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AF25-O000-G514 an Economic Analysis of Fertilizer Utilization

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AF25-O000-G514 an Economic Analysis of Fertilizer Utilization AGENCY FOR INTERNATIONAL DEVELOPMENT FOR AID USE ONLY WASHINGTON. D. C. 20623 BIBLIOGRAPHIC INPUT SHEET A. PRIMARY I. SUBJECT Agriculture AF25-O000-G514 CLASSI- FICATION B. SECONDARY Soil fertility, fertilizers, and plant nutrition--Brazil 2. TITLE AND SUBTITLE An economic analysis of fertilizer utilization in Brazil 3. AUTHOR(S) Nelson,W.C. 4. DOCUMENT DA-,' E 5. NUMBER OF PAGES 6. ARC NUMBER 1971 204p.. ARC . 7. REFERENCE ORGANIZATION NAME AND ADDRESS Ohio State 8. SUPPLEMENTARY NOTES (Sponsoring Organization, Publishera Availabilty) -, , (Diss.--Ohio State) 9.ABSTRACT 10. CONTROL NUMBER I1.PRICE OF DOCUMENT PN-RAA- 346 12. DESCRIPTORS 13. PROJECT NUMBER Brazil 14. CONTRACT NUMBER CSD-2501 Res. 15. TYPE OF DOCUMENT AID 5901 (4-74) AN, ECONO MIC NALYSIS OF FERTILIZER -' .:.UTILIZATION IN BRAZIL1 - DISSERTATION -Presented:in Pa tial Fulfillment of the Requirements'for tiheDegree Doctor of Philosophy iu the Graduate School of The Ohio State University ,William Charles Nelson-, B .S., MS. The Ohio State University Approvyed, by Adviser .',"Department of Agricultural ..Economics and Rural Sociology -TABLE OF CONTENTS A CKNOWLEDGMENTS VITA LIST OF TABLES Chapter I. INTRODUCTION Justification Methodology tII. ECONOMIC ISSUES RELATED TO'FERTILIZER USE IN BRAZIL Conceptual Outline Supply Demand Brazilian Fertilizer Usage.195 to 1970 Supply of Fertilizer Production Marketing Price Policy Demand for Fertilizer Productivity Management Credit Policy Summary III. DESCRIPTION OF AREA AND SAMPLE Area Description Sample Farms Chapter I.i MODEL AND VARIABLE DESCRIPTION' Statistical Model Variable Description Functions. and Samples, ..V. PRODUCTIVITY ANA LYSIS RegionalA ProductionAalysis ' .All 'Crops Corn- Rice' Cotton Soybeans Economics of Fertilization Location and Crop 'Level of Use and Crop Summary VI. POSSIBLE CAUSES OF THE FERTILIZER PROBLEM Actual Versus Optimum Fertilizer Usage. Factors Affecting the Response to Fertilization.: Factors Specific To This Study General- Factors :Summary -VII .CONCLUSIONS AND RESEARCH RECOMMENDATIONS... Conclusions Research Recommendations APPENDIX A'. TERMS AND MASURES, B, FARM QUESTIONNAIRE C. INFRx.STRUCTURE QUESTIONNAIRES Page-: APPENDIX 1rJ. NATIONAL FERTILIZER DATA bi. CALCULATION OF INDICES F. MEANS OF VARIABLES G. TPr..qTTT.T.q OF ANALYSIS ,BIBLIOGRAPHY 1iT OF,',TABLES Table Pag 11,: Percentage of Area Fertilized,-by 'Crop and&Regioni Brazil, 1968 2 ,Future Brazilian.Production Facilities 3. Dear'Lisii Prices of Selected Fertilizer'per ton in 169/70, Ribeirao Preto Region 4. Supply and Crop s Elasticities of Selected Agricultural Products, Sao .Paulo, Brazil :5. Summary of Crop Response to Fertilizer, Brazil 6 Summary of Fertilizer Experiments in Sao Paulo Reported by Agri-Research, Inc. 1964. .7., Summary of Findings of:Aaalyses'of Response to Fertilizer .8 Area and Production of Selected Agricultural 'Products in the State ofSao' Paulo and Ribeirao Preto Region, 1970 9., Rainfall in the Ribeirao.Preto Region, 1968- 1970 10. Average Yields' of Selected Annual Crops for 1966n 970 a"nd. 1969/70 11.- Distribution of Sample Farms.by.Size, Type and Location 12. : Tenure Situatiun of Sample Farm ,by Size,, Type and Location : 13. Fertiliz-r Use:pera Type and aLocationn4 ­ -TablePg 14. Comparison of Fertilizer Recommendations to Actual Use by Farmers in the Ribeirao Preto Region, 1969/70 15. Credit Use per Operated Hectare on Sample Farms by Size, Type and Location 16. Indices of Management and Information Use of Sample Farms by Size, Type and Location 17, Mean Values of Crop Yields and Inputs for All Sample Farms, Ribeirao Preto Region,, 1969/70 18. Regional All Crop Production Functions - , 19.. Corn Production Functions ,for the,.Ribeirao Preto Region 20. Rice Production Functions for the Ribeirao Preto Region, 21, Cotton Production Functions for 'the Ribeirao Preto Region 22. Soybean Production Function for'the Ribeirao Preto Region 23. Value of the Marginal Product of Fertilizer by Nutrient, Crop and Location 24. Value of the Marginal Product of Fertilizer by Nutrient, Crop and Level of Use 25. Value of the Marginal Product of Fertilizer by Nutrient, Crop and Level of Use as Derived from Quadratic Functions 26. Summary of Fertilizer Use: Actual, Recc,.imended and Optimum by Crop,, ibeirao Preto Region, 1969/70 Tablc ;Page 27. .Weighting Factors for the Components of the Management and Information Indices 28. Coefficients for Management and Information Indices '29. Methods of Calculation'of.Management and Information Indices I and II 30. :Consumption and Production of Fertilizer by Region, Brazil, 1950-1970 31. Indices of Fertilizer and Crop Prices, and the­ :Ratio of Fertilizer Prices t6Zi. Prices, 1950-1970 32. Prices of:Nitrogen, Phosphate and Potassium, Brazil, 1950-1970 33. :Agricultural Credit.and Interest Rates, Brazil, 1950- 1970. :34. 'Cultivated Area and Yield Index, Brazil, 1950­ 1970. ,35. Arithmetic Mean Values ofAggregate Productii byTotal and Lo' tionrVariable 36. Geometic. Mean Values of Aggregate Productior Variables by Total and Location .37. Arithmetic Mean Values Of Corn' Production Variables by Total, Level of Fertilizer Us e and Location '38,. Geometric Mean Values of. Gorn Production,- Variables by Total, Level of Fertilizer Use and Location 39. Aritbmetic Mean Values of Rice'Production Variables by Total, ',Level of..ert.lizerUse: and Lozation I­ TA Ie ;Pag 140..Geometric Mean Values of Rice Production . Variables by Total, Level of Fertilizer Use and Location 41. Arithmetic Mean Values of Cotton Production- Variables by Total, Level of Fertilizer Use and Location 4Z,. Geometric Mean Values of Cotton Produdtion Variables by Total, Level of Fertilizer Use and Location 43. Arithmetic Mean Values of So ybean Production.. Variables by Total, Level of FertilizerU'.Use . and Location 44. Geometric Mean Values of Soybean Production Variables by Total, Level of Fertilizer Use and Location 45. Regional All Crop Production Funtions 46. Regional All Crop Quadratic Production Functions. 47. Guaira All Crop Production Functions -48. Jard. -Sales All Crop Production',Functions" '49. Other Areas All Crop Production. Functions'I ,S'50. Regional Corrf Production Functions' 51. Subregion Corn Production Functions,, 52. Sample A, High Group Corn Production Functions 53. Sample A, Low Group Corn Production Functions 54. Sample B, All Group Corn Production Functions .55. S-imple B. High Group Corn Production Functions Table Page- . 1 56. Sample B, Low GroupCorn Production-Functions 57. Sample B; Other Group Corn,Production Functions 58.. Regional Rice Production Functions Subregion Rice Production Functions, 60o. sample.'A, High: Group. Rice Productio'n Functions 61. Sample A, Low Group, Rice Production Functions 62. Sample B,'High Group, Rice Production' Functions 63. Sample B, Low Group, Rice Productin Functions. 64. Sample B, Other Group Rice Production Functions 65. ;Regional Cotton Production. Functions 66. Subregion Cotton Production Functions 67. Sample A, .High Group, Cotton Production Functions 68. Sample ,A, Low, Group, ,Cotton Production Functions 69. Sample B, High Group, Cotton Production Functions 70.' Sample B, Low Group, Cotcon Production Functions I7 I. Regional Soybean Production Functions 72. Subregion Soybean Production Functions :73. Sample, AtHigh Group, Soybean Production Functions 74'. Sam ple. A, Low Group,' Soybean roduction'Fnctifons ,75. Sample 'B,. All.Group, Soybean Production Functions 76.... p. B Other Group,9.' Soybean,. Production,n. Functio- '- n 9.i,'-s,>.." nRODUCTION upon land and labor:,', * 'Traditional agriculture largely depends agriculture is marked 'for its output while the transition to a modern change, and by the use of a number of new inputs, technological inputs. One of the most improvement in the quality of traditional the rapid increase in use of prominent features of this transition is to 1968/69 period worldwide chemical fertilizers. Over the 1966/67 rate of 8 percent. fertilizer use increased at an average annual increased more Usage of chemical fertilizer in South America period. In some cases rapidly, averaging 25 percent in the same changes in technolo­ fertilizer use has been stimuleted by dramatic to plant which are highly responsive gies, e.g. new seed varieties In other cases fertilizer nutrients, irrigation, or mechanization. credit incentives, or use has been spurred by concessional prices, chemical-fertilizer educational programs. By almost any measure, a key factor fin accelerating has become and will likely continue to be agricultural development. plays an impor­ In the process of capital formation, fertilizer thus increasing the 4__t_^,nr a and net revenue, capacity for investment. Thsa existence ofmarketingand transpor­ *tation facilities for fertilizer,use .indirectly makes these facilities: available for other inputs and products t'in the rural sector. The use of fertilizer may also change the structure of the capital assets of a farm firm; a larger portion of capital must be in liquid assets to be used for operating expenses, This normally will cause an increase in the percentage of product which is marketed thereby transforming the farm from a traditional type of agt:iculture to a market oriented unit. This study will focus on recent changes in fertilizer utilization in Brazil. Not only has Brazil sharply increased its fertilizer use recently,but it also has been very active in adjusting policies which affected the profitability of fertilizer application. The objectives of this study are: 1) to estimate the value of
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