AbstractsEconomics

This study provides an evaluation of the management practices adopted by soybean farmers in northern Mato Grosso, Brazil to promote sustainable agriculture. Since Amaggi Group, the leading soybean operator in Mato Grosso, requires social and environmental responsibility from its pre-financed producers, this study addresses the following research questions: Do management practices differ between pre-financed and not pre-financed farmers with regard to implementation of no-tillage systems, deforestation and pesticide use? Are there differences in yield between farmers pre-financed by the Amaggi Group and those who are not? Moreover, because farms are located in different biomes such as Cerrado and Amazon Forest, additional questions arise: Do management practices differ among the municipalities of Sinop, Sorriso and Tapurah, with regard to no-tillage systems, deforestation, forested area and pesticide use? Are there differences in soybean yield among the municipalities of Sinop, Sorriso and Tapurah? A case study of two soybean farms in the region of Sinop provides indications of the impacts of uncertainties in the exchange rate and the world soybean price on the farmers' net revenue. A total of 40 soybean producers chosen randomly were interviewed, from which 20 farmers were pre-financed by Amaggi and 20 farmers were not pre-financed. With regard to their location, 10 farms were located in Sinop, 20 in Sorriso and 10 in Tapurah. Data collected with regard to land use, soybean farming practices, and soybean yields were statistically analyzed. Soybean pest and diseases, and pesticide use were also considered. For two farms located in Sinop, net revenue analyses and risk analyses were conducted. Data analyses revealed that the only difference between pre-financed and not pre-financed farms is related to the no-tillage system: 15% of the pre-financed soybean area did not have surface residues from cover crops, compared with 0.5% of not pre-financed farms. Comparisons among the farm locations revealed that an average of 27% of farm area in Sorriso was deforested while farms in Sinop were on average of 37% deforested. The use of desiccant prior to soybean harvest was an exception in pesticide patterns: farms located in Tapurah applied desiccant to 82% of their soybean area while farms located in Sorriso applied it to 50% of their area. Finally farms in Sinop had a higher soybean yield of fifty-two 60kg bags per hectare compared with 56 bags in Sorriso. The case study of two farms in Sinop revealed that the smaller farm is more susceptible to risks and uncertainties in the exchange rate and soybean price. An unfavorable exchange rate and relatively low soybean price increased the risk of the smaller farm losing money.