Given the importance of the agriculture sector to the Brazilian economy, it is essential to understand the determinants of agricultural development in its municipalities. Based on the theoretical framework that addresses issues related to determinants of agricultural development and local economic development, this study employed methods of analysis known as multivariate factor analysis and cluster analysis. We used the state of Minas Gerais for our analytical approach, selecting 22 variables for each municipality, representing different dimensions of development, to identify which were determinants of agricultural development. After factor analysis, we chose to extract six factors with characteristic roots greater than one and that, together, accounted for 62.25% of the total variance of the data: economic development, public investment, quality of living conditions, agricultural activity, environmental and consumption conditions, and financing. Through cluster analysis we created five groups, according to the performance of members in each factor. The results corroborate the literature almost in its entirety, and also highlight and discuss the existence of a positive cycle generated by the increase of the determinants of agricultural development and competitive advantages. This study pointed to the importance of public investment in promoting development, strengthening proposals in previous studies that the state plays a key role in ensuring that conditions favor the development of the agricultural sector. Another feasible finding is that good agricultural and environmental factors alone are not capable of providing development for the industry in the municipalities of Minas Gerais.
local economic development; rural development; agribusiness; public administration; multivariate analysis
