E conomic A nalysis of L aw R eview Production Chains in the Brazilian Midwest: an Economic Analysis and the Current Rules

The production chains in the Midwest are the most important and complex in Brazilian agribusiness. This study was developed with the objective of analyzing the structure and evolution of the primary production of the dairy chain in Brazil. The analysis was carried out based on information provided by official agencies (federal and state), especially through the Municipal Livestock Survey (PPM/IBGE). In the national scenario, the data show significant increases in production and productivity with a reduction in the number of animals and territories. Brazil is the world's largest food producer. The more technologically developed the region, the greater the production and productivity of the agribusiness production chain, this probably occurs in almost all production chains. ABSTRACT As cadeias produtivas do Centro-Oeste são as mais importantes e complexas do agronegócio brasileiro. Este estudo foi desenvolvido com o objetivo de analisar a estrutura e a evolução da produção primária da cadeia leiteira no Brasil. A análise foi realizada como base as informações disponibilizadas pelos órgãos oficiais (federal e estadual), especialmente através da Pesquisa da Pecuária Municipal (PPM/IBGE). No cenário nacional os dados mostram aumentos significativos de produção e produtividade com redução do efetivo de animais e territórios. O Brasil é o maior produtor mundial de alimento. Quanto mais desenvolvida tecnologicamente a região maior é a produção e produtividade da cadeia de produção do agronegócio, isto ocorre provavelmente em quase todas as cadeias de produção. Produtivas


Introduction
ilk is one of the most important agricultural products globally, being among the five most traded products, both in volume and in value. It is consumed daily, in its most diverse forms, by billions of people. As a complex food that contains high concentrations of macro and micronutrients, milk is important for human nutrition and development.
Dairy farming plays a significant role in world economic development. According to the Food and Agriculture Organization (FAO), due to its geographical conditions, Brazil has great potential to consolidate its leadership in food production, increasingly meeting the growing food demand of the population. In order to meet this growing and demanding demand, it is necessary to increase production in a sustainable way, with an increase in productivity and competitiveness indices (FAO, 2019;VILELA, 2016).
The milk production chain is one of the most complex and has great socioeconomic relevance in the national and regional scenario, generating employment and income for the numerous agents involved in the process. Present in almost all Brazilian municipalities, dairy production involves about 1.2 million producers and 3.5 million people, being an important instrument for fixing people in the countryside. The structure of milk production in Brazil presents diversity and great heterogeneity in terms of technology, productivity, quality, costs, production scale and management capacity (VIEIRA FILHO AND FISHLOW, 2017;GASQUES et. al, 2019).
The global dairy sector has undergone important structural, economic, environmental and social changes in recent decades. The search for specialization caused growth in milk production and gains in quality and productivity for this sector. On the other hand, it caused a reduction in the number of producers, since the industries began to demand the supply of high quality products.
The main transformations that took place in the milk production chain took place from the 1990s onwards, with the end of price-fixing, less State intervention, commercial opening, technification of production and installations of large industries. Other important driving forces behind these changes occurred from the reorganization of the logistics system with bulk collection, environmental legislation, chain management practices such as the strengthening of retail chains, the increase in the quality requirements of raw materials and products, the growth in demand due to the increase in income, the greater competition for production factors in traditional and frontier areas of milk due to the advance of scale agriculture and social policies to support micro and small producers (LEITE E ZOCCAL, 2016).
The search for greater competitiveness has led the milk production chain to invest in improving milk quality and in the professionalization of the sector, incorporating new technologies such as: genetic improvement; automation of the milking process; animal nutrition; improvement of herd health and management techniques; and more recently reproductive biotechnologies and the use of artificial intelligence.
Universidade Católica de Brasília -UCB Brasília-DF from a herd of 16.4 million milked cows, resulting in a productivity of 2,069 liters/cow/year. Table  1 presents the production of cow's milk, the number of milked cows and the productivity of the main producing countries.
Considering animal productivity as an indicator of the development of dairy activity, estimated in kilograms per cow/year, North Americans have the best dairy productivity in the world, with 10,463 kg/cow/year. United Kingdom, Germany and France show productivity above 7,000 kg/cow/year. The average productivity rate in Brazil has been showing steady growth over the years. The growth, in the period 2016-2018, was 20%, but still below the world average of 2,574 kg/cow/year. World milk production (81% cow's milk, 15% buffalo milk and 4% goat, sheep and camel milk combined) was approximately 906 million tonnes in 2020, up 2% from 2019, driven by by growth in all geographic regions except Africa, where production remained stable. The increase was greatest in Asia, followed by Europe, Oceania and Central America and the Caribbean (FAO, 2021).
In India, milk production reached 195 million tonnes, supported by continued growth in dairy herds, increased feed availability and improved pastures. In China, increased production on large-scale dairy farms and improved operational efficiency drove 7% growth in milk production. In Pakistan, the volume of milk grew by 3.2%, mainly due to the increase in herds. International dairy trade grew by 1.2%, driven mainly by increased imports from China (FAO, 2021).
Brazil, despite appearing in the first positions in the world ranking of milk production and presenting one of the largest herds of milked cows, when it comes to animal productivity, occupies Universidade Católica de Brasília -UCB Brasília-DF the 84th position. Brazilian productivity is five times lower than that of the United States and Israel, the first in the world, countries that exceed 10,000 liters/cow/year (FAO, 2019). This result demonstrates that Brazil has high production, however, it has low production efficiency.
Worldwide, more than 600 million people live on dairy farms, with only 0.3% of farms having more than 100 cows, which demonstrates the importance of the activity for family and subsistence agriculture. Demand has grown mainly due to the increase in population and increase in per capita consumption, related to the improvement in income in emerging countries. Exports of dairy products are highly concentrated in the European Union, the United States and New Zealand, which supply 69% of the international market and have been increasing their share over the last few years. China, Germany, France, the Netherlands and Russia are some of the world's leading dairy importers (SÓRIO, 2018).

Characteristics of milk production in Brazil
The dairy activity in Brazil evolves continuously, following the world trend, which is of consistent growth in production and productivity, with a reduction in the number of dairy farms and an increase in the number of animals in the production systems.
According to the Municipal Livestock Survey (IBGE, 2021), in the last two decades, Brazilian milk production has increased 1.8 times, from 19.77 billion liters in 2000 to 35.45 billion in 2020, the highest production registered with an increase of 1.5% compared to 2019. After a decline in the period 2015-2017, production began to grow again from 2018. The herd of milked cows decreased by 9.6% in the period between the year 2000 and 2020, reaching 16.2 million heads. Productivity showed a continuous evolution, from 1,105 liters/cow/year in 2000 to 2,192 liters/cow/year in 2020, a variation of 98.4% in the period, as shown in Table 2. Productivity has grown continuously, although the pace has slowed in recent years, demonstrating the continuous technological progress of the Brazilian dairy sector. Productivity growth illustrates an intensification in production systems, genetic improvement, associated with advances in the management and management of the activity.
According to projections from 2020/21 to 2030/31, carried out by the Ministry of Agriculture, Livestock and Supply -MAPA, milk production in Brazil is expected to grow at an annual rate between 1.9% and 3.1%. The growth in production and supply will be mainly based on improvements in the management of dairy farms and increased animal productivity (BRASIL, 2021).
The Brazilian milk production is distributed throughout the country, observing aspects of grouping. The occurrence of clusters can provide subsidies for the adequate planning of actions and the formulation of public policies aimed at the development of the entire production chain. According to the map presented in Figure 1, it is possible to verify the concentration and evolution of milk production over the last three decades. The milk production chain is distributed throughout Brazil, however, with marked differences between the producing regions. Of the 35.45 billion liters of milk produced in 2020, the Southeast region, with a share of 34.3% and an increase of 1.9% over the previous year, led the national production of cow's milk for the second consecutive year. The Midwest showed a drop of 10.3% in the volume produced in the period 2015-2020. The largest growth was in the Northeast region, with a 25% increase in production (Table 3). The South region ranked second, accounting for 34% of the total, producing 12.1 billion liters of milk. The Northeast Region was in third place, with a growth of 1.9% in its production, totaling 4.9 billion liters of milk. Milk production in Brazil is concentrated in the South and Southeast regions, which together accounted for 68.4% of the milk produced in 2020. Table 4 shows milk production and productivity in Brazil in 2019 and 2020. Minas Gerais continues to occupy the first place in the ranking, with 27.3% of national production, followed by the states of Paraná (13.1%), Rio Grande do Sul (12.1%), Goiás (9%), Santa Catarina (8.9%) and São Paulo (4.6%). In absolute terms, the biggest increase in production occurred in Paraná, with an additional 289 million liters compared to 2019. All states in the South region had a productivity above 3,400 liters/cow/year. In the national ranking, Santa Catarina, with 3,716 liters/cow/year, appears in first place, followed by Rio Grande do Sul (3,695), Paraná (3,490) and Minas Gerais (3,105). The states of Goiás and São Paulo, despite the increase in recent years, show productivity below the national average of 2,192 liters/cow/year. The biggest increase in productivity occurred in Paraná, with a significant 170 liters per cow/year and a percentage change of 5.1% in the 2019-2020 period.
The main factors that explain the growth in milk productivity in recent decades were: (a) technological changes in the sector, with an increase in the productivity of production factors due to the adoption of new technologies; (b) reduction in the number of producers, with a concentration on large producers, who take advantage of demand opportunities for those who produce a greater volume of milk, with superior quality; (c) search for animals of superior generic value, with specialized herds for milk production; and (d) greater demand in relation to milk quality and food safety, leading producers to improve management and technical efficiency .
The Brazilian production of milk under inspection (municipal, state or federal) acquired by dairies has shown steady growth over the last two decades. It grew by an average of 5.3% per year, from 12.1 billion liters in 2000 to 25.5 billion liters in 2020. While total milk production increased by 79.3% in the period between 2001 and 2020, inspected milk grew by 110.8%, causing a reduction in informality in the productive sector. At the beginning of the analyzed period (year 2000) informal Universidade Católica de Brasília -UCB Brasília-DF milk represented 38.7% of total production, in 2020 this share dropped to 28%, an indication of professionalization and modernization of the entire milk production chain in Brazil. Table 5 shows the evolution of inspected milk production and the share of informal milk. In the period between 2016 and 2020, the Northeast region showed the highest growth in inspected milk production (11.5%), while in the South (3.7%), Southeast (1.4%) and Midwest (1%) there was a less expressive increase. Production is even more concentrated in the South and Southeast regions, which together represent 77.1% of the milk inspected, following the total production, and showing the concentration of the largest dairy industries in the country. The Midwest with 12.2%, Northeast with 6.7% and North with 4% complete the volume of industrialized milk in Brazil, as shown in Table 6. The six main Brazilian states in milk production were responsible for 84.1% of the volume of milk purchased by the dairy under inspection. In absolute values, the highest increase in formal production occurred in Minas Gerais, with an additional 224 million liters. Paraná (5.2%) presented the highest percentage growth in 2020, when compared to the previous year, followed by Santa Catarina (4.5%), while the states of Goiás (-5.2%) and São Paulo (-2.1%) registered a decline in annual production (Table 7). Dairy farming is practiced throughout the national territory, with producers at various organizational and technological levels, ranging from family farming, small cooperatives to properties with a high technological level. There is great heterogeneity in the productive sector, with variations: in the size of the enterprise; the type and level of intensification of the production system; in the producer's profile; in the productivity levels of production factors; in the form and structure of market and input access (VIANA and RINALD, 2010).
The dairy activity in Brazil has been undergoing profound transformations, with the departure of producers who are unable to maintain themselves in the activity increasingly common. Comparing the 2017 and 2006 Census data, the dynamics of the Brazilian milk production structure shows the concentration of production on larger-scale properties and the reduction in the number of smaller-scale producers.
In the period 2006-2017, almost 180 thousand establishments left the dairy activity. This movement of producers leaving did not happen in a linear fashion. While more than 240 thousand establishments with production of less than 50 liters/day abandoned the dairy activity, establishments with production above 500 liters per day and between 200 and 500 liters per day significantly increased production, with growth of 166% and 79% respectively, according to data presented in Table 8. Information from Milkpoint (2021), in its survey of the 100 largest milk producers, showed that the average daily production of the Top 100 grew by 252.3% between the period from 2001 to 2020, reaching, in this last survey, a daily average of 23,057 liters , average annual growth of 12.6%. In the same period, total milk production grew 3.6% per year and the formal volume, 4.6% per year. These data are indicative of a movement towards productive concentration and scale gains, and technology has been essential for this increase in production.

Primary productive sector of the dairy chain of Goiás
Goiás is the seventh Brazilian state in territorial extension, located in the Center-West region of the country, occupying an area of 340,242,854 km², having a strategic geographic position. It is limited to the north with the state of Tocantins, to the south with Minas Gerais and Mato Grosso do Sul, to the east with Bahia and Minas Gerais and to the west with Mato Grosso. The state of Goiás has 246 municipalities and an estimated population of 7.2 million inhabitants (IBGE, 2021; IMB, 2021).
With a GDP of 208.7 billion, in 2019, and participating in 2.8% of the national GDP, the state of Goiás occupies the ninth place in the national ranking. Despite growing industrialization, agriculture remains one of the most important economic activities in the state, as it drives growth and exports. Goiás stands out in the national production, occupying the first place in the production of sorghum and tomato; second place in the production of sugarcane and sunflower; and the third in soybeans and corn. The cattle herd is the second largest in the country with approximately 22.8 million head. Pig and poultry farming are also consolidated, mainly in Southwest Goiás (SEAGRO, 2021).
With a production of 3.2 billion liters of cow's milk, resulting from a herd of approximately 1.9 million milked cows, Goiás is the fourth state in the national ranking, behind only Minas Gerais, Paraná and Rio Grande do Sul. The South Goiano (45.2%) and Centro Goiano (32.6%) regions are responsible for 77.8% of the state's milk production.
Despite the economic and social importance, the scenario of the milk production chain in Goiás is challenging, as the activity has been showing a declining production, especially in recent years. The dairy activity is present in the 246 municipalities of Goiás and presents expressive numbers.
There are approximately 72 thousand producers; 220 thousand direct and indirect jobs; GVP of R$ 4.9 billion and more than 2 billion liters of industrialized milk.  According to the Municipal Livestock Survey (PPM/IBGE) in the period from 2000 to 2020, milk production in Goiás grew by 2.16% per year, while national production grew by 3.78% per year. Considering only the period 2015-2020, the state fell by 6.4%, significantly contributing to the 10.3% decline in the Midwest region (Table 9). Milk production is present throughout the territory of Goiás. Data from the 2017 Agricultural Census indicate that Brazil has approximately 1.2 million agricultural establishments that produce cow's milk. In Goiás, there are 72,353 dairy properties, of which 69.3% are family farming and 30.7% are employers, indicating the predominance of small and medium producers. This percentage is below the Brazilian average, which is 81.2% of family establishments.
It appears that 78.8% of dairy farms in Brazil have up to 50 heads, while Goiás have only 59.1%. The state has 29.5% of establishments in the stratum of 50 to 200 heads, and 9.7% in the stratum of 200 to 500 heads, almost double the national average (Table 10). Milk production in Goiás was practically stagnant in the last decade, with production of 3.2 billion liters per year. Milk production grew by 18% in the period between 2010 and 2013, followed by a decline in the period from 2014 to 2017, recovering the accumulated loss from the year 2018, reaching in 2020 at the same level as in 2010.
The dairy herd also fell (-24.4%), from 2.48 million head in 2010 to 1.87 million in 2020. As for animal productivity expressed in liters/cow/year, there was an increase of 32, 2% in the period, reaching 1,702 liters/cow/year, still well below the national average of 2,192 liters/cow/year (Table 11). The state of Goiás is territorially divided into five mesoregions: Centro Goiano and Sul Goiano with 82 municipalities each; the East of Goiás with 32 municipalities, followed by the North of Goiás with 27 municipalities and the Northwest of Goiás with 23 municipalities, thus encompassing the 246 municipalities of Goiás, all with establishments with milk production.

Universidade Católica de Brasília -UCB Brasília-DF
Analyzing milk production by mesoregion, it can be seen that there was a retraction in production in South Goiás (-14.7%), North Goiás (-4.2%) and Northwest Goiás (-16.4) contributing to the decline of 6.4% in the total production of the state, even considering the growth of production in the Center (3.8%) and East Goiano (14.3%) mesoregions, as shown in Table 12. Sul Goiano produced 1.4 billion liters of milk in 2020, representing 45.2% of state production, with emphasis on the municipalities of Orizona, Piracanjuba, Jataí, Rio Verde, Silvânia, Pontalina and Vianópolis, seven among the ten largest producers in the state of Goiás.
Centro Goiano produced 32.6%, highlighting the municipalities of Bela Vista de Goiás and Itapuranga. The Center and East of Goiás were the only two mesoregions that showed growth in milk production in 2020, up 14.3% and 3.8% respectively. Figure 3 shows the geographic distribution and quantity produced (thousand liters) in the five mesoregions of Goiás, in 2020. The fifteen main milk producing municipalities in Goiás (Top 15 in 2020) showed an increase in the volume of milk produced in the last two decades. Considering only the period between 2015 and 2020, there was an average growth of 1.23% per year.
The municipality of Orizona, the largest producer in Goiás, showed a growth of 25.6% in relation to the period 2019-2020 and an average growth of 13.7% per year when compared to the entire period of analysis. Table 13   Considering only the period 2019-2020, the best results in milk production were obtained by the municipalities of Itapuranga with an increase of 86.6%, followed by Pirenópolis (78.7%), Vianópolis (51.4%) and Itaberaí (50.5%). The municipalities of Luziânia, Morrinhos and Rio Verde presented a 20% drop in milk production. Piracanjuba and Jataí fell by 10% and 9.5% respectively.
In the surveys of the 100 largest milk producers, carried out in the last five years by Milkpoint (2016Milkpoint ( to 2021, the average participation of 10 properties in Goiás, all with an average production above 10 thousand liters / day. In the Top 100 survey carried out in 2021, two farms had production above 30,000 liters/day; two with production between 20,000 and 30,000 liters/day; three properties with production between 15,000 and 20,000 liters/day; and three between 10,000 and 15,000 liters/day. These numbers solidify the understanding of the concentration of production that occurs throughout the milk chain. The downward trend in the number of animals occurred in the national scenario as a whole, as well as in the analyzed municipalities. The biggest drops in the herd of milked cows occurred in Silvânia (33.8%), Bela Vista de Goiás (30.1%), Itaberaí (29.9%) and Orizona (26.9%). In general, there was a decrease of 26.4% in the dairy herd of Goiás in the year 2020, according to data presented in Table 14. Considering the period between 2000 and 2020, the average productivity in Goiás, went from 1,094 liters/cow/year to 1,702 liters/cow/year, an increase of 55.6% in the analyzed period, a very low index compared to the main producing states, in addition to being below the national average, which is 2,192 liters/cow/day. The highest yields in the state of Goiás were observed in the municipalities of Vianópolis, Bela Vista de Goiás, Silvânia and Orizona, with 3,245 liters/cow/year, 3,095, 3,000 and 2,825, respectively.  To promote improvements in production systems, and consequently in the entire primary productive sector of the dairy chain, it is necessary to incorporate new technologies and professionalize the sector.

Final considerations
The dairy activity is developed in all Brazilian regions, with a significant impact on the economy of several states. The analysis of data on the evolution of milk production in Brazil, and especially in Goiás, in the period between 2000 and 2020, based on information provided by official agencies (federal and state), especially by the Brazilian Institute of Geography and Statistics ( IBGE), by EMBRAPA Gado de Leite and by the Mauro Borges Institute of Statistics and Socioeconomic Studies (IMB), allows us to infer some considerations in the national and state scenario.
In the national scenario, there were significant increases in production and productivity, with a reduction in the number of agricultural establishments producing milk and the number of animals, except in the North region, where there was an increase in the number of milked cows. The country reached a production of 35.4 billion liters of milk, an increase of 79.3%, even with a 9.6% reduction in the dairy herd.
The production of milk under inspection (municipal, state or federal) more than doubled in the analyzed period, while informal milk decreased from 38.7% in 2000 to 28% in 2020, increasing the competitiveness of the entire milk production chain.
When analyzing the Brazilian regions, the Northeast stood out with an increase of 25% in the period between 2015 and 2020, an increase of almost one billion liters of cow's milk in the total volume produced. In the Midwest, there was a drop of 10.3% in the same period, mainly due to the drop in production in the state of Goiás. The South, despite showing a drop of 2.1% in the volume produced, continues to stand out especially in terms of productivity of its dairy herd, much higher than the national average. The Southeast, despite showing a decline in production in the period from 2016 to 2018, managed to reverse the situation, closing the year 2020 as the largest producing region in the country, thanks to the good performance of the state of Minas Gerais, first in the national ranking. This scenario can be explained by the professionalization of the sector, especially by the adoption of technologies in animal genetic improvement, nutrition, handling, management, among other factors.
The state of Goiás, even occupying the fourth position in the national ranking of milk production, has been showing a drop in production in recent years, despite being a state dedicated to agribusiness. Dairy cattle farming is present in all 246 municipalities in Goiás, presenting great economic and social importance for the state, involving approximately 72 thousand producers and 200 thousand direct and indirect jobs. In 2020, milk production in Goiás was 3.2 billion liters, practically the same volume produced in 2010, thus showing the stagnation of the dairy sector in the last decade and the discouragement of its producers.
The South of Goiás, responsible for 45.2% of the state volume of milk produced, showed a drop of 14.7% in 2020. Regarding the municipalities of Goiás, Orizona continues to lead the state ranking, reaching the mark of 113 million liters, more than tripling milk production in the last two decades.
Regarding the increase in milk production, in the period between 2000 and 2020, the municipalities of Vianópolis (508.9%), Luziânia (342.8%) and Orizona (287.7%) stand out. Analyzing the data from the last year, Itapuranga (86.6%) and Pirenópolis (78.7%) were the municipalities that presented the highest growth in milk production. The municipalities of Rio Verde, Morrinhos and Luziânia showed a 20% drop in the volume produced in 2020, followed by the municipalities of Piracanjuba and Jataí, a decrease of 10.1% and 9.5% respectively.
Finally, a more in-depth analysis of animal productivity in Goiás is necessary. In 2000, productivity was 10.6% below the national average, reaching 4% in 2010, showing a period of investment and evolution of dairy activity in the state, from then on, the scenario drastically reversed. In the last year analyzed, the difference reached the mark of 490 liters/cow/year, 28.8% below the national average of 2,192 liters/cow/year. This scenario is very worrying, as it reminds us of the idea of inefficient use of productive resources, lack of investment in new technologies, and public programs and policies (credit, technological and managerial innovations, genetic improvement, animal health, safety and quality of milk, etc.) aiming at the development of the primary productive sector of the milk chain in Goiás.