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Q&A: Growing Brazil with yields, not new land
Roberto Rodrigues was Brazil’s minister of agriculture from 2003 through 2006, and he’s recognized as one of that country’s leading authorities on agriculture. Like his father and grandfather, he is an agricultural producer and engineer. Currently, he serves as a visiting researcher at the University of Sao Paulo.
Successful Farming magazine asked him about the present and future of Brazil as a competitor of U.S. agriculture.
SF: The growth of agriculture in Brazil was partly driven by new land clearing in the Cerrados [central plateau] and some in the Amazon basin [north]. How will growth continue?
RR: The growth of production in Brazil can mostly be explained by intensification. New land is a much less important factor. Grain acreage increased 40%, while production increased 220%. Similarly, poultry production grew 450%, and pigs grew 230% over the last 20 years. The fact is that 61% of the land in Brazil is still primary forest; 21% is in pastures, mainly for cattle. The contribution of new land in the last few years has become irrelevant, less than 10,000 acres.
SF: Brazil has been very successful with large-scale industrial-type agriculture. What about small family farms in Brazil? What do they grow? How are they doing?
RR: Medium and small farmers struggle, confronted with higher costs and lower prices for commodities. This is not unlike many other countries. National policies support family farms with education, access to credit, and insurance and tax benefits. Social programs preferentially buy food from family farms. In rural cooperatives, 80% of the members are family farms, and they account for 48% of agricultural production: 36% of the soybeans bought by Cargill in Brazil come from smaller farmers. The co-ops are aggressively moving into added-value and transformation ventures. They are strongest in coffee, wheat, meat, corn, and soybeans.
SF: Brazilian exports are mostly bulk commodities, rather than value-added crops. How and when will Brazil initiate the export of higher value products?
RR: This is largely decided by market forces; the government plays no role. Strong local consumer demand has boosted grapes and vegetables outside of the Cerrados grain belt. Cooperatives are very active in promoting higher value crops.
SF: U.S. farmers know of your soybeans, beef, and coffee. What other Brazilian crops should we be aware of?
RR: Sugar and ethanol are very important products. Like in the U.S., the profitability of sugarcane-based ethanol depends on the cost of the feedstock. Corn is also a growing crop, especially since Brazil has the unique double-cropping system called safrinha [corn after soybeans in same season]. Forestry products are important, too. I think American farmers should understand that the tree crops for paper and lumber are grown on dedicated plantations with no impact on the Amazon basin.
SF: American farmers do not know agricultural names or brands coming out of Brazil. Are there Brazilian counter-parts to John Deere and Cargill in the making?
RR: Yes. Brazil has mostly focused on commodities, but lately JBS (meat) and AMBEV (beer) have been more aggressive. In poultry and pork, meat companies like Aurora and BRF Foods might one day go global. In equipment, Jacto, Stara, Marchesan, and Jumil have competed with the market penetration of the U.S.-based big three. Jacto, in particular, has world-class technologies and has penetrated many markets in the Southern Hemisphere.
SF: By the year 2025, what will have changed in Brazilian agriculture?
RR: Predictably, the Cerrados area will become a meat exporter, not just a soybean producer. One may hope that by that time, the issue of transportation logistics will be resolved. Also, stability and risk-management policies will be in place to dampen the impact of variability of commodity prices. Brazil is a player in world food production, and we will become even more important.
SF: What else do you think U.S. farmers need to know about Brazil?
RR: In the next 30 years, our Cerrados area is where it will be decided whether the world can feed itself or not. It is the only land reserve left for the world.
Editor's Note: Mark Vanacht is a freelance contributor to Successful Farming magazine.