To understand Brazil today one needs to start with two facts: In 1970 this South American country, with area larger than the continental U.S., could not feed its own people. Today it is the second largest exporter of food and a leading exporter in beef, sugar, orange juice, coffee and, most important, soybeans.
That compelling scenario neatly set the table for our tour that began yesterday here in Londrina, in the state of Parana in Southern Brazil. I’m here with 30 American farmers on a 10-day journey that will take us to farms and research stations in a quest to learn where Brazilian agriculture is today and where it is going in the future.
Mass soybean harvest in Brazil, with following no-till plantings. 75% of row crops in Brazil are no-tilled.
Traveling with us for the first few days is James Thompson, our Farm Futures South American blogger. James farms north of here in Tocantins, and is a University of Illinois grad like myself. He came here 14 years ago and has written and consulted on South American agriculture ever since.
How did Brazil become a commodity powerhouse? Ag research led the way.
Forty years ago it was a country of untapped resources. The people were poor and most of the interior lands were undeveloped scrubland.
In 1975 the government established Embrapa, Brazil’s agricultural research engine, with the specific goal to develop soybean cropping for tropical conditions. By the ‘90s it had solved that riddle and the country began to boom with soybean production. Embrapa has since moved into other research areas including wheat and sunflower. It has 70 full time researchers with masters or PhDs all over the country in 45 research centers.
How could a little soybean revolutionize a country? Soybeans gave Brazilians a reason to move inland. Until the ‘70s its main industries were on the coast.
“When Embrapa was created, Brazil’s Midwest was a wasteland. No one lived there,” says Amelio Dall’Agnol, head of communication and business for Embrapa. “Then as lands were cleared for row crop production, we began to get roads, communications, and cities, all because of soybeans – lots of soybeans, right there in the cerrado (savannah).” They developed meat production, which helped improve diets and move Brazilian GDP higher.
Brazil began with less than 5 million acres of soybeans in 1970; today it plants over 62 million acres to soybeans, with yields similar to our own. Today agribusiness is responsible for 25% of Brazilian GDP. Last year 40% of the country’s total exports were agriculture-related; and, 35-40% of Brazilian employment is in agriculture. The country exported $22.4 billion worth of soybeans in 2011, made $18 billion in meat sales, $17.8 billion in sugar/ethanol sales, and $7.5 billion in overseas coffee sales. Brazil’s ag trade surplus was $77 billion last year.
For as much as Brazil has achieved in the past 40 years, it is only skimming the surface of its potential. The country still has millions of acres of land untouched for potential production. It has favorable climate and mostly good rainfall. It has water, despite the drought that dinged yields in Southern Brazil so badly this year.
Would any of this have happened if Brazil’s government had not established Embrapa with its mission to make soybeans work in the tropics? Who knows? In any case, it’s a compelling reason why any nation should invest in its own food and agricultural sectors. It proves just how important agriculture is to a nation’s wealth and national security.
Source: Farmfutures.com
Contact the Gateway to South America team to learn about the best investment opportunities in the region. The company is a benchmark for foreign investors wishing to invest in Argentina, Brazil, Uruguay and Chile, providing expert advice on property acquisition and investment tours.
The Gateway Team – When You are Serious About Property
www.gatewaytosouthamerica.com
/1.png)
