DISTRIBUTION OF FARM INCOMES UNDER ALTERNATIVE POLICY REGIMES, A DYNAMIC ANALYSIS OF RECENT DEVELOPMENTS IN SOUTHERN BRAZIL, 1960-1970

This is done by constructing a regional model of the wheat regions of Rio Grande do Sul using a recursive programming framework. The model is estimated from 1960-1970 under alternative policy assumptions. Findings: (1) Pricing policies plus institutional credit were responsible for nearly doubling the rate of growth of farm output in the region. (2) The price support policy has increased the rate of growth of farm output on medium and large farms compared to small farms; a liberal credit program has enabled medium farms to expand their output more rapidly than other farms. (3) The joint impact of the price subsidy and credit program was to increase the inequality of farm incomes of small and medium vis-a-vis large farms while preserving the initial inequality between small and medium farms. (4) The inequalities of returns to family labor are generally greater than the inequalities of farm incomes, but the joint impact upon returns to family labor has been similar as the impact upon farm incomes.