Agricultural output in São Paulo State grew more than 90% in last two decades

Study shows that investment in research, expansion of mechanization and focus on production of commodities were some of the factors that contributed to this leap.

By Elton Alisson and José Tadeu Arantes  |  Agência FAPESP – Agricultural output in São Paulo State, Brazil, grew 90.4% between 1990 and 2012, with average growth of 3.1% per year.

The drivers of this growth included investment in agrarian science research by institutions like FAPESP, resulting in increased crop yields; expanding mechanization; and concentration on the production of commodities such as sugarcane and oranges.

These are some of the findings reported in the study “FAPESP’s contribution to the development of agriculture in São Paulo State”, supported by FAPESP.

“Our study shows that agriculture in São Paulo is more efficient than in the rest of Brazil and that agricultural workers in the state produce more value,” said Maria Auxiliadora de Carvalho, one of the authors of the study, in an interview with Agência FAPESP.

Carvalho is a retired researcher affiliated with the São Paulo State Department of Agriculture & Supply’s Institute of Agricultural Economics (IEA).

During the study, she analyzed the recent evolution of the agricultural sector in São Paulo using data from the Agricultural Censuses, Municipal Agricultural Production Surveys and National Household Sample Surveys (PNAD) carried out by the Brazilian Geography & Statistics Institute (IBGE).

With 11.7% of Brazil’s total crop acreage, São Paulo State contributed 18% of total agricultural production by value in the period 2010-12. “These proportions demonstrate the high productivity of agriculture in São Paulo,” Carvalho said.

Job losses

Another finding of the study is that the number of rural establishments in São Paulo fell 30% between the 1970 and 2006 Agricultural Censuses, from some 327,000 to about 228,000.

In the same period, their average area rose from 62.5 hectares to 74.5 hectares, indicating a concentration of land tenure.

This change was accompanied by job losses, as the number of people employed in the state’s agricultural sector diminished.

The rural population fell from 4.8 million in 1960 to 1.7 million in 2010, when it corresponded to 4.1% of the total population of São Paulo State and 5.6% of Brazil’s total rural population.

“Looking at the broader social context, we found that this contraction of the agricultural workforce was part of the movement of people from the countryside to the towns,” Carvalho said.

Production and productivity were not negatively affected by the decline in the size of the agricultural workforce. “In developed regions, this is considered part of a ‘normal’ trend, whereby fewer people produce more thanks to more intense use of technology,” she explained.

São Paulo contributed 11.3% of the value added to the basic prices of Brazilian agricultural production in 2010, according to the study.

The contraction in the state’s agricultural workforce was preceded by a rise in mechanization. The number of tractors rose from 67,000 in 1970 to more than 170,000 in the 1995-96 census and then fell in 2006 to 145,000, or 2.2 times the number in 1970.

Productivity gains and the decline in the rural population were accompanied by growth of rural per capita income. Between 1995 and 1997, for example, rural per capita income in both São Paulo and Brazil corresponded to 21% of urban per capita income.

Between 2000 and 2002, however, rural per capita income in São Paulo corresponded to 42% of urban per capita income in the state, while in Brazil the ratio was 33%.

The gap widened in the period 2010-12, when rural per capita income in Brazil fell to 31.4% of urban per capita income, whereas in São Paulo the proportion rose to 53%.

“These changes suggest a sharp drop in the difference between rural and urban-industrial incomes,” said Paulo Cidade, who coordinated the study. Cidade is a professor at the University of São Paulo’s Luiz de Queiroz College of Agriculture (ESALQ-USP).

Concentration

According to the researchers, agricultural production is also highly concentrated in São Paulo. Only 25 products accounted for 99.2% of the total value of the state’s agricultural production in the period 2010-12.

Sugarcane contributed 59.3%, followed by oranges with 12.6%; these two commodities alone accounted for more than 70% of the value of agricultural production in the three-year period.

“However, it’s important to bear in mind that these statistics are for major crops,” Carvalho said. “If we were to include floriculture, horticulture and some fruit crops, which are key elements of the agricultural supply chain in regions containing large cities, the degree of concentration would be lower.”

São Paulo State is the leading producer of sugarcane and oranges in Brazil, accounting respectively for 58% and 76.2% of national output of these two commodities.

The researchers note that São Paulo’s leadership is not confined to these two products, however. The state is Brazil’s leading producer of nine out of the 25 agricultural products most important to São Paulo: bananas, tomatoes, rubber, limes, peanuts, tangerines, persimmons, sugarcane and oranges. It is also the second largest producer of peaches, palm hearts and pineapple and ranks third in the production of coffee, grapes, potatoes and mangoes.

“Specialization in a certain number of agricultural products hasn’t been as harmful for the sector in São Paulo as many people imagined. Actually, it has enabled the sector to raise productivity,” Cidade said.

“And this rise in productivity has only been possible thanks to factors such as public investment in the sector, and above all research, technological innovation, rural extension and qualification of human resources.”

Poor and backward during the colonial period and early monarchy, São Paulo became extremely wealthy during the reign of Pedro II (1840-89) thanks to a single agricultural commodity: coffee.

During the first few decades of the twentieth century, at which point Brazil was a republic, São Paulo produced almost half the coffee traded worldwide. The 1929 Wall Street crash followed by the Great Depression triggered a dramatic fall in global demand for coffee, forcing São Paulo to scale back coffee growing and move into manufacturing, and São Paulo’s agricultural sector had to diversify as a result.

Industry burgeoned in the state, which led the development process in Brazil, and by the mid-1970s São Paulo accounted for 40% of Brazil’s gross domestic product (GDP).

Its share declined thereafter, owing mainly to a fall in industrial activity relative to the overall economy. In 2012, São Paulo accounted for 31% of Brazil’s GDP. According to the study, services contributed 73.1% of this share, while industry contributed 25% and agriculture only 1.9%.

Read more about the research project “FAPESP’s contribution to the development of agriculture in São Paulo State” at agencia.fapesp.br/24018.