The economics of post-harvest loss: a case study of the new large soybean - maize producers in tropical Brazil

Abstract

Reducing post-harvest loss (PHL) allows farmers to keep more of their crop and increases grain supplies, which are critical in a world where resources are scarce and rural developing economies struggle. While the policy goal is well understood, the micro-economics of loss are not. Little research focuses on the role managers play in reducing loss. Using economic theory and field research, we built and tested a conceptual model of farmers’ loss problem. We modelled a tradeoff where the opportunity costs of loss mitigation were sufficiently high to motivate managers to increase rather than reduce PHL. The setting was the fast growing tropical maize and soybean region of Mato Grosso, Brazil. Results showed that harvest losses of 6 % and short-haul losses of 2 % in soybean, as an opportunity cost, might be insufficient to cause farmers to be as aggressive in reducing loss as policy makers would expect. This is because delay in harvesting soybean may delay the planting of maize as a second crop (safrinha) on the same land, causing risk of loss of this valuable crop owing to drought and inhibition of pollination. Hastening of the harvest of soybean (and consequent loss) can be achieved by desiccation and increased harvesting speeds. The results provide insights, which may be applicable elsewhere, into the complexities of tropical grain production where high moisture environments, large spatial contexts and poor infrastructure promote tactics, such as those described, in order maximize the benefits of double cropping.