The end of five decades of taxation of agriculture in Brazil

Abstract

The underlying scenario of the perspectives of changes made to the agricultural policies of the United States of America and the European Union are the financial crisis that have impacted the two largest producers of agricultural products in the world. The time of tax restrictions is here, which should have repercussions on the allocation of agricultural subsidies. This measure should open new and good growth perspectives for Brazilian agriculture. As well as the perspectives of subsidy changes, there are yet undeniable opportunities in the world market. However, if Brazilian agriculture is to benefit from market opportunities, it is necessary for all policies that distort economic production incentives to be eliminated. At the time when the 150th anniversary of the Ministry of Agriculture, Livestock and Food Supply is being celebrated, it is interesting to measure the effects of the changes made to macroeconomic policies and the sectorial policy over the last five decades. In particular, the events that have taken place over the last decade in terms of reduction of the levels of protection and taxation of agricultural products should be addressed, compared to industrial products. In other words, it is our intention to understand to what extent Brazilian agricultural policies prepare the agricultural sector to compete in world-markets.