BRAZIL and AGRIBUSINESS

In recent years Brazil has consolidated its position as one of the world’s principal producers and exporters of foods and fibers. Its increasing share of international agribusiness trade is the result of a combination of entrepreneurial efforts, massive investment in research, infrastructure and technology, and stringent regulations governing the health and quality of products.

Brazil has abundant resources. Variations in climate in its diverse producing regions have enabled the development of diversified agriculture and production of both temperate and tropical crops. Currently, some 50 million hectares are planted with annual crops, and 20 million hectares with perennial crops or planted forests. There are, moreover, 220 million hectares currently used as grazing land. The introduction of new and modern cattle raising techniques will enable utilization of a part of these areas for general farming activities.

Map 1 shows the region of the Brazilian savannahs, which is currently the major area of agriculture expansion in Brazil. Such expansion is facilitated by relatively flat topography, which is imminently suitable for mechanized agriculture and makes possible enormous economies of scale. Climatic conditions and rainfall patterns in cerrado regions are relatively predictable throughout the year, and enable two harvests per year without irrigation. The production technologies for farming in such conditions are well known, and increasing use of No-Tillage methods (that dispense with plowing, and thereby avoid erosion and protect the soil) are helping reduce fuel costs and favouring carbon sequestration.
The possibility of two harvests in the same year, without irrigation, provides a great competitive edge for Brazilian agriculture. To take the example of corn (maize) which, as a consequence of the use of improved crop-management technology, one quarter of the annual crop is produced in a second harvest (known as safrinha), sown after the soybean harvest.

Map 1 – The Brazilian Cerrado Region (Millions of ha)

The Brazilian soybean crop, which amounts to 58 million tons per year, is the principal component of Brazil’s grain harvest, which amounts to 130 million tons. Brazilian stock farms that produce so-called ‘green cattle’, raised exclusively on a diet of grasses with mineral salt supplement, have found willing buyers in markets throughout Asia, Europe and the Americas. Brazil has the world’s largest commercial cattle herd, amounting to some 200 million heads. A recent United Nations study forecasts that Brazil is destined to become, until 2015, the world’s largest food producer. Projections also show that Brazil will shortly be the world’s major producer of cotton, and also of biofuels made from sugar cane and vegetable oils.

Table 1 shows Brazil’s place in the 2006 world ranking.

Brazil’s immense potential for agribusiness, allied to its installed capacity and the renowned creativity of its researchers, means that there is vast scope for foreign and private investment in agricultural development.