Brazilian Economy in the Empire: Regional Highlights

Fazenda Santa Bárbara, in São Paulo, in 1880.
Fazenda Santa Bárbara, in São Paulo, in 1880. Public domain image.

From 1822 until 1889, Brazil experienced the Imperial Period, during which the country was governed by emperors Dom Pedro I and Dom Pedro II, or by regents who assumed power in the transition between these monarchs. At this time, the Brazilian economy was based on agriculture and remained so. However, there was a change in the main products that were produced and exported by Brazil:

  • Sugar, cotton, and tobacco were important products, but they lost relevance along with the economy of the Northeast Region.
  • The coffee from the Southeast Region became increasingly important, having been introduced in the province of Rio de Janeiro, and later being cultivated in the provinces of São Paulo and Minas Gerais.
  • Rubber had a cycle of great importance from the 1840s to the 1850s, coming from the provinces of Pará and Amazonas. In fact, practically the entire global demand for rubber was met by this production.

As the Imperial Period came to an end, the great economic highlight of Brazil was the production of coffee. However, the Brazilian economy was relatively diversified, because there were typical activities in each region:

  • In the Northeast Region, the cultivation of sugarcane, cocoa, tobacco, and cotton, in addition to livestock husbandry.
  • In the Southeast Region, coffee, mining, and the industrial production of food and textiles.
  • In the North Region, the exploitation of spices and rubber in the Amazon.
  • In the Central-West Region, livestock husbandry and mining.
  • In the South Region, agriculture for domestic consumption.

The Northeastern Economy

In the Northeast, sugar had been prominent since the colonial period, and it continued to be the most important product. This was because the region had very favorable geographical conditions for sugarcane cultivation: massapê soil on the coast and a sunny and humid enough climate. The sugarcane economy depended on significant foreign investments, as the construction of sugar mills was quite costly. Thus, the Northeast often found itself affected by moments when there was little credit available in the financial market. Another problem was competition with sugar produced by the Dutch in the Antilles (in the Caribbean) and with beet sugar produced in Europe, especially during the Napoleonic Era.

Generally, work in sugar production was done by slaves, on monoculture latifundia. Besides working in the sugarcane fields and mills, they took care of their own food, through subsistence agriculture. This benefited the slave owners, as it reduced the costs of labor maintenance. On the other hand, activities complementary to the sugarcane economy were partly done by free or freed workers. An example of this type of activity was the making of sacks to store the production. For Brazilian sociologist Gilberto Freyre, these crafts make it possible to say that there was a “sugar civilization” in the Northeast, which exceeded the planting and preparation of sugarcane itself.

The Northeastern economy, however, was not limited to sugar production. In fact, as argued by Brazilian economist Celso Furtado, the “Northeastern economic complex” was characterized by a multiplicity of economic activities, with regional differentiations. Around the city of Ilhéus, cocoa was produced. In the region of the Recôncavo Baiano, tobacco was produced on small properties, with little use of slaves. In the Maranhão province, cotton was produced on small properties, usually with family or free labor — a planting that expanded and contracted according to international demand fluctuations. Finally, throughout the Northeast hinterlands, there was livestock as a “projection of the sugarcane economy,” in the words of Celso Furtado, as it provided food and transport for the region. In general, the cattle breeders belonged to the same family or were free men, who received part of the profits from the venture. Thanks to their work, the São Francisco, the main river in Northeast Brazil, was nicknamed the “river of corrals.”

Coffee in the Southeast

Coffee had been planted in Pará since 1727, from seedlings that had been obtained in French Guiana. However, only in the 19th century would a coffee economy emerge, geared towards exportation. According to Brazilian historian Boris Fausto, because coffee planting requires about 4 years to yield returns, this economy was initially financed by capital coming from the commercial expansion in the Joanine (or pre-independence) Period.

Throughout the Imperial Period, coffee production was rudimentary. It was extensive in lands, as it occurred on large estates maintained by force by their owners. Basic tools were used. Planting was misaligned, intercalating coffee seedlings with seedlings of other crops. Additionally, the allocation of labor was inefficient, for each slave took care of many coffee plants. Finally, given the lack of an adequate banking structure in Brazil, the coffee economy was intermediated by the “coffee commissioners” — responsible for financing the production, supplying the producers, and linking Brazil to the international coffee market.

However, there were crucial differences between the two main coffee-producing areas: the Paraíba Valley (in the Rio de Janeiro province) and the West of the São Paulo province. The former was an area of initial occupation, controlled by the “coffee barons” — lords who did not have political power, but soon gained it. In this area, slave labor was used, the land was not fertile, planting techniques mirrored what was already done with sugarcane, and the transport of produced coffee was done by mules. The West of the São Paulo province (Oeste Paulista), on the other hand, was an area of later occupation, especially from 1840 onwards, and was controlled by the “coffee entrepreneurs” — who had a more ‘industrial’ mentality. In this latter area, both slaves and immigrants were employed, the soil was more fertile (it was named “terra roxa”), planting techniques were more modern, and coffee transport would be done by railways.

Due to these structural distinctions, the São Paulo production could be up to twice as productive as that of Rio de Janeiro. This caused the Brazilian economy to be shifted to the Center-South — especially to the ‘New’ West of São Paulo, located around the city of Ribeirão Preto, which gained opulence and power.

During the Imperial Period, coffee had a profound impact on all variables of the Brazilian GDP. When analyzing GDP from the demand perspective, the following effects of coffee on the Brazilian economy can be ascertained:

  • Coffee became the leading export product because the Brazilian domestic market could not absorb domestic production. In general, Brazilian coffee was destined for the United States and for European countries — except England, whose inhabitants preferred to drink tea.
  • The foreign currency acquired by coffee exports was crucial for sustaining the domestic level of imports.
  • Government spending depended on taxes — particularly customs duties, which came, directly or indirectly, from coffee.
  • To invest and consume, money was needed. In a rural and non-banking economy, it also came from coffee.

The coffee market corresponds to a perfectly competitive market, in which the product has low price elasticity of demand (people do not increase coffee consumption much if its price decreases) and low income elasticity of demand (people do not increase coffee consumption much if their income increases). This situation created two problems for Brazil. On one hand, there was a tendency for coffee profits in the long run to be zero. On the other hand, in a moment of global economic growth, Brazilian exports would not increase that much.

The Productive Transition in Minas Gerais

Historically, the province of Minas Gerais was associated with gold and diamond mining. It became the most populous province following the alluvial gold rush — easy-to-extract gold, found in riverbanks and riverbeds. However, during the Brazilian Empire, these gold reserves had already been exhausted, thus mining began to be done in underground reserves. To access them, greater technology was needed, what meant that foreign companies took the lead in the exploitation of Brazilian metals and minerals.

Gold production once corresponded to 10% of Brazil’s exports, and diamond production was also significant. For example, during the First Reign of the Empire of Brazil, thanks to the improvement of diamond extraction, the Tijuco Hamlet (Arraial do Tijuco, currently Diamantina) was elevated to city status in March 1831.

As the extraction of metals and minerals became more difficult, the province of Minas Gerais diversified its economic activities. Over time, some agricultural transformation and textile manufacturing emerged, which brought significant economic progress. This growing wealth led Minas Gerais residents to increasingly defend their provincial autonomy — which would later result in the creation of the Minas Gerais Republican Party (Partido Republicano Mineiro, PRM), advocating autonomy on federalist bases.

Hinterland Drugs and Rubber in the Amazon

In the Amazon, the extraction of the so-called “hinterland drugs” (drogas do sertão) prevailed. These were native spices of the forest, such as Brazil nuts, guarana, and parsley. Since the colonial period, they were seen as an alternative to Asian products and were always valued by the international market.

During the Second Reign in Brazil, specifically, latex became the most sought-after ‘drug’ in the Amazon. In the context of the Second Industrial Revolution, American chemist Charles Goodyear had invented vulcanization — a chemical process that modifies the natural characteristics of latex, allowing it to become a kind of rubber with extremely high resistance. This stimulated the demand for rubber, for example, in the production of tires.

In Brazil, a mode of rubber exploitation based on theoretically free labor quickly proliferated: the system of dispatchment (sistema de aviamento). This system was formed by two groups of people: rubber tappers and rubber estate owners. As a rule, the rubber tappers were Northeasterners (mainly from the Ceará province) who migrated to the Amazon due to the droughts of 1877-1880. They extracted the rubber and sold it to the estate owners in exchange for supplies. Since the estate owners were the only ones who bought the rubber and sold the supplies, they exercised a relationship of domination vis-à-vis the rubber tappers.

According to historian Boris Fausto, the rubber economy gave rise to a “transitory dream of wealth”. There was the development of cities and urban services in Northern Brazil, especially in the cities of Manaus and Belém, whose populations grew significantly. Additionally, the government of Amazonas saw its tax revenue multiply, as the tax on rubber exports was of provincial nature. However, the “transitory” character of the “rubber cycle” was due to the subsequent emergence of rubber plantations in Asia, which adopted a much more productive production. From the 1910s onwards, the Brazilian rubber economy would fall into decline.

Livestock Husbandry and Mining in the Central-West

Since the Colonial Period, there were two strong economic incentives for the Brazilian population to move inland towards the Central-West: livestock husbandry and mining. The former was prohibited on the coastal strip, as a measure to preserve the fertile massapê soils (in the Northeast) and terra roxa soils (in the Southeast and South). The latter, in turn, became increasingly attractive in the Central Plateau, as easy gold in Minas Gerais ran out. Both of these activities persisted in the Central-West during the Imperial Period, although they were hindered by supply crises and attacks by indigenous peoples.

For the Brazilian government, it was advantageous to stimulate the urbanization of the Central-West as a way to secure the national borders as they were.

Agriculture in the South

The South Region had a unique feature that differentiated it from the others: the fact that it had received old waves of non-Iberian European migrants — i.e., those who did not come from Portugal or Spain. According to Boris Fausto, over time, these foreigners divided into two groups:

  • Small landowners founded colonies in cities like Blumenau (in the Rio Grande do Sul province), Joinville (in the Santa Catarina province), and São Leopoldo (in the Rio Grande do Sul province), for example.
  • Large landowners occupied large properties in the Campanha region of Rio Grande do Sul, near the Brazilian border with Uruguay. They exported beef jerky to the other Brazilian provinces.

What united both categories of farmers was the fact that they produced foodstuffs for the domestic market.


The analysis of different regions of Brazil during the Empire reveals that each region contributed uniquely to the national economic mosaic. In this period, the Brazilian economy was strongly conditioned by geographical, social, and political factors, which gave rise to a diversity of productive activities. This diversity not only reflected the different realities coexisting in the country but also the fluctuations of the international market, the transformations of the internal market, and the evolution of technology.




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