Rural credit in Brazil: access, average value and impacts

Abstract

This article investigates the effects of rural credit on the performance of Brazilian agriculture based on two dimensions: access to credit and the average amount contracted. Using municipal-level data from the 2017 Agricultural Census and the Rural Credit Data Matrix of the Central Bank of Brazil, and applying Entropy Balancing and Weighted Least Squares methods, the analysis focuses on the impacts on partial productivity of labor and land, gross production value (GPV), and profitability. The results indicate that both access to credit and the average contract value have positive effects on these performance indicators, especially on GPV, profitability, and labor productivity. However, the impacts vary depending on the dimension considered: access to credit tends to produce broader and more evenly distributed effects across municipalities, while higher average credit values generate more concentrated impacts, suggesting possible increasing returns to scale. Thus, public policies that integrate rural credit with technical assistance, extension services, and market access may enhance the effectiveness of credit instruments, even in smaller contracts, promoting greater regional equity and productive efficiency.