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August 20, 2008

Brazil experiences boom in agricultural productivity

On the family farm run by Joao Baggio Neto in the southern Brazilian state of Parana, you get some sense of the determination and competitive spirit that motivates Brazil's farmers. Joao Baggio says the most important improvement in his part of the country in the past decade has been the increase in productivity.

Blessed with what often seems like endless amounts of land and a good climate, Brazil has grown in recent years to become an agricultural superpower.

"We came from a situation where we produced 5,000 kg of corn by hectare, while today it is 10 to 12,000 kg per hectare of corn," he says. "So we have doubled productivity in 10 years."

So it is no surprise that the government launched its latest agricultural plan in the state of Parana, famous for its grain-producing potential.

President Luiz Inacio Lula da Silva told farmers that concerns about food prices and shortages around the world offered them an exceptional opportunity.

"We have more Chinese people eating, we have more Indians eating, we have more Africans eating and we have a lot more Brazilians eating. All this, which is treated by the press as if it were a crisis and is sold to the world as if it were a crisis," he said. "Without any arrogance or self-importance, we Brazilians need to confront what for others is a crisis, as an extraordinary opportunity to truly transform ourselves into the granary of the world, as many people have long predicted."

Joao Baggio is not a fan of government policy, but he does not disagree with the president's aspiration. "Without any doubt, there is potential to produce if the government doesn't get in the way," he says. "We are not even going to say help - if they don't get in the way a lot, year by year the producer is generally increasing production. If you talk about central Brazil, there are still a lot of areas to be exploited, so I don't have much doubt."

In fact, of the 350 million hectares of land available for agriculture across Brazil, analysts say only 70 to 80 million hectares are being used, and the potential for growth is enormous. But there is also a consensus that the country has to deal with some key weaknesses, such as poor infrastructure - mainly in its ports and roads - and a high level of dependence on expensive imported fertilisers.

But for Professor Marcos Fava Neves of the University of Sao Paulo, the president is right to think on a grand scale, based on the country's recent achievements. "What we have seen in the last 10 years is a quiet revolution happening in our country, mostly in agribusiness production," he says.

"We came from being an irrelevant international market participant to be one of the world's major food and biofuel suppliers today. So if you look at what happened to our agriculture in terms of beef exports, poultry exports - again we were irrelevant, and now we have the position of largest exporter in the world in major food crops."

At the opening for the annual gathering of Brazil's major agricultural producers in Sao Paulo, a video presentation boasted of a record harvest - while the prediction for this year is that external sales of agricultural products could amount to $74bn, an increase of 26% on last year.

Outside the conference hall, the main point of discussion was a new report suggesting climate change could cause a significant drop in Brazil's food exports - perhaps as much as a quarter for soya over the next 12 years.

However, Agriculture Minister Reinhold Stephanes was adamant this concern over climate change could be addressed.

"The impact will start to emerge with more intensity within 20 to 30 years, and until then, we should be preparing for this," he said. "The perspective for the moment for future harvests is highly productive. So Brazil has the potential to continue growing around 5% to 6% a year in terms of increasing harvests. We are going to effectively maintain this rhythm in the coming years without any problem."

Brazil's major producers also insist they can achieve growth in a sustainable way, even though activities such as cattle-ranching have been widely blamed for deforestation in the Amazon.

Watching the conference proceedings was Paulo Adario, campaigns director for Greenpeace, who says Brazil must meet its ambitions while protecting the environment at the same time. "Greenpeace is not against food," he sai. "We are not against expanding the Brazilian capacity for producing food, and helping Brazil to develop this country. You can increase the food capacity through technology, through better practices, through occupying areas that are already degraded, to investing in better crops. But you can not increase your productivity at the expense of the environment, because the global market doesn't accept this price any more."

Prof Neves says even by staying away from sensitive areas such as the Amazon, a huge amount can be achieved.

"If we have the right investments coming on for logistics, for infrastructure and for technology and land development, the country can multiply by two-and-a-half, three times the actual production in the next 10 years."

Prof Neves says, "If you talk about the next five years, we are now producing 130 million tonnes of grains. We can easily go to 250 million tonnes. We are now producing seven million hectares of sugar cane. This can go to 20 million hectares, helping to supply ethanol to the world. We are only exporting $400m of fruits; we can go to $3bn of fruits."

It is not only in Brazil that Prof Neves sees potential. "Next up is Africa. I think for Africa, this could be a redemption, in terms of inclusion of people in production systems and making Africa produce food and biofuels for the world."


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