Metrics to segment the Brazilian agricultural financial market for operating loans
Santiago Freitas, Jaqueline
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https://hdl.handle.net/2142/109412
Description
Title
Metrics to segment the Brazilian agricultural financial market for operating loans
Author(s)
Santiago Freitas, Jaqueline
Issue Date
2020-12-11
Director of Research (if dissertation) or Advisor (if thesis)
Schnitkey, Gary Donald
Department of Study
Agr & Consumer Economics
Discipline
Agricultural & Applied Econ
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
M.S.
Degree Level
Thesis
Keyword(s)
agriculture
season plan
operating costs loans
Brazilian financial market
Abstract
This thesis will estimate the size of Brazilian Agricultural Financial Market for Operating Loans for the nine major crops in Brazil in the season 2018/2019. The study will determine the size of the total operating cost market, determine the size of the Rural-Credit versus Non-Credit funds, and divide it out by the financial intermediation institution. Our results indicate banks and cooperative banks lost market share in the last years, financing less than 50% of operating loans in the 2018/2019 season. Input suppliers have become relevant players, financing 17.17%. Agrochemical companies presented a market share of 13.7% while trading companies had a share of 10%; the smaller one is expected since they mostly work with grain and cotton. The last 13.9% if the total operating cost is financed by the farmer equity. These results can imply farmers are highly financed by third-party institutions, which makes their business dependent on this financial chain. This knowledge becomes important to the policymakers and government to prepare actions to protect and mitigate the related risks, and players to build better strategies and services for the farmers.
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