Brazil Poised to Become Agricultural Superpower
March 7, 2011 | Robert Puro
“Brazil stands on the brink of becoming an agricultural superpower.” So says the Financial Times. Motivated by fears that reliance upon imported food staples would prove financially unsustainable, Brazil, has worked tirelessly over the past four decades to augment its domestic agricultural production through major investments in agriculture research. As a result of investment in farm technologies and practices, grain production yields have grown by 152% in the past 20 years. Since 1990 Brazil’s annual soybean output has increased from nearly 15 million tons to over 60 million in 2010. Brazil, with its abundant and fertile lands, agriculture technology and innovative farming practices, along with its conducive climate, has the potential to play a major role in feeding a world population that is expected to increase by 40% to nearly 9 billion by 2050 according to the UN Population Division.
Evidence of Brazil’s agricultural ingenuity and scientific research at work can be seen in the work done by Embrapa, a public company whose mission is to provide feasible solutions for the sustainable development of Brazilian agribusiness through knowledge and technology generation and transfer. Embrapa’s main achievement, thus far, as noted in The New York Times article “Scientists Are Making Brazil’s Savannah Bloom” has been the transformation of the cerrado, a vast swath of notoriously infertile savannah stretching more than 1000 miles across the center of Brazil, into astonishingly productive agricultural land.
Through applying a mixture of phosphorus and lime to cerrado soil, Embrapa transformed both the soil and the overall agricultural economy of Brazil. The company subsequently developed numerous varieties of Soybeans suitable for planting in the cerrado region. Brazil now ranks as the top exporter of Soybeans in the world.
According to the article “Brazil’s Agricultural Miracle” in The Economist, Brazil has also emphasized sustainability as a key to agricultural growth and has encouraged small farm growth and organic practices. Brazilian farmers tend to avoid monoculture and chemical fertilizers. Farmers receive no subsidies and thus buy inputs and sell crops much more efficiently and according to demand from world markets.
Growth from Foreign Investment
Agricultural market growth has also come from increased foreign investment in crops. A recently introduced new law in Brazil that put curbs on foreign ownership of agricultural lands, however, may hinder foreign agricultural investment and in turn impact market development. The law limits new purchases of land by foreigners to 600 to 12,300 acres, depending on the region. Purchases above that threshold face bureaucratic hurdles that, once cleared, only allow foreigners to own at most 25 percent of a municipality’s land base. The laws are meant to protect the perceived risks to Brazil’s sovereignty that might arise as a result of some other country owning a large portion of its land.
Foreign agriculture investment issues aside, Brazil, with its staggering overall economic growth (7.5% GDP growth in 2010), and investments in domestic agriculture research and technology appears poised to become an agricultural superpower.