Brazilian agribusiness, source of strength and controversies

With its vast production of soy, meat, cotton and now too corn, Brazil has emerged as a world power in agribusiness, a thriving sector that at the same time garners criticism, especially for deforestation in the Amazon.

The Ministry of Agriculture recently announced it: the value of Brazilian agricultural production is expected to reach a historical record of 1.15 trillion reais (approximately US$234 billion) this year.

Agribusiness, which encompasses agricultural production but also other activities in the sector such as the sale of inputs and the food industry, is responsible for a quarter of Brazil’s GDP.

Likewise, it accounted for half of the country’s exports in the first semester.

What explains this strength?

Fifth largest country in the world in area, Brazil rose to the podium of world agricultural powers in the last 30 years.

The South American giant is currently the world’s largest producer and exporter of soybeans, sugar and coffee. It is the main supplier of beef and chicken, and second of cotton. This year it will also dethrone the United States as the world’s leading corn exporter.

Since colonial times, Brazil’s development has revolved around the land: first there was sugar cane, then cotton, the rubber rush and finally the coffee cycle, which lasted more than a century.

But the turning point came in the 1960s-1970s, when the military dictatorship in power launched a “green revolution” which stimulated the expansion of the agricultural frontier towards the northern Amazon and the Cerrado savannahs (central-west).

It was in this context and driven by Chinese demand that soybeans expanded, used massively to feed animals for consumption in the world.

“Genetic improvement work, soil acidity correction and fertilization techniques” and the development of pesticides allowed soybeans, followed by corn and cotton, to expand to the tropical regions of the country, the Brazilian Agricultural Research Company (Embrapa) explains to AFP.

The development of cultivation without having to remove the soil and the introduction, in the early 2000s, of transgenic varieties – which today occupy between 80% and 90% of the areas dedicated to soybeans, corn and cotton – allow Brazil to chain two and up to three harvests per year. The production of these crops tripled in 20 years.

Does success have a price?

But the model that allowed this expansion faces many controversies. Between 2019 and 2022, agribusiness maintained a close relationship with the former far-right president Jair Bolsonaro.

When the leftist Luiz Inácio Lula da Silva returned to power, he promised a tough line against deforestation in the Amazon (which skyrocketed during Bolsonaro’s mandate) and the protection of indigenous lands, two issues sensitively related to the expansion of agribusiness.

Agriculture, pesticides and the consequences of their use on human health and the environment, and transgenics, also came into focus in the negotiations with the European Union, which conditions the conclusion of the free trade agreement reached with the bloc. regional Mercosur to environmental guarantees.

What are the prospects?

While advancing his promise to eradicate deforestation by 2030, Lula will have to compromise on agribusiness, supported by a powerful lobby in Congress.

The former union leader, who needs tax revenue to finance his social programs, is trying to open new markets for Brazilian producers, negotiating trade agreements, especially with China, his main partner.

“Brazil could be the largest producer of soybeans, corn, cotton, coffee, anything it wants (…) because it has land, sun, water and, above all, technology”Lula said this Tuesday in his weekly YouTube broadcast.

The agricultural sector, for its part, is trying to improve its credentials so as not to scare away international consumers, who are increasingly concerned about consuming organic products.

“Agricultural companies work very hard for traceability. It is something fundamental to value their meat for exports”says Caio Carvalho, president of the Brazilian Agribusiness Association (ABAG).

André Nassar, president of the Brazilian Association of Vegetable Oil Industries, highlights for his part the agreement concluded this year with the National Association of Cereal Exporters to reconcile the cultivation of soybeans and the protection of the Cerrado.

But for environmentalists, this is not enough: “Zero deforestation would be the most relevant step,” says Cristiane Mazzetti, spokesperson for Greenpeace Brazil.

“Large-scale monoculture harms biodiversity. Other models, such as agroecology, should be prioritized”he adds.

And this is urgent, since the effects of climate change already affect agricultural yields.

“We must move towards a sustainable model”says Britaldo Soares Filho, an expert in environmental systems modeling at the Federal University of Minas Gerais.

“By driving environmental degradation, agribusiness is harming itself” to himself, he adds.