Adjusting Out of an Import-Substitution Industrialization Policy to an Agricultural Modernization Policy – Brazil

            The objective of this paper is to present and discuss the Brazilian experience in the adjustment process that agriculture hat to face in moving from an Import-Substituting Industrialization (ISI) policies which discriminated severely against agriculture to a more open trade regime. This paper emphasizes the nature of the adjustment problems that Brazil faced as it made this transition. For nearly three decades Brazil pursued an ISI policy. Their consequences will be shortly reviewed in this paper. Emphasis will also be placed in the problems of management of a modern agriculture under macroeconomic stabilization.

            For the purposes of this paper scattered evidence has been gathered and new empirical evidence has been generated to show the core of the ISI policies, their consequences, the reforms adopted, after this model has been exhausted, and the impact of all the reforms on a Brazil’s booming agriculture. The most important reforms, towards macroeconomic stabilization and trade liberalization created a series of difficulties for agriculture. Most of them already existed in the past. They were only magnified by the reforms. Other just appeared in the transition period from “ancient régime” to a modern agriculture in Brazil.

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