Was it Uruguay or coffee? The causes of the beef jerky industry's decline in southern Brazil (1850 - 1889)

Abstract

ResumoCódigos JEL N46; N56; O14. AbstractWhat caused the decline of beef jerky production in Brazil? The main sustenance for slaves, beef jerky was the most important industry in southern Brazil. Nevertheless, by 1850, producers were already worried that they could not compete with Uruguayan industry.Traditional interpretations attribute this decline to the differences in productivity between labor markets; indeed, Brazil utilized slave labor, whereas Uruguay had abolished slavery in 1842. Recent research also raises the possibility of a Brazilian "Dutch disease",which resulted from the coffee export boom. We test both hypotheses and argue that Brazilian production's decline was associated with structural changes in demand for lowquality meat. Trade protection policies created disincentives for Brazilian producers to increase productivity and diversify its cattle industry.

Non-tradables in Brazilian economic history

“…The reduction in transport costs enabled the expansion of the agricultural frontier and thus sustained the boom in coffee exports and the appreciation of the real exchange rate. Outside the coffee sector, the real exchange rate appreciation caused the stagnation of exports of cotton and sugar in the Northeast, and of jerked beef in the South (Leff, 1984, 1991; Pereira, 2016, 2018). Furthermore, the reduction of transport costs contributed to the integration of domestic markets, increasing the competitiveness of tradables and leading to the geographic specialization of some regions in those activities to the detriment of non-tradables.…”

Poor Man's Crop? Slavery in Brazilian Cotton Regions (1800-1850)

“…How did these changes affect slave prices? In the absence of a reliable price index to account for inflationary shocks, Figure 4 compares nominal slave prices in Maranhão with prices in different areas in Brazil to show that, despite economic dissemblance, regions across Brazil had similar trends in slave prices during the first half of the nineteenth century (L. Bergad 2007;Pereira 2016). For Maranhão, Minas Gerais, and Rio Grande do Sul, series are for men between 15 and 40 years of age, who usually achieved the highest prices.…”

“…Prices for Pernambuco are decennial averages for the cotton region (Agreste) and include women, a fact which partially explains why prices are lower than those of the other provinces (Resende et al 2014). Sources: MA (Hawthorne 2010;Mesquita, 1987;Mota, 2012); PE (Denslow, 1987;Resende et al, 2014); MG (Bergad, 1999); RS (Pereira, 2016) Figure 4 shows an integrated national slave market, with Minas Gerais and Rio Grande do Sul showing similar means and trends. 2524 Much of the short-term deviation can be explained by differences in sample size, as Bergad's series for Minas Gerais has 16,279 observations, while the price series for Rio Grande do Sul has 1,284.…”

The Reconstruction of Brazil’s Foreign Trade Series, 1821-1913

“…While contemporary reports suggest that certain regions, such as Rio Grande do Sul, were characterised by an active contraband trade, it is difficult to calculate precisely what percentage of total trade this represented 13 . In the case of Rio Grande de Sul, the nature of the local economy determined that smuggling focussed predominantly on cattle rustling (Flores da Cunha Thompson Flores 2012; Pereira 2016, p. 9; Bonino-Gayoso et al 2015, p. 18). While important on a local level, it is likely that the impact on aggregate statistics would be small.…”