Analysis of the Impact of Institutional Changes on Sugar Production in Brazil between 1980 to 2015

Abstract

 This paper analyzes the impact of institutional changes on sugar production in Brazil between 1980 and 2015. Three of these institutional changes were considered: the Very High Polarization (VHP) sugar innovation; Sectoral deregulation; The fall of European subsidies to the production of this commodity. The relevance of this work lies in the fact that these changes - already recognized in the discussions on the development of the sugar and alcohol sector - are analyzed empirically using statistical techniques (hypothesis test, growth rates and econometric model). The hypothesis test proved that the average sugar production changed before and after each event. The growth rates showed that, after each change, the rhythm of production was changed, especially for the Center-South region and for the State of São Paulo. Econometric models have confirmed that institutional changes have altered the slope of the sugar production curve and provide estimates of this growth. It is verified that the innovation of VHP sugar was the institutional change that most impacted Brazilian production.