Technical Efficiency and Public Policies in Agriculture: An Analysis for the Eastern Amazon Region

The agricultural sector in one of the most dynamic industries of the Brazilian economy and is responsible for about 30% of the GDP of the state of Pará, located in the Brazilian Eastern Amazon region. This is mainly due to the public policies developed for the sector, with emphasis on the National Policy of Technical Assistance and Rural Extension (PNATER) and Rural Credit, in addition to conditional cash transfer programs such as Bolsa Família (Family Allowance). Given this scenario, the purpose of this research is to determine the technical efficiency of the agricultural rural facilities of Pará, and observe the effect of these policies on their inefficiency. The methodology employed in order to achieve these objectives is the stochastic frontier approach, and the data used was obtained from a special tabulation based on the 2006 Agricultural Census. The main results evidence that rural credit policies, social welfare programs, and technical support are important to reduce the technical inefficiency of the rural facilities of the State of Pará. The latter, however, is not statistically significant.