Agricultural production in the state of rio grande do sul / Brazil: An analysis from the estimation of the cobb douglas production function

Agribusiness plays a very significant role in the economy of the Brazilian state of Rio Grande do Sul because it generates jobs and income in rural and urban areas. The aim of this study was to evaluate the relationship between factors of production and gross output value in farms. Such analysis can underpin policies for maximization of the economic result of agricultural output. Thus, data from the Brazilian Agricultural Census (2006) were used for an estimation of the Cobb-Douglas production function. Among the findings, it is noteworthy that the existing capital within the rural establishments is the variable that accounts for most of the Gross Output Value of Agricultural Production. It was also observed that the returns to scale are decreasing and that the average productivity of factors is not homogeneous across microregions. As a result, this paper underlined the need for further research and public policies that can contribute to the modernization and increased agricultural productivity.