Socioeconomic, Environmental, and Institutional Determinants of Cattle Ranching in the State of Pará, Brazilian Amazon

Abstract

This study investigates how socioeconomic, environmental, and institutional variables affect the growth of cattle ranching in the state of Pará, Brazilian Amazon. Covering the period from 1995 to 2019, we used an econometric model based on the Ordinary Least Squares method. Resultingly, we found that the price of fat cattle and the supply of rural credit exert a positive effect on herd growth. The deforestation rates are directly associated with herd expansion. More precisely, the variable for the deforestation rate, lagged by two periods, significantly impacts herd increment in the present time. Furthermore, a essential step towards increasing the cattle herd was the creation of the Agricultural Defense Agency of the state of Pará. Overall, this study shows that the expansion of cattle ranching in Pará is a multivariate phenomenon determined by socioeconomic, environmental, and institutional dynamics of the regional and national economies.

Changes and Factors Determining the Efficiency of Cattle Farming in the State of Pará, Brazilian Amazon

“…In Pará, especially in the municipalities of Southeast of Pará, which are part of Brazil's high resource collection cluster, investments are mainly directed towards the acquisition, rearing, and fattening of cattle, as well as pastures, machinery, and tractors [61]. The positive effects of rural credit were also observed [20], where it was found that rural credit policies contributed to the increase in the herd in Pará from 1995 to 2019, facilitating the acquisition of animals for reproduction, investment in pasture, management, and the implementation and recovery of intensive systems.…”

“…Moreover, the rising consumer demand for higher quality products necessitated shorter production cycles, which rely on the nutritional value of animal feed and the herd health management. In other words, there is a need to produce more while using less land and ensuring the production of higher quality products [18][19][20].…”

Beef Cattle Cycle in the State of Pará, Amazon, Brazil

“…The growth of the cattle herd in Pará has largely been due to the increase in pasture area, combined with animal health control, in addition to public investments, such as the availability of rural credit (Santos et al, 2012;Freitas Junior & Barros, 2021;Santos et al, 2022a), which together have generated gains in livestock productivity. The intensification of livestock activity through the proper management of pastures, the recovery of already deforested areas and the use of genetic improvement, through project financing (Rodrigues & Silva, 2016), has also led to an increase in productivity, in addition to being a way of mitigating deforestation.…”