Rural Investment: BNDES Credit Contributes to Agricultural Intensification

The study finds that BNDES credit for agricultural equipment increases land productivity and stimulates crop production without increasing deforestation. The effects are most pronounced in labor-intensive municipalities and when financing is directed toward labor-saving equipment, such as tractors and harvesters, which often leads to the replacement of pasture areas with more productive cropland.

• BNDES credit for agricultural equipment increases land productivity and stimulates production without expanding the total agricultural area or increasing deforestation.
• A 1% increase in the supply of municipal credit for equipment is associated with a 0.18% increase in cropland productivity and a 0.08% increase in cattle land productivity.
• The impact of credit is heterogeneous, with more labor-intensive municipalities showing higher productivity increases in agriculture, particularly in crops.
• Credit for labor-saving equipment, which accounted for 68% of equipment credit between 2005 and 2019, produces stronger effects on production and productivity, especially in labor-intensive areas.
• Increased credit availability leads to a shift in land use where pasture areas are replaced by cropland, which is generally more productive.
• There is evidence of a small increase in deforestation specifically when credit is expanded to the subgroup of municipalities with the lowest proportions of rural workers per area.

APA

Climate Policy Initiative (2022). Rural Investment: BNDES Credit Contributes to Agricultural Intensification. https://www.climatepolicyinitiative.org/publication/rural-investment-bndes-credit-contributes-to-agricultural-intensification/

Chicago

Climate Policy Initiative. Rural Investment: BNDES Credit Contributes to Agricultural Intensification. 2022. https://www.climatepolicyinitiative.org/publication/rural-investment-bndes-credit-contributes-to-agricultural-intensification/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Rural Investment: BNDES Credit Contributes to Agricultural Intensification |date=10 May 2022 |url=https://www.climatepolicyinitiative.org/publication/rural-investment-bndes-credit-contributes-to-agricultural-intensification/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2022rural, author = {{Climate Policy Initiative}}, title = {{Rural Investment: BNDES Credit Contributes to Agricultural Intensification}}, institution = {Climate Policy Initiative}, year = {2022}, month = may, url = {https://www.climatepolicyinitiative.org/publication/rural-investment-bndes-credit-contributes-to-agricultural-intensification/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }