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Irrigated Farming in Bahia Brazil leading the way to Sustainable Farming

The outstanding performance of the Western Bahaian fields in the current crop year now coming to a close, registered with precision and accuracy in the edition of the Western Bahian Yearbook – 2009/10 Crop, was the final  touch to a period of impressive achievements. The first of which was the celebration of the 20th anniversary of the Association of Bahian Farmers and Irrigators (Aiba). There is a lot to cheer about. It is not just a matter of feeling proud of the survival of an association, among so many others that disintegrate overnight in such a transitory world, but our pride lies in the entity’s active role, whose achievements are the result of earnest endeavour, and they are perceptible, recognizable and measurable. #adp02

Two of them are much evident in 2010, and, being the result of earnest effort, give us reason to celebrate, but not to sing victory, nor to give up. Both are steps against judicial insecurity, which has become one of the strongest threats against the activity throughout the country. The first of the two was the institution and regularization, after 18 years of serious work, of the Plan for Adjusting and Regulating all Rural Estates in the State of Bahia and its regional counterpart, the Sustainable Western Plan. It is an initiative by the State Government with the direct participation of the farmers in the West, represented by Aiba. It benefits the entire State of Bahia, to the extent that it removes the bureaucratic hurdles from such processes as vegetable suppression and environmental licenses needed by the farmers, helping with putting an end to the vegetation cover that was threatening the continuity of production in one of the most important agricultural hubs in the nation.

Another victory was the so-called Anticipated Guardianship obtained by Aiba, on 11th March, which suspended the Mandatory Rural Social Contribution – Funrural, for the upwards of 1.2 thousand associate members, corroborating the 11-year thesis, which maintained it was an unconstitutional fee. Common in both cases is the long time battle, the effort they demanded, the amplitude of the scope of their effects, professionalism and transparency. Day after day, an array of victories are credited to Aiba’s decisive action. Bahia Farm Show comes as show window for all of them, without any doubt, reason for much pride. At its 6th edition, it already stands as one of the most important agricultural technology and business fairs all over the country, exceeding itself year after year.

Among so many things to celebrate, there is reason enough to hope for every stone removed here to contribute towards the development of the Brazilian agricultural sector. This one, more than the basis, has proved to be the real stay for the Nation. Twenty years ago, a seed of transformation was cast on an area of incipient Brazilian agriculture. Ideas were put forward and the Association of Bahian Irrigators (Aiba) was born. It eventually turned into a powerful uniting factor and greatly encouraged the production sector to implement a new production model, which turned western Bahia into a power and reference in the State and Brazil. Agricultural activities were still at a fledgling stage and the potential of the Cerrado, typical of the region, was little explored. Local leaders decided to trigger changes to this reality and began to strive for development, betting on irrigated farming systems as the right solution.

A decisive meeting was held on 22nd June 1990, at Fazenda São Francisco, of Belap Agropecuária, in Barreiras, where the association was created and its major purposes were defined. In addition to representing and working on behalf of the sector, from the very beginning the objectives included strong support to technology and exchange of information and experience; respect for the environment; studies on the use of the regional water resources for irrigation purposes and their rational use; improvement to the irrigation methods and equipment, as well as knowledge interchange with similar entities or geared towards activities of interest to the goals of the association, as well as the creation of a database available to all members. Initially, a 16-member committee was set up, who became the founder members of the entity.

The general assembly that officially laid the cornerstone of the association, with the approval of the social statutes and the election of the members for the board and Aiba’s consultative, technical and fiscal council, was held on 3rd August of that year. The first elected president, Humberto Santa Cruz Filho, who was to remain 18 years in office, immediately took action and soon showed what the association’s intentions were: to conquer a representative and defence power defined by the new association and generate “ new strength intended to pave the way for development in Western Bahia”.

MAKING STRIDES

The institution was later to attract (from 1996 onward, but legally approved in 2004) other dryland producers, altering the name to “Association of Bahian Farmers and Irrigators”. The acronym Aiba, nevertheless, was preserved, and so was the urge for action and mobilization, responsible for the growth of the association and the entire region. From the margins of the São Francisco River to the borders of the states of Goiás, Tocantins, Minas Gerais and Piauí, the association was always there and a new reality was born, making all its members proud of its 20-year history. From the initial 16 founder members the association progressed to more than 1,250 associate members now. At the start of the association, in November 1990, there were 100 irrigation pivots in operation, but this number soared considerably over the decade (400 in 1993; 547 in 1995 and 660 in 2000), reaching the expressive number of 860 units in 2010, most of them for cotton farming operations.

Agricultural production volumes that remained at 803 thousand tons in the 1992/93 crop year, are estimated at 4.7 million tons in the 2009/10 season, up almost 500% from the previous years. With regard to coffee and cotton, whose first available figures date back to 1995/96, when they were insignificant in the region, gigantic strives were registered, with incredible variations of 18,000 percent over the period. The numbers speak for themselves when it comes to the extraordinary development, a dream made real in West Bahia by Aiba pioneers, jointly with the farmers and all other partners throughout the region, and everything happened in just two decades

WITH SUSTAINABILITY

The environment, in turn, deserved great heed since the beginning of the activities, with regard to licenses and operational uses, river basin committees were set up, guidelines on environmental management and the implementation of a sustainable model in the Cerrado region. In the year 2001, a Chemical Packaging Receiving Station, also referred to as Clean Field Station, was set up, an initiative that made news all over Brazil. In 2009, the moves in the area ended up with the signing of an advanced protocol of intentions with several organs, called “Sustainable West Plan”, transformed into state law in 2010, for environmental adjustment of all rural properties around the region.

Within the same context, social responsibility initiatives are part of the everyday chores of the farmers. They start with labor relations and progress to community aid, whenever and wherever necessary. The context includes moves like Christmas Solidarity, delivery of school supplies and seedlings, and the creation of the Project + Life program: Food Complementation, in 2003. The latter progressed to a comprehensive educational and citizenship support program in the 2006/07 season, conducted jointly with Banco do Nordeste, referred to as Integrated and Sustainable Development Fund of Bahia (Fundesis), which assists more than two thousand people, through social organs. Also noteworthy are the advances in product-oriented technology assistance, including information, training, services and events. Within this purpose, it is worth mentioning the great support towards activating the Western Bahian Development and Research

THE WEST RISES AND SHINES

Aiba has also had remarkable participation in exhibitions, fairs and congresses, always in search of knowledge exchange, while projecting the region and its products at home and abroad. Meanwhile, at its own initiative, integration moves were conducted with other organs, including important events, such as the 2nd World Coffee Conference, which attracted representatives from over 70 countries, members of the International Coffee Organization (ICO), in Salvador, in 2005, as well as several annual promotions involving this crop. Especially noteworthy is the Agrishow LEM event (paying homage to the late Luís Eduardo Magalhães), launched in that town in 2004, which became Bahia Farm Show, in 2008. It is viewed as the biggest agricultural technology and business fair in the North and Northeast, exhibiting the progress of agriculture in Western Bahia, which made strides over the two past decades, running parallel with the arrival and the success story of its most relevant representative entity, the Aiba.

Support Foundation (Bahia Foundation), devoted to several research and technology activities. The result was the creation of a specific center, the Western Bahian Technology and Research Center (CPTO-BA), in 2009, and in the implementation of the “João Barata” Irrigated Coffee Experiment Station, in the past decade, along with numerous actions and programs in the field of Phytosanity, for the control of pests and diseases of several crops across Western Bahia Aiba’s strength and persistence over the 20 years of its existence account for numerous conquests and benefits to the growers the association represents and the regions where these farmers operate, factors that leveraged the progress achieved so far. Firm and decisive action of the association’s officials never failed, in an array of local, state and national affairs, frequently working in partnership, always focused on preserving the interests of Western Bahian farmers.

In the very beginning, good results were achieved with regard to the use of State Value Added Tax (ICMS) credits on the purchase of production inputs, like diesel oil. Exemptions of taxes levied on energy were also achieved and, later, of taxes on public lighting. Still in the taxation area, a huge fiscal incentive was granted to crops, like cotton, through the Cotton Growing Incentive Program (Proalba) and the Fund for Cotton Agribusiness Development (Fundeagro). In 2010, a judicial fight that started back in 1977 was won, consisting in exempting the growers from the Rural Social Fee (Funrural). Lawsuits became common practice, with assistance and specialized services for growers on different fronts, like rural credit, education salary, price policies, the environment, road and export conditions, among others, “inviting heated debates” and seeking solutions. S

till, with regard to rural credit, a special focus was launched from the beginning on the administrative scope, involving the question of resource allocation, indebtedness and fees. The first private accommodation endorsement was also signed for the production costs of the 2000/2001 cotton crop, with Banco do Nordeste. And in the commercialization area, since 1997, access was granted to the Production Flow Prize (PEP), assuring minimum prices for corn. The production infrastructure for a new agricultural frontier also required substantial efforts and produced good returns to the entity. Electrical energy for rural communities lacking this resource was materialized through huge works, like the 1.16-thousand kilometer transmission line in the Rio Grande Basin. Likewise, the installation of a modern phone operation center in Mimoso do Leste, now known as Luís Eduardo Magalhães, in the 1990s, aroused great repercussions, too. On the other hand, transport logistics demanded an array of negotiations and showed significant results on roads like “Corredor ou Anel Soja” (Soy Corridor or Ring), in the improvements to trunk roads and side roads, while a recent state protocol undertakes to add 800 kilometers to the Cerrado road network.

Intermediation progressed to other models, like railways, where the East-West railway is a dream now coming true. To achieve its widely recognized success in its trajectory of 20 years as leading organ of Western Bahian agribusiness, Aiba constructed its foundations and history on master lines, like transparency, ethics, sustainability and future-oriented vision. Above all, the association came up with systematic and serious work, carried out by a highly qualified team in several areas, which evaluate and present solutions of all levels in the private and public sector. With a consolidated management system, based on values and qualities, developed by leaders of professional profile and well prepared, the association achieved prestige and credibility in its remarkable mission consisting in promoting agribusiness development throughout the State of Bahia in an integrated, sustainable and socially responsible manner, meeting associate member needs.

Over its history, it always made a point of adjusting to the challenges it had to face, bringing together, for example, in some moments, different departments focused on different crops. In addition to the institutional work defending the interests of the sector on several fronts, the association provides for the rural producers and rural managers an array of services performed by a technical body qualified in several areas, from administrative to judicial proceedings; capacity building and projection events; databases, means of information and communication; support when it comes to devising projects and analyses, as well as in all other initiatives where the support of the association is required. For carrying out all these activities, when it was created in 1990, Aiba began operating in a rented office, in downtown Barreiras, and later rented facilities in the same town (which belong to Sementes. Juliane and Agronol company).

Finally, in 2001, the association acquired the facilities of Ceval, a company of the town, refurbished the buildings and expanded them and established its current seat. The facilities are also home to the Association of Cotton Producers (Abapa) and Cattle Farmers (Acrioeste) and two funds: Cotton Agribusiness Development Fund (Fundeagro) and the Fund for Sustainable and Integrated Development of Bahia (Fundesis). Bahia Foundation, which had its office in the same facilities, moved to the Western Technology and Research Center (CPTO), in an area that belongs to Bahia Farm Show, in Luís Eduardo Magalhães. The Coffee Experiment Field is still there.

PERSONAL STYLE

Civil engineer and rural entrepreneur Humberto Santa Cruz Filho, responsible for remarkable initiatives all over the region, now mayor of Luís Eduardo Magalhães, was in charge, in the chair, of the association for some months in 2008. As interim president, he assumed the position of the entity’s vice-president and Abapa official, João Carlos Jacobsen Rodrigues, and remained in office from 4th June to 13th November 2008. For the present tenure, the 2009/10 biennium, Walter Yukio Horita was elected, owner of Grupo Horita, remarkable producer and former president of Abapa and Bahia Foundation. Upon his inauguration, Horita recalled the entity’s economic, environmental and social commitments, referring to the West as no longer being an agricultural frontier. “It is a consolidated region and our mission is to strengthen this economy pillar of the State, providing the governments with inputs for consistent agricultural policies, particularly focused on credit and income for rural producers”, he emphasized.

Upon turning 20, Aiba tries to mark its presence everywhere and whenever it is needed, and is now strengthening its identification as a solid and reliable association that fosters knowledge and drives the development and social well-being and, in the meantime,spreads the good image of Bahian agribusiness throughout all markets. The Western Bahia region stands out in the State and the Country for the strength of its agribusiness. In an area of 162 square kilometers, with 39 municipalities and a population of 951 thousand, its main characteristic is crop diversification and high social and economic representativeness, that distinguish it form other huge centers. The town of Barreiras is a reference point, with 137,832 people, according to the latest estimate by the Brazilian Institute of Geography and Statistics (IBGE), released in 2009. Another nearby municipality, Luís Eduardo Magalhães, only ten years old and with 52 thousand people, stands out for its growth rate – in terms of people, over 6% a year. Agricultural production is Western Bahia accounts for almost 4% of the total production in the Country.

According to data released by the Association of Bahian Farmers and Irrigators (Aiba), now for 20 years in the region, the exact share in the 2009/10 crop year is 3.8% and, in the case of cotton, it reaches an incredible 30%. With regard to job opportunities, according to data from the Ministry of Labor and Employment (MTE), the agricultural sector is very representative: the micro-region of Barreiras (including the municipalities of Baianópolis, Formosa do Rio Preto, Luís Eduardo Magalhães, Riachão das Neves and São Desidério), for example, reaches a 13.99-share of the general number of formal jobs registered in the State on 1st January 2010. Since the final years of the past century, this area of the State has shown remarkable development, with agriculture and cattle operations by immigrants from the South. Parallel with long established characteristic subsistence farming and livestock operations, usually restricted to valley areas, modern, commercial and competitive agriculture came into being, especially in the Cerrado regions, comprising some 6 million hectares in the region. Of these, more than 3 million are suitable for agriculture and approximately 1.7 million are currently under cultivation.

REASON ENOUGH

Several factors favored the great performance of Western Bahia: flat topography suitable for mechanization, well-defined climatic conditions (warm and wet season, November through April; dry and cold, July through September), availability of plenty of water (30 rivers making irrigation easy and precipitation levels from 1,100 to 1,800 millimeters a year) and abundant sunshine (3,000 hours per year), among other factors. Soybean has become the flagship of the economy, introduced in the 1980s, followed by rice and corn, with the latter playing an important economic role, too. In the 1990s, it was coffee that made it to the region, while cotton made a strong comeback, and is now the second crop in economic importance. In general, it is now well-structured and continues on its uptrend as a production hub in Western Bahia, a region that relies on crop diversity, product quality and excellent yields, with much technology and professionalism.

New Railway

The train for new times Works on the West-East integration railroad, fundamental for regional productransportation, are scheduled to begin in 2010 as far as logistics is concerned, a definite sign was given for a claim by Western Bahia and the entire State, to come true. The tender for the construction of the West-East Integration Railroad, fundamental alternative for regional crop transportation, was launched in March 2010, and the bids as expected to come in May, and the perspective is for the work to start in the second half this year. The 1,490 kilometers of the new railroad have been split into 14 lots and three stages, starting in Ilhéus, on the coast of Bahia, crossing the western portion of the State and heading to Figueirópolis, in Tocantins, where it will connect the North-South Railway. A major work in Brazil’s infrastructure, included among the priorities of the Growth Acceleration Program (PAC), investments in this railroad are estimated at R$ 6 million, according to the responsibility project by Valec Engenharia, Construções e Ferrovias, a division of the Ministry of Transports.

It will link other Brazilian production hubs and, strategically, with Ponto da Tulha port in Bahia, and with the ports in the North of the Country. As announced in the tender, the first stage, 530 kilometers long, from Ilhéus to Caitité, is projected to be concluded in the first half of 2011; the second, to Barreiras and São Desidério, in the West (413 km long), in the first half of 2012; and the third stage, by 2012. In the meantime, people in the West and wealth produced in the region take advantage of the roadways, with most of their lanes recovered, in response to the region’s claims. Also noteworthy is the federal road-rail intersection, formed by BRS-242, – 020 and 135, which connects this hub to all directions. And in this area there are novelties, too, resulting from joint efforts between producers (through their association – Aiba) and the state government. Together with Banco do Nordeste (BNB), they signed a protocol of intentions in August 2009, which includes the construction of the so-called Rodoagro, 200 kilometers long, between Luís Eduardo Magalhães – BA-459 (Soy Ring) and Formosa do Rio Preto – BA-225 (Coaceral), crossing Barreiras and Riachão das Neves. The cost amounts to R$ 101.95 million, to be split between the state government and private initiative. The enterprise is part of the Western Bahian State Roadways Program, which, in all, amounts to approximately 800 kilometers.

FLYING EVEN HIGHER

In terms of logistics, the region is seeking advances in air transport – now restricted to a daily flight only, Monday through Friday – in Barreiras, with up to 50-passenger planes. The restructuring of the town’s airport is a long-lasting claim, for bigger passenger and cargo planes, while a new landing track is now under construction, projected to meet these conditions, in Luís Eduardo Magalhães, by private initiative, in an area and initial works donated by the State. Leaderships are now involved with attracting resources for expanding the landing track and for the conclusion of the infrastructure works. Western Bahia also boasts a good energy structure (although towns like Formosa and Rio Preto still have deficiencies).

All the districts are in constant mobilization, claiming for the maintenance and improvement of the development conditions, which have marked this Brazilian front-running region. Ample Agricultural potentialities in an area of scarce environmental restrictions turn Western Bahia into a privileged region. The development of Western Bahia, triggered by entrepreneurs coming from the South in the past century, is now going through a consolidation and growth maintenance phase, where some of the largest business groups are inserted. Although a minor retraction has been observed of late, on account of the ripple effects of the global economic downturn, the interest in the land of this very attractive agriculture and livestock rearing hub, for example, has remained steady, particularly in terms of investments from abroad, and now several businesses are in operation throughout the region.

To this end, without any doubt, a substantial contribution came from the fact that it is the only huge Brazilian region still in a position to expand with minor environmental restrictions, making it possible to occupy 80% of the area, as the region is not included in the so-called Legal Amazon. In all, there are still more than 1.3 million hectares of Cerrado lands that can legally be destined for agricultural activities and, therefore, capture the attention of investors. In general, one hectare sells for R$ 6 thousand, which is seen as very accessible in light of a diverse reality. Furthermore, it is considered that, in addition to the persistence in the already assured and permanent yield gains, the materialization of actions viewed in consensus with regard to the environment, in the so-called Sustainable Western Plan, should add, in determining manner, to the preservation of all prosperity conditions. Within this context, a large investment by a Chinese company, was invested by a group set up in the Country in 2010.

The investment totals US$ 300 million for the acquisition of 100 thousand hectares, with the purpose to produce 250 thousand tons of soybean for the Brazilian and Chinese markets. At a second stage, this volume could reach US$ 842 million and 200 thousand hectares, including industrial operations. As a matter of fact, the focus of adding value with the industry, present in leadership manifestations for years, which prompted some investments in the soy, cotton and livestock production chains, has been given double attention. The new and progressive municipality of Luís Eduardo Magalhães, for example, has several projects under way, like the activation of corn processing facilities in 2010, with different by products for human food, while an investment of R$ 50 million in a chicken meat packing company is being implemented, and there are projections for cotton verticalization, with a weaving industry. Meanwhile, in late 2009, the municipality signed agreements for the installation of new industries in the so-called Cerrado Industrial Center (CIC), in an attempt to broaden its scope by at least 500 hectares.

At the same time, other initiatives are unfolding in the region, for example, a small airplane assembly line, which started operating in 2009 in Aero Centro company’s hangar, in the flying field of Associação Barreirense Aerodesportista. The target is to meet the needs of farmers and businessmen with regard to this type of transport, in a geometrical area marked by long distances. The industrial segment is getting more and more integrated with the outstanding agricultural model, generating ever-rising progress and renewed potentialities within this expressive Brazilian economic hub. Yields higher than ever before Characterized by crop diversity, Western Bahian agricultural ventures registered the historical mark of 5.8 million tons in the 2009/10 crop year.

Compared to the 2008/09 season, the planted area in the region was up less than 1%, remaining at approximately 1.75 million hectares. But yield gains, resulting from normal climatic conditions, which greatly favored all crops, and the use of appropriate technologies available for the sector, made yields soar 16% resulting into a harvest bigger than ever. The fact that the global economy started to pick up steam again was also a factor in the unprecedented figures achieved by agriculture in Western Bahia. The Gross Production Value (GPV) of all agricultural activities of the region totaled R$ 3.8 billion, a fact that attests to the remarkable contribution of the region to the economy of the State. Flagship of Western Bahia’s agricultural frontier and leading cereal cultivated in the State, the soybean was once again decisive for the success of the harvest. In the 2009/10 crop year, the oilseed, which took advantage of the regular rains, registered its best result ever, with a volume of more than 3 million tons. One of the crops most affected by the economic downturn, cotton resumed its good performance in Western Bahia. The 2009/10 crop was up 14% from the previous year, in spite of a 7.2-percent reduction in planted area. The result is estimated at 984 thousand ton crop of seed cotton. With regard to corn, without any attractive farm gate price incentive, the crop was a repeat of the previous year, reaching a volume of approximately 1.5 million tons, from a planted area of 170 thousand hectares.

HEATED MARKET

Irrigated coffee in Western Bahia, a major activity in the region, registered a production of approximately 35 thousand tons in the 2009/10 crop, up 9.7% from the 2008/09 crop. The credit goes to the favorable climatic conditions, with regular and well distributed rains over the year, allowing the farmers to sell depulped coffee, considered to be of better quality, thus fetching better prices in the market. Livestock rearing also deserves mention in the diversified composition of the agricultural complex in Western Bahia, conducted in compliance with new technologies; and the production of other crops, like rice, black-beans, cassava, eucalyptus and fruit. With the markets in equilibrium again and new impulse toward the growth of the agricultural ventures in the region, the producers hope for changes in the exchange rate policies, turning Brazilian products more attractive in the competitive international scenario.

The fields in the West exceeded all expectations And produced the biggest crop on record, which Accounts for 4.5% of the entire Brazilian crop In the 2009/10 crop year, soybean exceeded all expectations and reached the historical volume of upwards of three million tons, attesting even further to its importance as one of the most relevant products on the State’s economic agenda. The volume of the 2009/10 crop accounted for 4.5% of the entire Brazilian oilseed crop. Soybean’s Gross Production Value (GPV) amounted to R$ 1,761 billion in the current season. From the 2008/09 and 2009/10 stages, the oilseed rose 28.19% in volume. The planted area was up 6.8%, jumping from 983 thousand hectares to the mark of 1 million hectares, a record in the State of Bahia, corresponding to about 60% of the area devoted to agriculture in the western portion of the State.

The result achieved by the oilseed has to be credited particularly to the climatic conditions, with regular and timely rains, which made yields soar from 42 sacks to 51 sacks per hectare, repeating the best performances ever reached in the region. The production is destined for the internal and external markets, where exports to Asian countries stand out for their volumes, notably China, major global consumer of soybean and byproducts. Part of the soy harvested in the West is processed in the region, at the facilities of two international giants – Bunge and Cargill. Everything under control cotton farming resumes its economic importance in the region, encourages investments and produces a seed cotton crop of almost a million tons with the economy picking up steam, cotton farming is getting back on track and is again thriving in Western Bahia. In the 2009/10 crop, in spite of a reduction of 7.2% in planted area, harvest was up 14%, reaching a volume of 984 thousand tons of seed cotton, compared to 864 thousand tons in the previous year. The higher volumes are the result of higher yields, which jumped from 220 arrobas per hectare to 270 arrobas. Of the total R$ 3.8 billion Gross Product Value (GPV) from agricultural activities in the region, cotton was responsible for R$ 1,212 billion.

Once the crisis was overcome, demand for fiber and derivatives began rising all over the world. At this juncture, cotton farming in Brazil is likely to make strides again, especially in Bahia, second biggest national producer, coming only after Mato Grosso. In the 2007/08 crop year, cotton production in the West had its best result up to that moment, with a 1.2 million ton crop of seed cotton. Nevertheless, due to the world economic crisis that broke out in 2008, cotton fiber, one of the most affected sectors, witnessed a shrinking foreign market. On account of this, in the 2008/09 crop year, cotton suffered not only huge area reductions in the West, but also poor yields, but now things are getting back on track again and great recovery has been achieved. The expectation of the growers is for world demand, very depressed during the crisis, to continue driving both the production and exports of the region’s acknowledged high quality cotton over the coming years Without the incentive of better prices at home, corn volumes remained virtually stable in the 2009/10 crop.

Total harvest reached about 1.5 million tons, from a planted area of 170 thousand hectares, with yields of 145 sacks per hectare. The crop is still putting up with the problem of excessive supply brought about by the failure of the North-American project consisting in the use of the cereal for making ethanol. With North-American rice making a comeback to the market, the prices of the commodity, which had been pleasing the growers, began to drop all over the world. In Western Bahia, other problems affect the crop. Due to the lack of comercial incentives, the farmers are unable to follow the technical recommendations of the Ministry of Agriculture, Livestock and Food Supply (Mapa), which rule that the area devoted to corn should correspond to 30% of the area occupied by soybean. Technical analysis has it that corn, used in the crop rotation scheme, plays a fundamental role in minimizing the effects of fungus diseases like blue mold, which usually attack leguminous plants (soybean and black-beans).

Currently, the area planted to corn corresponds to about 17% of the soybean area and, with prices on the decline, there is no motivation for expansions, which would benefit the fields in the form of fewer phytosanitary problems. Coffee The irrigated 2009/10 coffee crop in Western Bahia, acknowledged for its quality, is estimated at 34 thousand tons, up 10,8% from the 2008/09 season. The planted area also soared proportionately, while productivity remained at 455 sacks per hectare. In the current season, the crop took advantage of the regular climate conditions, which allowed for the production of pulped coffee cherry, which fetches better prices in the market. The coffee growers also benefited from better prices, due to shortages in the market, by virtue of problems that affected other production hubs, like Colombia. A combination of high technology and ideal climate and topography conditions, allow the region to produce coffee Arabica without facing the risks of traditional coffee growing areas, particularly frost conditions.

The Bahia Cerrado is known for its bright sunshiny days almost all over the year and regular climate conditions, with well defined rainy periods, factors that boost both yield and quality. Cattle Farming The cattle farmers in Western Bahia had great news to celebrate at the start of 2010. The Ministry of Agriculture, Livestock and Food Supply (Mapa) announced the extinction of the foot and mouth disease transition zones, which is to happen until the end of this year. One of these areas comprises important cattle breeding municipalities in Western Bahia, like Formosa do Rio Preto, Santa Rita de Cássia, Mansidão and Buritirama. The region is known for its genetically enhanced breeding qualities, based on extensive cattle raising, with confinement periods during dry pastureland spells.

The expectation is that, with the end of the transition zones, which will allow intense movement of animals between municipalities, the activity will start picking up steam again. The fight of the Western Cattle Farmers’ Association (Acrioeste),  supported by the State Agency for Agriculture and Livestock Defense (Adab), an organ linked to the State Secretariat of Agriculture, Irrigation and Land Reform, was decisive for the MAPA to eliminate the transition zone, which puts restrictions to animal movements and curbs the development of the production chain. Home to a herd estimated at about 2.2 million head, consisting of zebu breeds, particularly Nelore, Western Bahia is also home to two meat-packing companies that supply several locations throughout the State. With an eye towards the cattle breeding potential in the region, major cereal producing companies in the Country, along with other huge national groups, have already announced their interest in setting up businesses in the region, opening new fronts for the cattle breeders in the region.

In poultry farming, the good news for 2010 is the inauguration of a new meat-packing house in the region, with an initial capacity to slaughter 150 thousand birds a day, a fact that will certainly cause poultry farming to soar considerably. Another innovation has to do with the integration of family farming with cattle breeding operations. The huge agricultural production of the region also invites other segments to the region, such as pig farming, sheep and goat rearing, all activities with great chances to succeed.  In two distinct areas, Cerrado and Vale do São Francisco, irrigated orchards supply the market with plenty of fruit species.  Fruit farming is socially and economically very relevant in Western Bahia. It comprises two distinct production areas, with regional peculiarities. In the Cerrado region, 3 thousand hectares are devoted to it, and the following fruit species are cultivated: citrus, papaya, banana, watermelon and guava, mostly for the domestic market. All plantations are irrigated through a central pivot. In 2009, an additional area of 160 hectares of papaya began to be established.

The new field is part of a project which, at the end of its implementation is to reach 500 hectares. Mangos and pineapples are also vastly produced in the Cerrado region. The irrigated fields in Vale do São Francisco, a region that is under the influence of the municipality of Bom Jesus da Lapa, the highlight is Projeto Formoso, created by the Parnaíba and São Francisco Valley Development Company (Codevasf). It currently comprises about 12.5 thousand hectares, especially banana plantations, whose scope reaches 5.2 thousand hectares. Banana plantations are followed by papaya, with 800 hectares, and other fruit, like citrus, mangos, lemons, pineapples, guavas, watermelons and cashew nuts. Other relevant crops complement the diversified production complex in Western Bahia. Rice, which is much used as a pioneer crop for new areas, experienced a volume reduction in the 2009/10 crop year. The area devoted to this cereal dropped from 24 thousand hectares to 8 thousand hectares, while the production volume receded from 46 thousand to 15.3 thousand tons. With regard to black-beans, this crop repeated the results of the previous year, with a total production of 40.5 thousand tons, from a planted area of 15 thousand hectares, with yields of 45 sacks per hectare.

Almost specifically cultivated for meeting the needs of the extensive cattle breeding operations throughout the region, the production of grass seed soared 52,5 percent in the current crop year. The volume rose from 11.8 thousand tons to 18 thousand tons. The area devoted to this grass soared from 26.4 thousand hectares to 40 thousand, representing an increase of 51.5%, while yields continued at 450 kilos per hectare. Eucalyptus reforestation, in turn, reach 36.8 thousand hectares in Western Bahia. This type of reforestation is rather new in the region. Most eucalyptus stands are being cut for the first time. Total production in the 2010 season, in excess of 11 million cubic meters, is up 9.6% from the previous season. Eucalyptus wood is destined for the local industries, where it is used for grain drying purposes, as well as in metallurgy operations in Bahia and other states. A decisive factor for the development of agriculture, science was given a new impulse in the region with the inauguration of the Agricultural Technology and Research Center of Western Bahia (CPTO) during the Bahia Farm Show 2009, an initiative by the Western Bahian Development and Research Support Center (Bahia Foundation).

The Research Center is located on the premises of the event, in an area of 2.3 thousand square meters, and is equipped with state-of-the-art research tools, emerging as a reference in the State, Northeast and North of the Country. The trials conducted by the foundation and by the partner companies are to be centralized to this location, assuring safer, faster and more effective results. The development of new varieties for the leading crops in Western Bahia are major experiments to be carried out by the center, which, in 2010, for example is launching three new soy cultivars and two cotton cultivars. Research on crops like corn, coffee and sunflower is also under way. With regard to equipment, CPTO has 10 laboratories to serve the different areas and needs of the agriculture and cattle farming sectors. In late 2009, Bahia Foundation and company Kuhlmann Laboratórios established four new structures specifically equipped for environment-related analyses, including water, chemical residues, fertilizers, seeds, soil fertility, cereals, nematodes, soil microbiology, entomology and phytopathology, among others. With the new scientific and technological advances, Western Bahia remains in the forefront of evolution-oriented agriculture, overcoming all its challenges.

The main and leading focus is yield and quality improvement, whilst providing every condition for a promising future. To give continuity to the good performance of Western Bahian fields, research and technology departments have earnestly been involved with phytosanitary controls, following closely all pest and disease occurrences. Thus, for example, the Passarela da Soja 2010 event, hosted by Bahia Foundation, with the support from the Association of Bahian Farmers and Irrigators (Aiba) and other associations, in Roda Velha, municipality of São Desidério, was focused on this problem, particularly white mold, disease that affects several agricultural crops, which caused scattered losses to soy fields in 2009. The growers were instructed on how to prevent losses, by gradually reducing the amount of pesticides. In addition to white mold, other diseases that were given attention include Asian Rust, nematodes and soy worms.

As a matter of fact, the well known Strategic Plan for Managing Asian Rust, which involves such associations as Bahia Foundation, Aiba, Agriculture Defense Agency of Bahia (Adab), Bahian Agricultural Development Corporation (EBDA), Brazilian Agricultural Research Corporation (Embrapa), municipal administrations and other companies, continues operating towards reducing the ill effects of diseases and pests on crops. The works are geared towards constant monitoring and surveillance and, in the meantime, control measures are sought after, through seed trials, with the aim to identify the resistant genes. Another program underway in the region for four years now refers to the boll weevil, in an attempt to keep the bug under acceptable levels, as it is the most serious cotton pest. The Association of Cotton Growers of Bahia (Abapa), Fundeagro and Fundação Bahia, supported by the Aiba, held a workshop in 2009 on manners to monitor and fight this beetle. New vehicles were delivered to the technicians in charge of the program, while the regional control nuclei strategy is maintained, with the implementation of farm-to-farm integrated communication systems.

In the 2008/09 crop, the boll weevil wreaked havoc in the cotton fields because of excessive precipitation, while in the 2009/10 season, thanks to prevention works, it was possible to keep infestation levels below expectation, and it is now assumed that the problem is under control in Western Bahia. Sustainable West plan revolutionizes all agricultural activities in the region by promoting and supporting the environment adjustment program in all rural properties. In 2009/10, Western Bahia made huge strides with regard to environmental regularization, with the conclusion of the legal framework of the State Plan for the Adjustment and Regularization of Rural Estates, and its regional counterpart, the Sustainable West Plan. Implemented by Law n° 11.478/09 and amended by Law n° 11.989/10, the objective of this Plan is to promote and lend support to environmental adjustments in all rural properties throughout the State, through a recovery and regularization plan of all legal reservations and permanent preservation areas, as well as regularizing all authorizations, records and environmental licenses required for agricultural productions.

This unprecedented initiative by the State was conceived and constructed by the government of Bahia, through its Environment Secretariat (Sema), Agriculture, Irrigation and Land Reform Department (Seagri), besides the participation of rural producers, represented by the Association of Bahian Farmers and Irrigators (Aiba); organized civil society, via The Nature Conservation (TNC) NGO; jointly with the Ministry of the Environment, through the Brazilian Institute of Geography and Statistics (IBGE). Taking part in all its steps, it was the right alternative to regularize the question of passive forest management in the rural properties of the largest agricultural hub in the State. The lack of environmental licenses of all agricultural enterprises was putting both the regional and state economy at risk, once any environmental dispute generates hurdles when it comes to capturing resources for production costs, besides interfering with the commercialization of the crop, which requires environmental security.

This environmental passive forest situation is the result of the inability of the environmental organs to attend to the vegetation suppression processes and environmental licenses demanded by the producers. It is estimated that currently there are upwards of seven thousand lawsuits in the State waiting for the verdict. The Plan has the intention to simplify the procedures and speed up the regularization of the court cases, while ensuring security to growers with regard to the application of new administrative penalties by environmental organs in charge of inspections. It is worth mentioning that in Western Bahia passive forest problems were bureaucratic rather than environmental, as the majority of the producers had already been segregating the Permanent and Legal reservations, but lacked the corroborating documentation issued by the competent environmental organs. By publishing Decree n° 12.071 in the State Government’s Official Gazette, on 24 th April 2010, regulating the Law that instituted the Plan, the adhesion processes are now in full swing.

This measure has given the growers the necessary judicial assurance for them to assume their passive forests and present technical strategies aimed at finding a solution for them, without running the risk of new fines and embargoes. At the moment producers adhere to the Plan, they are automatically protected against any sanctions or any pending dispute. About 1.2 thousand rural producers, natural persons, associate members of the Association of Bahian Farmers and Irrigators (Aiba), have been freed from the burden of the Rural Social Contribution fee, which will no longer be deducted by the companies that acquire their products at the moment of commercialization. The ruling was made by federal substitute judge Igor Matos Araújo, of the federal court in Barreiras, on 11 th March 2010, and suspended the liability of the tax, putting an end to a more than a decade long battle, which started 1997, when Aiba began to file a series of judicial proceedings against the Funrural fee. The proposition defended by the producers, under the umbrella of the association, is that article 25 of Law n° 8.212/91, which makes it mandatory to collect the Funrural fee, based on the gross income generated from the commercialization of the crop, was instituted by ordinary law, when in fact a complementary law should have been created, an instrument with the power to change the Constitution.

At the same time, Aiba argues that this tax breaks the constitutional isonomy, in as much as the rural contributors are subject to higher taxation compared to city dwellers, for the same purpose, consisting in the social security fee. In addition to breaking the Constitution, the Funrural, which increases the tax burden and jeopardizes the competitiveness of the Country, turns into a huge injustice for a sector that generates one third of all jobs, and accounts for one third of the Gross Domestic Product (GDO) and is responsible for 40% of Brazil’s exports. In February 2010, a favorable ruling by the Supreme Federal Court (SFC), in a plenary session, the Court of Special Appeals upheld proposition n° 363852, defining the unconstitutionally of the Rural Social Contribution and signaling success to the pending court cases.

The only condition likely to remain unchanged is that the effects of the present situation and the collection of the fee by the federal tax service will persist for those who did not resort to the court, which is not the case of Aiba members, who had been waging the war since 1997. To take advantage of the decision, all associate members should immediately contact Aiba for the declaration attesting to their inclusion in the judicial proceeding, as well as receiving guidance with regard to the necessary documentation in order to get reimbursed for fees deducted since 1997. The Bahia Fund for Integrated and Sustainable Development (Fundesis) is a major social responsibility initiative carried out by the Association of Bahian Farmers and Irrigators (Aiba), jointly with the Northeastern Bank. It was created in 2007 and its goal is to improve the quality of life of thousands of people throughout the region, by means of socio-educational financing schemes, including social and digital inclusion, education, culture, preventive health, job generation and entrepreneurship.

In 2010, Fundesis relies on a grant of R$ 700 thousand for new projects, which will be available through a decree. Since its creation, another R$ 700 thousand have been invested and directly benefited more than 2 thousand people, through 16 projects from 13 entities, in the municipalities of Barreiras, Luís Eduardo Magalhães and Angical. Thanks to Fundesis, 800 new direct and indirect jobs were created; with new resources, this figure is likely to soar. In the locations where the Fundesis operates, significant improvements in different fields are apparent, particularly in the cases of a reduction in the rate of drug consumption, child prostitution and alcoholism in the families under the umbrella of the institutions.

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, Peru Uruguay and Chile, providing expert advice on property acquisition and investment tours.

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