Effects of Rural Credit on the Irrigated Agriculture in Brazil under Environmental Contraints
Rural Credit; Irrigated Agriculture; rrigation Return Flows; Public Policies; Water Sustainability.
Given the relevance of rural credit as a policy instrument to foster agricultural development in Brazil, the growing importance of irrigation for increasing agricultural production, and the pressure this practice places on available water resources, this thesis analyzes the temporal behavior of credit series and water use in irrigated agriculture, as well as the impact of a credit program focused on irrigation on water return flows. The research is structured into three chapters. The first chapter examines disbursements from three major rural credit programs: the Program for the Modernization of Agriculture and Conservation of Natural Resources (Moderagro), the Program for the Incentive of Irrigation and Storage (Moderinfra), and the National Program for Strengthening Family Farming (Pronaf). Using fractional integration techniques, the study investigates the presence of long memory in the series and whether exogenous shocks—such as economic crises and political changes—persistently affected their trajectories from 2002 to 2023. The second chapter examines the series of irrigation withdrawal, consumption, and return flows in Brazil between 1931 and 2023. The third chapter analyzes the effects of rural credit, via the Moderinfra program, on irrigation return flows in the Northeast region of Brazil. Difference-in-Differences models were used, both in the traditional form and with more recent approaches that consider multiple periods. The analysis was based on panel data from 919 municipalities, from 2003 to 2023. The results indicate the absence of statistically significant effects of access to credit on irrigation return flows. Robustness tests reinforce the validity of the estimates. The spatial heterogeneity analysis revealed that the impact of credit is not homogeneous across biomes, reinforcing the importance of differentiated regional analyses. It is recommended to extend the analysis to other Brazilian regions and investigate the role of irrigation and water resources policies in promoting sustainability in irrigated agriculture.