According to global experience, agriculture's contribution to a country's gross domestic product (GDP) has diminished over the years. This has occurred in almost nations, including in Brazil from 1960 to 1993. However, from middle 1990's to the year of 2004, Brazil experienced an increase in this variable, what was not followed by most of the South American countries. This paper analyzes the factors that explain agriculture's contribution to the Brazilian gross domestic product during 1986-2004 period and the reasons for the rise of this contribution since mid-90s to 2004. The methodology used is both organization of published dataset in graphs and tables as well as econometric analysis of these data. An accounting model is used to explain the main factors affecting agriculture's contribution to GDP growth and an econometric model is adapted for estimating the accounting model. Using dataset from 1986 to 2004, our econometric findings confirm there is a structural change in the curve of agriculture participation in the GDP, and the main variables determining this, from 1993 to 2004, are (received/paid prices) ratio, agricultural and industrial productivities as well as lagged participation of agriculture in the GDP.
GDP; agriculture importance; econometric model; Brazil
