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Why is Brazil the new America? Hint: water.

While the US farm belt is mining its groundwater, Brazil is expanding production and lowering the cost of raising food.

By James Dale DavidsonContributor / September 26, 2012

Workers harvest soybeans on a farm in Correntina, Bahia, in Brazil in this 2010 file photo. Brazil is expanding production and lowering costs at a time when America's heartland is struggling with drought and the long-term loss of groundwater.

Paulo Whitaker/Reuters/File

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 If you would like to get a firsthand peek at the bright future of Brazil, but you don’t have $7,500 for a business-class fare to Rio de Janeiro, you can learn almost as much, while having less fun, by making your way to Henry County, Ill., just east of Moline.

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Drive around and take a good look at the worst drought in half a century. Remind yourself as you look at the desiccated fields that the US Department of Agriculture (USDA) predicted a record corn crop for 2012. 

It didn’t turn out that way. Current best estimates are that the US corn crop will fall by one-sixth. As a consequence, the price of corn has risen by 60 percent to an all-time high. Meanwhile, this year’s corn crop in Brazil is up 27 percent year-over-year. Brazil’s farmers are growing rich as American farmers go broke.

The USDA’s chronic optimism notwithstanding, as you look out over the brown fields of Henry County, many of which have already been harvested for low-value silage, you see the future of American farming. It is a little understood that in much of America’s farm belt, water is in chronically scarce supply. In eight states, the Ogallala (or High Plains) fossil aquifer provides the irrigation required to prevent the return of John Steinbeck’s 1930s Dust Bowl.

In other words, American agricultural output is supported by the hydrological equivalent of deficit spending. The Dust Bowl was not dampened by greater rainfall, but by the invention of more powerful pumps that could lift water from deep underground. The Ogallala is a wide but shallow aquifer that was formed in the last Ice Age and has been drained every year since the 1930s to a far greater degree than it can be recharged by natural rainfall.

What does this have to do with Brazil? As I spell out in my new book, "Brazil is the New America," Brazil is the world’s superpower of water.

Half a lifetime ago, when I was in college, a shortfall in the US corn crop would have spelled disaster for Brazil. In those days, Brazil was a food importer. The Brazilians believed what all the temperate-centric agronomists told them – that tropical countries could not produce grains. But then something astonishing happened. Brazil transformed itself from a major agricultural importer into the world’s largest exporter of five major crops. As the Frank Sinatra song underscored, it had long been known that “there is a lot of coffee in Brazil.” What no one knew 35 years ago is that Brazil had the capacity to become the breadbasket of the world – even for what were once thought to be exclusively temperate climate crops.

While experts from the temperate zone were dismissing even the possibility that a tropical country could become a major agricultural power, the Brazilians created Embrapa, (Empresa Brasileira de Pesquisa Agropecuária), a technical firm associated with the Brazilian Ministry of Agriculture. Embrapa devised ways to turn Brazil’s vast Cerrado savanna into a highly productive region.  Among other things, they engineered a new breed of grass that greatly increased pasture yields,  allowing Brazil to become within a few decades  the world’s largest producer of beef.  

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