expansion and modernization process, with Brazil being one of the few countries with the possibility of expanding its agricultural production frontier by incorporating new areas. This process continues and is concentrated in the North and Northeast regions. In this process, the farmer is the agent capable of carrying out the new combinations that result in innovations. In order to analyze the expansion of the production frontier of rice, corn and soybean crops in the North and Northeast from 1999 to 2012, an econometric model estimated using the panel data technique was used. The estimated equation found that 81.95% of the harvested area of rice, corn and soybean crops in the North and Northeast is explained by rural credit, the Gross Value Added of agriculture, commodity prices, the number of employees in the agricultural sector, the number of establishments in the agricultural sector, the number of tractors sold and agribusiness exports, with the states of Bahia, Maranhao, Para, Piaui and Tocantins having the greatest production and impact in the region.