Agriculture Exports Versus Domestic Food Processing: Impacts of an Exports Substitution Policy on Brasilian Economy

Abstract

Based on the input-output analysis, this study examined the potential economic growth caused by substituting the export of the agrifood industry fresh products for domestic processing. Results showed that this substitution led to a R$ 4.86 billion increases in the national GPV. Moreover, given the industrial concentration in the Southeast Region of the country, this substitution can lead to increased economic inequality among the Federation Units. This theoretical exercise, besides to contributing to the literature on the importance of adding value to production by processing agricultural commodities, may help guide policies aimed at promoting economic growth.