Article provided to AgriBrasilis by researchers.
Antonio Buanain
Antônio Marcio Buainain has a degree in Law from the State University of Rio de Janeiro and in Economic Sciences from the Faculty of Political and Economic Sciences in Rio de Janeiro. His master’s degree in Economics was awarded by the Federal University of Pernambuco and a doctorate in Economic Science by the State University of Campinas. Currently, he is a Professor at the Institute of Economics at the State University of Campinas (Unicamp).
Roberta Grundling
Roberta Grundling has a degree in Economic Sciences from the Federal University of Santa Maria, and a master’s and doctorate in Agribusiness from the Federal University of Rio Grande do Sul. Today, she works as an Analyst at Embrapa’s Secretariat of Intelligence and Macro-Strategy.
Pedro Abel Vieira Jr.
Pedro Abel Vieira Jr. has a degree in Agronomy from the Federal University of Paraná, a master’s degree in Phytotechnics from the University of São Paulo, and a doctorate in the same area, in addition to a doctorate in Economics from the Institute of Economics at Unicamp. He has been a researcher at Embrapa since 1989.
It matters to say, each time more, the obvious: to save the crop it is needed, first, to plant it, following all steps from the “operations handbook”, of the best agricultural practices, which take into account the need to match economic-financial sustainability with the increasingly demanding and needed environmental and social rules; then you have to be careful to avoid plagues and diseases, hope for enough rain and at the right time, that either heat or cold aren’t excessive; and finally, that at the time of selling the prices compensate the risks and the producer’s effort. This activity in Brazil involves millions of people, moves the industry, the local commerce, the ports, transports, banks, liberal professionals. But still its role does not seem to be fully recognized by society, which in spite of the catchphrase “the agro is pop, the agro is all”, aired on prime time TV, still sees the sector as delayed and underestimates its importance on the country’s development.
In the article “The Crop Salvation is not the Crop”, published on O Estado de São Paulo (12/10/2020), the former director of the Central Bank, Luís Eduardo Assis, relativizes the importance of agriculture for the Brazilian economy. He claims to be a “naive chimera (…) believing that Brazil can grow driven by agribusiness” and suggests the diversification of the productive basis. Based on empirical data that indicates the secular decline in participation of agriculture in GDP, of 17,7% in 1960 to 4% in 2018, the article takes up an old and persistent debate that opposes agriculture and industry in the development process, heritage of vision that pointed backward agriculture as an obstacle to economic growth. This opposition was overcome by evidence that for decades the agriculture, even though backward, was functional and transferred capital and income to finance industrialization, and more recently by the extraordinary transformation and modernization of agriculture, which has stood out for its dynamism and contribution to the economy. and Brazilian society.
The article builds a scarecrow, unnecessary, to recommend the need for productive diversification in Brazil. We did not find anyone sustaining the vision that the agribusiness, alone, can insure the country’s growth. But the scarecrow seems to be useful and some come so far as to indicate that the agricultural success would be responsible for the industry atrophy, diagnosed as victim of an Dutch enfermity caused by dollars generated by primary exports.
The secular fall in agriculture participation in GDP is the same global fenomenon, associated with development. “It has dropped because the other sectors have grown more than agriculture”, says the author. In the case of Brazil, between 2000 and 2017, the Added Value of Agriculture was the one that grew the most, about 5,5%, while Services and Industry increased 4,5% and 4,3%, respectively. It is not too much to reaffirm that this growth is due, fundamentally, to the yield gains and not to land incorporation.
Today’s agriculture is deeply inserted in value chains that include the sectors of industry and services, and Luís Eduardo’s statement that “the chain effects on the fabric of economic activity are less than those caused by other segments” only makes sense in the context of false polarization between sectors. This is not the case and for this reason, even if the overflow is less, there is no reason not to take advantage of the potential of agriculture to leverage industry and services.
Consider the following data: The oil refining industry accounted for 6.4% of 2018’s industrial production, and only the biofuels industry accounted for 2.1%. Including some of the industries based on agribusiness, such as meat (7.0%), cellulose and paper (3.4%), vegetable oils (2.5%), dairy (2.0%), processing of grains, bakery and pasta products (2.5%), sugar and coffee (1.5%) and alcoholic beverages (1.3%), the share of industries directly linked to agribusiness rises to 22.3%, higher the participation of important segments such as the extractive and oil processing industries. In addition to the advantage of spatial deconcentration of agricultural-based industries, while the industrial production of the extraction industry grew 29% between 2014 and 2018, the average growth of the agricultural-based industries mentioned was 33% in the same period.
But the overflows go far beyond the segments that use agricultural raw materials. It is necessary to include before the gate, such as the fertilizer industry, and the machinery and equipment industry for agriculture and livestock, civil construction and financial, transportation, storage and distribution services, technical services, training / capacity building and search. It is important to note that the link with agribusiness has also been a driver of innovations throughout the chain, a condition to meet the increasingly demanding
demand of agricultural production.
The inducing role of agribusiness in the Brazilian economy is no chimera. Despite representing less than 5% of GDP, according to CEPEA / USP, the sector as a whole accounts for more than 20% of jobs, which, added to the personnel employed in family farming, reaches around 25 million people. Still, the sector generated US $ 97 billion in exports in 2019 (44% of the total), is responsible for the positive balance of the trade balance and has been supporting business in all sectors of the economy, throughout the national territory, being particularly important in areas of recent occupation.
The spillover effects may even be limited, but they are strong enough that agriculture and agribusiness are indeed treated as priority and strategic axes to promote the sustainable development of Brazil and the diversification of the productive base proposed by Assis. It is time to overcome the paradigms of the past and understand that agriculture today is a complex network of activities and businesses that can and should be used to pull the Brazilian economy.
It is important to say that the salvation of the crop is not in the crop, but that the crop showed that the only viable path for development is that of innovation, productive efficiency and competitiveness. And it is indicating that the time has come to invest in a ‘new’ crop of innovation, because without planting and taking good care of the crop, there is no production and no salvation.