Econometric analysis of income, productivity and diversification among smallholders in Brazil

Family farming plays important roles in agricultural production and the world's food security. This paper provides an econometric analysis of income, productivity and diversification of Brazilian smallholders. Using the most updated data from the Ministry of Agrarian Development (MDA) enables a more precise analysis than traditional agri-census data. The database contains approximately 4.7 million family farmers from all regions of the country. We used linear and tobit regression to untangle useful information behind these large datasets. The results demonstrated that the smallholders that are part of an agricultural cooperative or a member of a farmer's association positively affect income, productivity and diversification. The age of household heads is shown to have a non-linear relationship in the three cases, while the household head being female presented a negative effect in all regressions. Although recent technical assistance showed negative impacts on income and productivity, farmer's assistance positively affected the likelihood of a smallholder diversifying their production and, therefore, becoming less subject to price imbalances. The results support current views in the field of smallholder farming while presenting marked regional differences of a continental country, enabling policy makers to make better, more informed decisions.