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Profitability prospects, risk aversion and time preferences of soybean producers in the region of Santarém, Brazilian Amazon: perspectives for an ecological transition

Published online by Cambridge University Press:  18 November 2020

Gabriel Leblanc ,
Marc Lucotte ,
Frédéric Mertens  and
Charles Séguin Open the ORCID record for Charles Séguin [Opens in a new window]
Gabriel Leblanc
Affiliation:
Institut des sciences de l'environnement, Faculté des sciences, Université du Québec à Montréal, Montréal (Québec), Canada
Marc Lucotte
Affiliation:
Institut des sciences de l'environnement, Faculté des sciences, Université du Québec à Montréal, Montréal (Québec), Canada GEOTOP and Département des sciences de la Terre et de l'atmosphère, Faculté des sciences, Université du Québec à Montréal, Montréal (Québec), Canada
Frédéric Mertens
Affiliation:
Universidade de Brasília - UnB, Centro de Desenvolvimento Sustentável, Brasilia, Federal District, Brazil
Charles Séguin*
Affiliation:
Institut des sciences de l'environnement, Faculté des sciences, Université du Québec à Montréal, Montréal (Québec), Canada Département des sciences économiques, École des sciences de la gestion, Université du Québec à Montréal, Case postale 8888, succursale Centre-ville, Montréal, (Québec) H3C 3P8, Canada
*
Author for correspondence: Charles Séguin, E-mail: seguin.charles@uqam.ca
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Abstract

Reducing adverse environmental consequences of modern industrial agriculture requires an ecological transition of agricultural practices. An important determinant of adoption of new agricultural practices by producers is the perceived profitability of these practices. The profitability of ecological agricultural practices tends to rely on improved crop prices and reduced input use. Transition to such practices often entails increased profit volatility (risk) and long-term returns (temporal profile). Ideal candidates for transition would therefore be aware of the output price and input costs dimensions of their profitability, as well as willing to assume some risks and show patience to value long-term returns. We assessed the potential for such a transition along these three dimensions (profitability, risk aversion and time preferences) in a group of soybean producers in the agricultural frontier of the Brazilian Amazon. Primary data were collected using a questionnaire and economic tests in the region of Santarém (State of Pará, Brazil). We found that, while these producers have a low-risk aversion that could favor the adoption of new ecological practices, their focus on increasing yields to enhance profits and their high discount rates considerably reduces their propensity to adopt these practices.

Keywords

Agricultural profitabilityecological transitionrisk aversiontime preferences
Type
Research Paper
Information
Renewable Agriculture and Food Systems , Volume 36 , Issue 3 , June 2021 , pp. 290 - 298
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Copyright
Copyright © The Author(s), 2020. Published by Cambridge University Press

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