Enhancing Brazil’s Agriculture Support

Marie Paviot, Hector Peña, Mauro del Grossi, Elena Mora López,María Florencia Tejeda, Victoria Traverso, Beatriz Garcia, Luisa LeitePublic Disclosure Authorized 2025 © 2025 The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet:www.worldbank.org Some rightsreserved. This work is a product of the staff of the World Bank with external contributions. Thefindings, interpretations,and conclusions expressed in this work do not necessarily reflectthe views of the Executive Directors of the World Bank or the governments they represent. Although the World Bank makes reasonable efforts to ensure all the information presentedin this document is correct, its accuracy and integrity cannot be guaranteed. Use of any dataor information from this document is at the user’s own risk and under no circumstancesshall the World Bank or any of its partners be liable for any loss, damage, liability or expenseincurred or suffered which is claimed to result from reliance on the data contained in thisdocument. The boundaries, colors, denomination, and other information shown in any mapin this work do not imply any judgment on the part of the World Bank concerning the legalstatus of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. BecausetheWorld Bankencouragesthedissemination of its knowledge, this work may be reproduced, in whole or inpart, for non-commercial purposesas long asfull attribution to this work is given. Attribution Please cite this work as follows: World Bank. 2025. Enhancing Brazil’s Agriculture Support: Policies for a Competitive, Green,and Inclusive Agrifood Sector.Paviot, M., Peña, H., del Grossi, M., Mora López, E., Tejeda, M. F.,Traverso, V., Garcia Ferreira, B. M., Leite, L. World Bank: Washington, DC. Any queries on rights and licenses, including subsidiary rights, should be addressed to: WorldBank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA;fax: 202-522-2625; e-mail:pubrights@worldbank.org ENHANCING BRAZIL’SAGRICULTURE SUPPORT:POLICIES FOR A COMPETITIVE,GREEN, AND INCLUSIVEAGRIFOOD SECTOR Marie Paviot, Hector Peña, Mauro del Grossi, Elena Mora López,María Florencia Tejeda, Victoria Traverso, Beatriz Garcia, Luisa Leite 2025 TABLE OF CONTENTS ACRONYMS12 EXECUTIVE SUMMARY14 Key messages18 1.INTRODUCTION22 2.MACROECONOMIC CONTEXT AND GROWTH CHALLENGES26 3.OVERVIEW OF BRAZIL’S AGRIFOOD SECTOR30 3.1Importance of the Agrifood Sector30 3.2An unequal success across farmers and regions34 3.3Major contributor and highly vulnerable: the climate changeparadox of Brazil’s agrifood sector43 4.OVERVIEW OF PUBLICSUPPORT FOR AGRIFOODAT THE FEDERAL LEVEL46 4.1Evolution of agrifood support policies and programs in Brazil47 4.2Main Agrifood Support Policies and Programs51 5.ANALYSIS OF AGRIFOOD PUBLIC SUPPORT POLICIES ANDPROGRAMS AT THE STATE LEVEL64 5.1Rapid overview of the share of the agrifood sectorin the 3 States’ economy67 5.1.3 State of São Paulo73 5.2Analysis of Support Levels and Composition among the 3 States76 5.2.4 General Services Support Estimates (GSSE)85 6.CONCLUSIONS AND POLICY RECOMMENDATIONS88 BIBLIOGRAPHY94 ANNEX 1. METHODOLOGY96 LIST OF FIGURES FIGURE 35.BENCHMARKING TSE BY SOURCES OF TRANSFERS79FIGURE 36.EVOLUTION OF TSE (IN R$ AND AS % OF AG GDP)80FIGURE 37.PRODUCER SUPPORT ESTIMATE AS A SHARE OF GROSS FARM RECEIPTS81FIGURE 38.BENCHMARKING PRODUCER SUPPORT AS A PROPORTION OF PRODUCER INCOMES(%PSE), 2017-202183FIGURE 39.BENCHMARKING THE COMPOSITION OF PSE (AVERAGE 2017 -2022)84FIGURE 40.BENCHMARKING %CSE, 2017-2021 (AVERAGE)85FIGURE 41.BENCHMARKING THE COMPOSITION OF THE GSSE86FIGURE 42.BENCHMARKING GSSE AS A PROPORTION OF AGRICULTURAL GDP87FIGURE 43.EVOLUTION OF GSSE BETWEEN 2017 AND 2021 (MILLION R$)87 LIST OF TABLES LIST OF BOXES BOX 1.VULNERABLE GROUPS IN BRAZILIAN AGRIFOOD SECTOR37BOX 2:PLANO SAFRA2024/2553BOX 3:BRAZILIAN FOREST CODE58BOX 4:CLIMATE CHANGE IN BRAZIL’S AGRIFOOD SECTOR POLICIES61BOX 1:CATEGORIES OF PRODUCER SUPPORT ESTIMATE (PSE)98BOX 2:CATEGORIES OF GENERAL SERVICES SUPPORT ESTIMATE101 ACKNOWLEDGEMENTS This report was prepared by a World Bank team led by Marie Paviot (SeniorAgriculture Economist, World Bank), and including Elena Mora López (AgricultureEconomist, World Bank), María Florencia Tejeda (Agriculture Economist, WorldBank), Victoria Traverso (Agriculture Analyst, World Bank), Beatriz Garcia (Intern,World Bank), Hector Peña (Consultant), Mauro del Grossi (Consultant), Luisa Leite(Intern, World Bank). The team is grateful for the guidance and support received from Diego Arias(Practice Manager, World Bank), Eli Weiss (Program Leader, World Bank), EdwardBresnyan (Lead Agriculture Economist, World Bank), Sergiy Zorya (Lead AgricultureEconomist, World Bank), Svetlana Edmeades (Lead Agriculture Economist, WorldBank), Vanina Daphne Forget (Senior Agriculture Economist, World Bank) andPao