Public food procurement and production: Evidence of the food acquisition program in Brazil

Abstract

This study investigates the impact of the Food Purchase Programme (PAA), a Brazilian public food procurement initiative, on the production value of family farmers. Using a combination of Propensity Score Matching and Difference-in-Differences methods for the period spanning from 2007 to 2016, we observe a significant positive effect of 13.1% on the production value of participating family farmers compared to non-participants. This effect is particularly pronounced among farmers operating smaller and lower-income establishments. Our analysis suggests that increased productivity may serve as a potential mechanism explaining our findings. Additionally, we provide evidence that the PAA program contributes to stabilizing rural incomes and expenditures. Our results have significant policy implications for public food procurement policies, including the importance of focusing on small and low-income agricultural establishments, which may enhance production and alleviate poverty while contributing to family income.