Socioeconomic Effects of the Direct Procurement from Family Farming in the Brazilian School Feeding Program

Abstract In 2009, the Brazilian School Feeding Program (PNAE) became the first national initiative worldwide to mandate that at least 30% of federal resources - previously spent on public tenders – be directed toward the direct procurement of food from family farmers. In Brazil, these producers are more likely to adopt environmentally sustainable agricultural practices. This policy, therefore, aimed to both improve students’ diet quality and strengthen local food systems through support for family farmers. Despite its ambition, the nationwide socioeconomic effects of this procurement reform remain understudied. This paper aims to fill this gap by using an integrated economic modelling framework which combines a differences-in-differences and input-output model. With the differences-in-differences model we estimate the change in family and non-family farmer production value due to the modification in the PNAE procurement requirements. The input-output model was used to assess the effects on employment and gross domestic product (GDP), with a representation of family and non-family farming productive segments using information provided by the Brazilian Agricultural Census. Our findings indicate a positive socioeconomic effect of the program by improving employment and GDP. During the follow-up period, changes in PNAE food procurement policies generated a net increase of R$15 million in GDP and approximately 24 thousand new jobs nationally. Most of the jobs and positive economic results were greater for family farmers, whose income increased by R$ 39 million (or approximately US$ 8 million). Those gains can be attributed to the economic structure depicted in the estimated input-output, which identified livestock family production as a labour-intensive economic segment. Economic modelling suggests that PNAE has the potential to promote more equitable economic development. Addressing the identified compliance problems in several municipalities could enhance the estimated effects. Improved monitoring and provision of technical support to both local school feeding program managers and family farmers can enhance compliance and contribute to the promotion of healthier, more equitable and sustainable food systems.