O Programa Brasileiro de Biodiesel e o Risco Associado ao Preço da Mamona em Irecê, Bahia

This study aimed to assess the structural instability of castor bean price in Bahia state, Brazil, and to verify if The Brazilian National Program for Production and Use of Biodiesel (PNPB) has increased castor bean price instability. We modeled price instability by TGARCH and EGARCH conditional heteroscedasticity approaches. Results point out that castor bean prices in Bahia are structurally volatile, a price increase leads to a higher instability, and PNPB raised castor bean price volatility in Bahia. As farmers are risk averse, the PNPB became castor bean cultivation less attractive, which may have contributed to the null use of castor bean as a raw material within the program.