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Brazilian Presidential Election 'Less Negative' For Agriculture

Brazilians went to the polls Sunday and reelected incumbent Dilma Roussef in a tight race with less than 4% of margin. Roussef will stay four more years as the president of the largest country of Latin America.

The incumbent president won with a vast majority in the poorest states of the country, especially in the Northeast, such as Piauí, Maranhão, Ceará, and Alagoas. Opposition leader Aécio Neves won in the richest parts of the country and in all agricultural states such as São Paulo, Mato Grosso, Mato Grosso do Sul, Paraná, and Rio Grande do Sul. But his margin was not enough to beat Roussef in the overall scenario.

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The election was marked by threats from Roussef campaign on phone calls and SMS messages that wealth distribution and housing programs would end if Neves eventually wins. Neves, on the other hand, had denied those allegations and campaigned saying the Workers Party victory would bring more inflation.

As expected, the markets reacted negatively to election results this Monday. Brazil's Bovespa plummeted 5%, and the dollar value went up 3.4% to R$ 2.54 - the highest value since 2008. State-run oil company Petrobras stocks fell 15%. The multinational suffered with accusations of corruption over the year.

Experts says that it is still very early to tell what impact that will have on Brazilian agriculture, but most analysts say it will be less negative than in other parts of the economy.

"It is still hard to predict what's going to happen. But the Brazilian government has a differential compared with Argentina: it does not have big confrontations with agriculture. Cristina Kirchner attacks frontally the field, while the Workers Party here does not help, but also does not disturb overtaxing farmers," analyzed Luiz Pacheco, owner of Trigo & Farinhas consultancy.

The name of Kátia Abreu, former president of the Federation of Agriculture and Livestock of Brazil, is cited as one of the possible names for the Ministry of Agriculture. If this is confirmed, farmers tend to have more subventions and friendlier policies. Abreu made a strong position to the incumbent president, but at the last minute supported Roussef's campaign.

In terms of perspective for the U.S., political scientist Paulo Moura says that there will be more of the same.

"The United States is not a priority of this government. The priorities are the Mercosur countries (Argentina, Uruguay, Paraguay, and Brazil), some African countries, and sometimes the Middle East. I just see a different scenario if the U.S. economy has a strong recovery and Brazil sees as a way to get out of a recession [trading goods]," said the professor.

Asked about the possibilities of a confrontation with the agricultural sector or more interventionism, Moura revealed that he does not believe in it. "The farm business has been the locomotive of our economy. It would not be a smart choice to intervene more in it. She will need to make the economy grow. What we will see will be more of the same," he affirmed.

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