Abstract

This paper reviews the effects of Plano Real’s macroeconomic policies on agriculture
and discusses the new perspectives open after the strong devaluation of our currency in
January 1999. Brazilian agriculture was severely affected by the combination of high interest
rates – overvalued exchange rate. In addition, it has had to face the problems of excessive
reduction in import tariffs, of financed imports and of low economic growth rates in recent
years. Some favorable changes in international trade offset, at least partially, the problem of
currency overvaluation. Brazil has always been recognized as having a strong comparative
advantage in agriculture. The devaluation which occurred, beginning in January 1999, opens
better perspectives for the country to exploit its competitiveness in international markets.

JEL Classification: Q14; Q17; E42.