Agribusiness is responsible for 21.4% of Brazilian GDP, totalizing US$ 408 billion of goods and services in 2019 ¹. When the pandemic hit Latin America, the country was in the middle of a record harvest, with 119.9 million tons of soybean in the first months of the year ², ranking Brazil as the world’s largest producer of this commodity.
To address the Brazilian agricultural dynamics, the Minister of Agriculture, Tereza Cristina, granted AgriBrasilis an exclusive interview. Tereza Cristina Corrêa da Costa Dias has degree in Agronomic Engineering from the Federal University of Viçosa (UFV), and was a federal deputy of the state of Mato Grosso do Sul since 2014 and re-elected in 2018. Then, in Jaunary 2019, she took the post of minister in the Brazilian Ministry of Agriculture, Livestock and Supply (MAPA).
AgriBrasilis – In your opinion, what is Brazil’s potential to supply the world with food? What are the prospects for the sector in the medium and long term?
Minister of Agriculture – Brazil is one of the world’s largest producers and exporters of agricultural products, selling to more than 160 countries. It has shown itself to be a reliable partner in the supply of food and has the potential to expand its insertion in the international agricultural market by increasing the production, yield and competitiveness of agribusiness, combined with the opening of new markets.
The estimated harvest of 250.9 million tons of grains for the next harvest reinforces the strength of the Brazilian agriculture. Our fields will produce 3.6% more than the previous harvest, thanks to the commitment of farmers, who seek in technology and innovation the vital support to strengthen the country’s presence among the world’s largest producers and food. This growth will not be greater only due to the drop caused by the drought in the south of the country that affected the production of soybeans, corn, beans and other cereals.
Part of this production is consumed in the domestic market. Corn and soybean bran are used especially in cattle, poultry and swine feed. Excess soybeans and corn, as well as beef and chicken, coffee, sugar, eggs, orange juice, fruits, cotton and other agricultural goods are exported, generating billions of dollars in trade surplus. This is a very important result, especially at this time, when the level of the national economic activity has been greatly affected by the Coronavirus pandemic.
In the first five months of the year, agribusiness exports totaled US$ 42 billion, increase of 7.9% in relation to the same period a year earlier, driven mainly by soybean complex and beef exports to China. It is the highest value exported for the period (January – May) in the historical series. The previous record was in 2013, when sales totaled US$ 40.38 billion during the period. The growth in agribusiness exports was due to the increase in the quantity of products shipped, considering that the quantum index (quantity) was 13.7% higher in the first five months of 2020 compared to 2019, while the price index dropped 5.1% in the same period.
Agribusiness exports were responsible for reducing the 7.2% drop in Brazil’s total foreign sales from January to May 2020. The sector represented almost half of the country’s foreign sales (49.7%), the second largest share for the period, behind only the same period in 2016, when the sector’s share in total exports was 49.9%. Soybean complex exports reached US$ 19 billion in the first five months of 2020. Soybeans in grains, the sector’s main product, had record sales both in value, US$ 16.34 billion, and in quantity, 48.13 million tons.
The increase in the quantity shipped (+36.8%) was a determining factor for the expansion in value (+32.1%), considering that the average export price of the product dropped from US$ 352 to US$ 339 per ton (-3.5%). Sales to China represented 72.8% of all soybean grains exported by Brazil in 2020, with the Chinese market being mainly responsible for growth in comparison to the previous year (+ US$ 2.87 billion). Among the world’s major economies, Brazil stands out for having grown its exports in the crisis, driven by agribusiness exports, even with a scenario aggravated by social isolation measures and logistical problems in several importing countries.
Brazil is a reliable food supply partner and has demonstrated its ability to meet the needs of more than one billion people worldwide. Our country has ratified this position through our actions, acting with responsibility and solidarity. In return, we also want to have a strong commitment from the rest of the international community. Trust is a two-way street: stability and predictability on the supply side require
stability and predictability on the demand side.
In a recent video conference with G20 representatives, we observed that trade barriers should not only be lifted when a calamity occurs, but whenever it is convenient to combat fear of food shortage. The use of subsidies at this time of crisis is not appropriate, because they end up creating unfair competition for developing countries and affect living conditions in the countryside.
Fair agricultural trade allows the spread of better conditions in rural areas, where most of the world’s poverty is concentrated. We believe that Brazil is prepared to do its part and to commit itself not only as one of the protagonists in world agricultural production, but also as an advocate of positive transformation in benefit of future generations.
Covid-19 offers us the opportunity to rethink our collective behavior. Let us win the fight against Covid-19
together and emerge from this situation with a mentality to finally achieve stable global food security and decent livelihoods for all mankind.
AgriBrasilis – What are the main demands of the different agricultural sectors? Is the ‘agricultural credit’ suitable?
Minister of Agriculture – The main agricultural demands were for greater availability of credit resources, with reduced interest rates, and the adoption of emergency credit support measures. This covers financing for debt composition as a result of its reduced payment capacity caused by the Covid-19 pandemic and the occurrence of climate adversities. Yes, the agricultural credit is suitable: it was expanded and improved, as disclosed in the 2020/21 Harvest Plan, launched last June 17th. There are US$ 46.9 billion to support national agricultural production, an increase of US$ 2.68 billion compared to the previous plan. Financing may be contracted from July 1, 2020 to June 30, 2021.
From the total, US$ 35.66 billion will be allocated to costing and marketing (5.9% above the value of the previous harvest) and US$ 11.31 billion will be for investments in infrastructure (6.6% increase). All these resources will ensure the continuity of production in the field and food supply in the country during and after the new Coronavirus pandemic. Resources for investments increased by an average of 29%.
It is worth highlighting that the Harvest Plan is focused on small and medium producers, who are those who need the support of the Federal Government the most. Small rural producers will have US$ 6.56 billion for financing by the National Program to Strengthen Family Agriculture (Pronaf), with interest of
2.75% and 4% per year, for costing and marketing. For medium-sized rural producers, US$ 6.6 billion
will be allocated through the National Program for Support to Medium Rural Producers (Pronamp), with interest rates of 5% per year (costing and marketing). The interest rate will be 6% per year for major producers.
Recall that agriculture and livestock grew 1.9% in the first quarter of 2020, while other sectors suffered retraction. In addition to supplying the domestic market, agriculture exported 17.5% more compared to the same period in 2019. This scenario gives us the conviction that Brazilian agriculture and livestock will
be one of the main engines of economic recovery, after the Covid-19, which imposed a dramatic situation never seen before, on a global scale.
From the start of the pandemic, among the various measures adopted by MAPA – as a way to support the producer in this area – is the publication of Resolution 4.801 of the National Monetary Council, which allows the extension of deadlines and capitalize the products affected by the crisis; the anticipation of resources for the Harvest Guarantee and Funcafé resources. Actions were also adopted by MAPA for small producers, family farmers and traditional communities. There was the allocation of US$ 99.4 million for the Food Acquisition Program, in conjunction with the state-owned National Suppy Company (Conab) and with the ministries of Citizenship and Economy, in addition to maintaining the resources of the school meal program for acquisition and donation of food hampers.
AgriBrasilis – Regarding the pandemic we are experiencing, will there be food for everybody?
Minister of Agriculture – During this pandemic period, there was an increase in agricultural production, rural credit hiring (including for investments) and exports. This scenario shows that the sector was relatively less affected in relation to other areas of the national economy, with the exception of specific segments, ensuring the continuity of full supply to the domestic market in all regions of the country.
The Ministry of Agriculture was successful in ensuring the supply of food to the Brazilian society and in keeping commercial exchange flowing. In this health crisis scenario, Brazil has achieved record agricultural exports, as already mentioned. Our agriculture has once again shown its importance for the development of the country, even in an adverse situation, and it has fulfilled its role as guardian of food security with health and sustainability. Thanks to our producers, rural workers and entities and companies of the sector, we will win this pandemic together.
The first actions of MAPA were the creation of a committee to monitor the impacts of the pandemic and
the publication of an ordinance detailing essential activities to ensure the operation of the sector. Technical recommendations were also elaborated for various sectors with guidelines in the prevention of the contamination of processing, beneficiation, transport and trade of the products. Furthermore, recommendations were also elaborated for the operation of the sectors like refrigerators, transport of food, harvest, street markets and produce markets.
Unlike other countries, Brazil has not suffered interruptions in the operation of the sector. This has been
and is being essential to the normality of the supply flow of our population. Also in this scenario, one
data to be highlighted is the Gross Value of Agricultural Production (GPV) of 2020. According to data updated in May, it is estimated at US$ 139.92 billion, 8.5% higher than that obtained in 2019 (US$ 128.9 billion). The value is a record since the start of the historical series in 1989.
The harvest had an increase of 11%, with US$ 93.4 billion, and livestock obtained US$ 46.52 billion, which is an increase of 3.9% compared to last year. The record grain harvest estimated at 250.5 million tons, the agricultural prices and the favorable performance of some crops, such as coffee and sugarcane, are decisive in estimating these values. But once again, they reinforce the grandiosity and strength of the field.
AgriBrasilis – Various foreign companies, especially from China and India, have invested in the pesticide sector in Brazil. In the last three years there was a considerable increase in the approval of pesticide registrations. Nevertheless the time for approval and market access is still very long and can reach up to 10 to 12 years. Since it is an input, what is the reason for the delay?
Minister of Agriculture – The period of time is actually less than that mentioned in the question. It varies from six to eight years, and the period for low impact products is one year. There is a reason for the need to use this deadline: the Brazilian legislation is one of the strictest in the world, aligning itself with the best regulatory practices of the countries of the Organization for Economic Cooperation and Development (OECD). For this reason the analyses of these products are extremely technical-scientific and naturally require time for analysis by three different bodies.
The Brazilian Institute of Environment and Renewable Natural Resources (Ibama) analyzes the product
from the viewpoint of environmental impact. The National Health Surveillance Agency (Anvisa) assesses the issue of health impact. The Ministry of Agriculture, Livestock and Supply (MAPA) investigates the effectiveness of the product for the crop. Everything is done very carefully.
Notes:
¹ Center for Advanced Studies in Applied Economics (CEPEA/USP) and Confederation of Agriculture and
Livestock of Brazil (CNA).
² National Supply Company (Conab).