Effects of a fertilizer subsidy on Brazilian crop production and exports
1983
Hall, H.H. | Stulp, V.J. | Reed, M.R.
Extract: The portfolio-analysis of representative farms in this study shows that low fertilizer prices stimulate the production of wheat and soybeans and reduce the production of corn in Brazil, and that high fertilizer prices have the opposite effect. Since Brazil imports much of its fertilizer, a public subsidy is one way to reduce the price of fertilizer to farmers. The results further show that increased net exports that would result from lower fertilizer prices would exceed the direct cost of such a subsidy. Consequently, a fertilizer subsidy appears to be one way for Brazil to improve its foreign-exchange position.
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