The agricultural mechanization decision in many developing countries is complicated by the existence of a large agricultural population, high rural-urban migration rates since the Second World War, and a capital intensive industrialization process. All of these factors reduce the ability of the non-agricultural sector to absorb labor. More over, many developing countries may have affected mechanization decision in agricultural by their intervention in factor and product markets. Brazil is an ideal country to examine the determinants and effects of agricultural mechanization. Brazilian mechanization has occurred at an extremely rapid in the post-War period and Brazilian has actively intervened in its factor markets. The major results of the thesis area: 1. Timeseries analysis indicated that the subsidized financing was the statistically most significantvariabel determining investment in tractors and its effect swamped the relative price variables. This financing of the Bank of Brazil was provifrf at negative, real interest rates. 2. The elasticity of substitution between labor and tractors was statistically significant and greater than one in most cases hence shifts in relative factor prices have had a large effects upon factor proportion. The factor proportions choice between tractors and labor was statistically associated with agricultural wages, the level of bio-chemical expenditures per hectare, the crop mix, and the distribution of crop farm size. Concentrations of crop area on large farms increased the (...).

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