Assessing the Impacts of ENSO-related Weather Effects on the Brazilian Agriculture

This paper aims at assessing the impacts of ENSO events on the Brazilian agricultural production. The analysis is focused in the Northeast and South regions, the most vulnerable to ENSO effects in Brazil. We adopt a three-stage approach. First, we specify a spline regression model relating sea surface temperature anomalies (SSTA) in the Pacific to weather conditions in Brazilian municipalities. Then, we specify a second group of regressions aimed at assessing how temperature and precipitation in Brazilian municipalities determine crop yields. Finally, with the estimated coefficients provided by the regressions of the early stages, we conduct simulation exercises to evaluate the impacts of ENSO on crop yields. Simulation results show that corn and bean production are quite more vulnerable to El Niño effects in the Northeast region, with productivity losses reaching 50%. The critical impact on corn and bean has important socioeconomic consequences, since these crops are mainly produced by household farmers. We also found that the impact of La Niña in the South region is quite significant for all the crops.