Brazil, the agribusiness giant

Published 24/06/2016 por Isis Magri Teixeira

The sector’s evolution has resulted in the country changing from importer to become one of the biggest exporters of agricultural products in the world

Over the last four decades, Brazil has changed from being an importer to become the second largest exporter of agricultural products in the world. According to the Brazilian Confederation of Agriculture and Livestock (CNA), during this period the country has tripled its land productivity, becoming “an agribusiness giant”. Today, the sector accounts for 23% of GDP, 27% of jobs and 44% of Brazilian exports.

According to the Ministry of Agriculture, Livestock and Supply (MAPA), Brazil is the third largest global producer of chickens and has the second largest cattle herd in the world, with more than 211 million head. The country is also the leading producer and exporter of coffee, sugar, sugarcane ethanol and orange juice. Furthermore, it occupies the top position in external sales of the soya complex (meal, oil and grain). The 21st century witnessed the industry’s rapid expansion. According to the latest projections published by MAPA, grain production should expand from 100 million metric tons in 2000 to 193.8 million metric tons this year. The total area planted – currently 67 million hectares – will increase to 75 million hectares by 2023, according to the Ministry. Soya beans alone will account for nearly 7 million hectares. As a result, it is expected that over the next ten years grain production will increase by 20%.

The fact that the sector has experienced economies of scale has contributed to this evolution. Crops are now planted in large holdings, farmers have become professional and the agricultural equipment industry has expanded. “New production techniques were adopted, such as direct drilling with crop rotation, allowing the producer to harvest two crops per year,” says Ivan Wedekin, director general of the Brazilian Commodities Exchange.
According to the Brazilian Agricultural Research Institute (Embrapa), inputs such as seeds, fertilizers and pesticides were responsible for almost 70% of the growth of agricultural production over recent decades.

For the growth projections to materialize, Brazil will have to overcome bottlenecks in infrastructure. The government, which has already resumed public bidding for concessions of highways and ports, is now beginning to review the model of railroad concessions. Yet another important step for the country to maintain the well-deserved title of “agribusiness giant.”

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