Farming superpower Brazil spreads its know-how
It is bringing the technologies of tropical farming to other parts of Latin America, and to Africa and Asia.
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That productivity will be crucial for the world, as demand from China and India grows. During the recent global spike in food prices, which incited riots around the world, the ethanol craze took much of the blame. Most was placed on the US method using corn. But some said that Brazil contributed to the problem by expanding sugarcane production for ethanol on fields that could be harvested for food crops.Skip to next paragraph
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Mark Lundell, the sector leader for sustainable development at the World Bank in Brasilia, disagrees. He says that because of its productivity, Brazil has actually helped keep the market supplied, and thus prices down. "In the recent crisis I don't think there is any [reason] to accuse Brazil of having contributed to world prices; they've helped to limit prices by continuing to export the main commodities," he says.
Farmer Paulo Roberto Bonato says he's proud of the role he plays in supplying the world, even if his is just a small part. Like so many others in the cerrado today, his family hailed from the south, from the state of Rio Grande do Sul, in 1977, lured by the promise of uninterrupted space and government support. The family sold their 60-hectare farm and moved onto 300 hectares in the middle of nowhere. At the time, there were neither roads nor electricity.
Since then their operation has grown to 6,000 hectares – 10 times what they once owned – where they cultivate soy, wheat, and beans. On a recent day, Mr. Bonato drove along his farm in the state of Goias, where wheat is being harvested. "My father thought, if we stay in the south, my brothers and I will never have the chance to farm one day," he says.
Their pioneering has helped turn Brazil into one of the world's greatest agricultural success stories. Last year, agribusiness overall represented $298 billion – about 25 percent of Brazil's gross domestic product, according to the Center for Advanced Studies in Applied Economics at the University of São Paulo.
While Bonato's farm is vast, it is tiny compared with the ranches in neighboring states such as Mato Grosso, the epicenter of soy production. Last year, 5.6 million hectares were cultivated there, and the state, as well as other frontier regions, are drawing investors from around the globe. In 2000, Brazil exported $20 billion in agricultural products. Last year the number reached $58 billion. Soy exports accounted for $11.4 billion. In the state of São Paulo, the heart of sugarcane production, investors interested in the ethanol market are also swarming in. Today Brazil produces 17 billion liters of ethanol fuel, or 33 percent of worldwide production.
"If you want to play the farming business game, you need to have one foot in Brazil," says Juan Soldano, a Brasilia-based consultant for international agribusiness. The global economic slowdown is likely to curb investment, especially as commodity prices fall.