Agribusiness: Relative prices and inflation

Abstract

This article sought to answer the following questions, focusing on the period from 2000 to 2019: (i) how much has the market stimulated or discouraged agricultural producers? (ii) what is the impact of agricultural prices on consumer prices? First, different relative price indicators were calculated, both from the perspective of product prices, defining Relative Prices/Prices (PR-P), as well as from the joint perspective of product and input prices, defining the Relative Price/Deflators (PR-D) - which compares the GDP deflators of agriculture and the economy as a whole. Then, descriptive data analysis techniques were used to explore the behavior of these indicators and their relationship with the IPCA. Among the main results, it was found that, from 2000 to 2019, the prices of agricultural and industrial products followed similar trends, although the former systematically demonstrated a much greater variability. However, it was also found that the PR-P analysis underestimates the disadvantage of agriculture in relation to the entire economy, since, from the point of view of product and input prices, there was a 25% drop in the PR-D between 2000 and 2000. 2018. As for consumer prices, the weight of food in the IPCA increased from 2006, but this increase cannot be justified in the prices relative to the agricultural producer.