An assessment of the impacts of the Northeast Constitutional Financial Fund on family farming

Abstract

The Northeast Constitutional Financial Fund (FNE) has a significant share in financing family farming in Brazil’s Northeast region. In this context, this paper attempts to evaluate empirically the impacts of loans from the FNE to the National Program for Strengthening Family Agriculture (PRONAF). Based on data of these loans for the years 2012 to 2016, employment and production indicators in 2017, and a set of characteristic covariates of these establishments, we estimated generalized propensity score and dose-response functions taking municipalities that received FNE loans as units of analysis. Our results indicated positive and statistically significant marginal effects within a range of intermediate values, in municipalities receiving around R$ 0,75 thousand e R$ 1,75 thousand per establishment per year, which suggest the existence of minimum, maximum and optimal levels for the average intensity of FNE loans.