The policy of rural credit in the State of Pará, Brazil: spatial distribution and concentration of financial application in the 2000-2010 period

Abstract

Spatial distribution and the concentration of financial applications of rural credit in the northern state of Pará, Brazil, during the 2000-2010 period are provided. Data collected by the Brazilian Institute for Geography and Statistics (IBGE) and by the Central Bank of Brazil (BACEN) were employed. Results show that only 8.69% of agricultural and cattle-raising establishments in the state of Pará, Brazil, received rural credit. Further, 557,513 activities, totaling R$ 7.4 billion, were attended to during the 2000-2010 period, of which 71.47% were applied in cattle-raising activities and 28.53% in agricultural activities. Normalized Index of Rural Credit (INCR) identified 25 municipalities specialized in agriculture, 33 averagely agricultural, 31 averagely cattle-raising and 54 cattle-raising. Gini Index shows high credit concentration, with mean rates of 0.7137 and 0.7474 respectively for agricultural and cattle-raising credit. One third of money applied during the period was lent to a mere 10 municipalities. Results indicate high credit concentration levels and require that financial institutions devoted to rural credit policies should broaden bank inclusion and access to credit to a higher number of rural producers in the 143 municipalities of the state of Pará.