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October 24, 2011

Can Brazilian agribusiness create prosperity in Africa?

by Paul Gayle*

Brazil’s booming agribusiness may have found greener pastures. The government of
Mozambique has offered a 50 year concession to Brazilian farmers to plant soy, corn and cotton in the northern part of the impoverished African nation.

This follows Mozambique’s launch last year of a $13.4 million program called PROSAVANA, in conjunction with Brazil’s agricultural research group "Embrapa" and the Japanese government, which is meant to promote industrial farming for export together with small family farming.

Brazil’s  agricultural industry sees Mozambique as a being a potential new Mato
Grosso. That’s the sprawling Brazilian state almost as large as Venezuela that is the country’s biggest producer of cash crops. The region is far more productive than the US farm belt because farmers can produce two harvests per year compared to one in North America.

So will the people of Mozambique benefit from the expansion of Brazil’s agricultural frontier into eastern Africa? Or will big agribusiness run roughshod over local farmers as foreigners have done for centuries in Africa?

I think it would be unfair and unwise to overlook the potential for technology transfer and economic development that Brazil could provide its African counterpart. But turning agribusiness into a sustainable creator of jobs in a nation with rampant poverty is going to be a real challenge – and the outcome will likely depend on clear vision and careful regulation by Mozambique’s government.

To begin with, it’s not easy to maintain small-scale family farms alongside large-scale
 agriculture. This was made clear in Brazil’s experience with palm oil plantations in the Amazon, where families who originally planned to grow dende palm alongside their existing subsistence crops but found they had to abandon food crops because of the time they had to dedicate to the cash crops.

A recent story in Folha de Sao Paulo (translated here from Portuguese) quotes a Brazilian farm industry official who suggests that some farm companies may see the move to Mozambique as a way to escape Brazil’s environmental rules:

‘‘Mozambique is a Mato Grosso in the middle of Africa, with free land, without
environmental impediments, and with much cheaper freight to China. Today, in addition to land being exceedingly expensive in Mato Grosso,
it’s impossible to get a license to deforest and clean an area,” said Carlos Ernesto Augustin, President of the Mato Grosso Cotton Producers’ Association.

A bit of history is in order here. Mato Grosso literally means “thick plants,” because the area was once heavily vegetated pasture and forest at the southern end of the Amazon.

Brazil’s military dictatorship during the 1970s, spurred by a paranoid fear of a foreign invasion, recruited farmers from the south of the country and offered them free land if they would promise to cut down what vegetation did exist. The place did not always look like Iowa.

Times have changed of course, and now there are rules about how much area must be planted with native species. A dizzying number of permits are required for farmers who want to expand their holdings. So it’s hard not  to note a hint of nostalgia for the old days in Augustin’s comments.

It may not be a coincidence that farmers in Mato Grosso this year have been the country’s leading Amazon deforesters. And it also may not be by chance that the deforestation has for the first time in recent memory been driven by the expansion of soy crops, rather than by the cattle ranching that had previously been responsible.

The cotton association says it does not yet know which of the farming companies
would participate in the Mozambique project. One would likely be Grupe Andre Maggi,  the powerful soy conglomerate owned by former Mato Grosso governor
Blairo Maggi. Other firms could include the Grupo Bom Futuro conglomerate, which has operations ranging from grains production to cattle ranching and fish farming, or publicly listed soy, cotton and corn giant SLC Agricola.

But just like it’s unfair to pass off environmentalists as elitists opposed to job creation, it’s similarly problematic to lump all agribusiness into the category of environmental predators. The possibility for technology transfer that would give
farmers in Mozambique new skills is an appealing one for a poor African country with few industries. The idea of PRO-SAVANNA focusing on both small-scale farming for local consumption and agribusiness for export suggests the idea is more well-rounded that the 1970s dictatorship-backed expeditions in land reclamation.

The Nacala region of Mozambique, the area that could be offered to Brazilian
companies, is similar to the savanna known as the cerrado that is typical of Mato Grosso. That area was identified by Nobel Peace Prize winner and Green Revolution leader Norman Borlaug as one of the last remaining frontiers available for agricultural expansion.

There’s nothing to say this partnership can’t work for both sides. But there is quite a lot to be said for avoiding the creation of another Mato Grosso in the middle of sub-Saharan Africa, where the socioeconomic conditions would likely create a region with problems much more complex than the Mato Grosso of central-western Brazil.
Sustainable Business Forum 
*‘Paul’ is an American journalist who lives in  Rio de Janeiro, Brazil, with a strong interest in sustainability. His employer would prefer that he not blog under his real name.

He maintains his own blog, called "Lungs of the Earth"  ( about environmental issues in Brazil.

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