The Causes and Consequences of the Spatial Organization of Agriculture in Brazil

I develop a quantitative general equilibrium framework to investigate the spatial organization of agriculture. Using county-level data from Brazil to estimate the model, I show that both differences in natural advantages and... [ view full abstract ]

I develop a quantitative general equilibrium framework to investigate the spatial organization of agriculture. Using county-level data from Brazil to estimate the model, I show that both differences in natural advantages and factor intensities are key causes of the location of crops. I then study two major shocks in Brazilian agriculture: the adaptation of soybeans to tropical regions and the rise in the Chinese demand for commodities. I find that accounting for their spatial propagation is crucial for the evaluation of the returns to agricultural research, the impact of soybeans on urbanization, and the gains from agricultural exports to China.