This paper deals with human capital and firm-level performance in agriculture. In this sector firms are comparatively small. Management, capital provision and labor supply are concentrated on one individual and his immediate family. Many tasks have to be done, and decisions have to be worked out and carried through. Mistakes are made, not only on what crop variety to plant, but also on how much land and capital to allocate to different activities.

Difficulty in decision-making is compounded by the impact of climatic variability on resource productivity. Indeed, in agriculture, a given input bundle can result in very different output levels according to the level at which random factors operate. Uncertain resource productivity coupled with imperfect capital markets result in a "bad" year seriously compromising the flow of funds to the household.

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These guidelines aim to provide RNRKS programme managers and project managers with sufficient information on rural finance to judge the extent to which project design may have to take it into account. This includes in particular the possibility that the characteristics of rural finance may pose a constraint to the uptake of research results.

Brazil is one of the world’s top ten economies, with a population of 160 million and GDP of over $700 billion. It is an upper middle-income country, but has a highly inequitable income distribution and large numbers of poor people.

The Cardoso Government gives priority to reducing social inequalities, but progress on this is relatively slow.

There is a major agenda of government reform, although again progress is slow.