The Real Plan and the Brazilian agriculture: perspectives

ABSTRACT

This paper reviews the effects of Plano Real’s macroeconomic policies on agriculture and discusses the new perspectives open after the strong devaluation of our currency in January 1999. Brazilian agriculture was severely affected by the combination of high interest rates - overvalued exchange rate. In addition, it has had to face the problems of excessive reduction in import tariffs, of financed imports and of low economic growth rates in recent years. Some favorable changes in international trade offset, at least partially, the problem of currency overvaluation. Brazil has always been recognized as having a strong comparative advantage in agriculture. The devaluation which occurred, beginning in January 1999, opens better perspectives for the country to exploit its competitiveness in international markets.

KEYWORDS:
Real Plan; stabilization programs; agriculture; economic growth