“…the 2023/24 harvest was difficult for farmers, no matter how much preparation and planning there was…”
Mauro Osaki is a researcher at the Center for Advanced Studies on Applied Economics – Cepea, with a degree in agronomic engineering, a M.Sc. in applied economics from the “Luiz de Queiroz” College of Agriculture and a Ph.D. from the Federal University of São Carlos.
Mauro Osaki, researcher at Cepea
AgriBrasilis – Why should soybean and corn farmers suffer the biggest loss in the last 25 years?
Mauro Osaki – This scenario is basically due to the retraction of prices in the domestic market, the drop in yield observed in the soybean harvest in the main regions of Brazil and the irregular distribution of rainfall in the 2023/24 season, with adverse situations in the case of small, medium and large farmers. This loss occurred mainly in the region of Sorriso, State of Mato Grosso, which presented the highest negative value in recent times for soybean.
AgriBrasilis – Could these losses have been avoided? How?
Mauro Osaki – For this scenario, there is nothing specific that could have been done to avoid these losses, as the lack of rain is one of the biggest challenges to the farmer. The farmer could have sold their production in advance to protect the price, but they would not have had enough production to fulfill the delivery contract and there would be the possibility of a washout [breaking/cancelling of a contract, which occurs when one of the parties fails to comply with an agreement and the other needs to be compensated].
“The lack of water is a critical problem that is difficult to reverse, so even with the adoption of preventive measures, there is not much that the farmers could do to protect themselves”
AgriBrasilis – You said that estimates for the winter corn crop are better, but the profitability is insufficient to cover the losses of soybeans. What would it take to cover these losses? What is the estimate for the winter corn crop?
Mauro Osaki – To cover these losses, it would be necessary to have better commodity prices to the farmer, so that there is a greater supply. The next estimates for the winter harvest may end up being better, but the forecast is that it will not be possible to cover the losses of soybeans, which would be ideal.
AgriBrasilis – Were these results just a consequence of El Niño or was there a lack of planning by farmers?
Mauro Osaki – Most farmers, both small and large, already have a delimited plan and have been operating for years. The lack of water is a critical problem that is difficult to reverse, so even with the adoption of preventive measures, there is not much that the farmers could do to protect themselves. And even though larger farmers had more resources, such as irrigation systems, it was not only the lack of rainfall that compromised production, but also the high temperatures and low humidity of the air.
In short, the 2023/24 harvest was difficult for farmers, no matter how much preparation and planning there was. And even if most farmers had agricultural insurance, the problem would be different: how would insurers recover the numerous losses generated by this scenario. In Brazil, there is still a shortage of investments for this.
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