Agriculture

According to the U.S. Department of Agriculture (USDA), Brazil is the third largest agricultural exporter in the world behind the United States and the European Union. Brazil ranks number one in world production and exports of coffee, sugar, and frozen concentrate orange juice; number two in soybeans, tobacco, beef, and poultry; and is a major producer and exporter of corn, pork, and cotton. Agricultural trade between Brazil and the United States exceeds $6.2 billion annually, of which Brazilian exports account for more than 90 percent. Brazil is a growing market for U.S. exports of consumer-ready processed food products and fresh and processed fruits and vegetables. Brazil is also a significant importer of U.S. wheat. The United States is a major importer of Brazilian sugar, coffee, orange juice, tobacco, hardwood lumber, and plywood. The United States and Brazil share many interests regarding development of and trade in products of agricultural biotechnology. The success of Brazil’s sugar cane-based ethanol program has made it a world model for alternative energy. As the second leading ethanol producing country after the United States, Brazil actively promotes ethanol as a renewable fuel worldwide.

How Did EMBRAPA Get It Right?

Posted on by Mark Langevin

Embrapa

Paulo Correa and Christine Schmidt recently published, “Public Research Organizations and Agricultural Development in Brazil: How Did Embrapa Get It Right?” This Economic Premise from The World Bank is the perfect primer on Embrapa and its pivotal role in developing the appropriate agricultural technologies for the Center-West’s booming agricultural production during the last several decades.

Correa and Schmidt argue that EMBRAPA’s success stems from four critical factors:

1. Adequate levels of public funding;

2. Sustained investment in human capital;

3. International collaboration and research excellence; and

4. A mission orientation and IPR [intellectual property rights] policy.

Oveall, the authors conclude that Embrapa has been very successful because its research foci have treated “practical problems of agriculture” which allowed the agency to quickly deploy new technologies and innovations to Brazilian farmers.

However, much of author’s research is based on identifying the factors for success in the period from its founding in 1973 to 2004. Therefore, Correa and Schmidt leave the reader guessing about the more recent period and whether more recent productivity gains are in some way related to Embrapa’s work or driven by new factors associated with the private sector.

For those interested in understanding EMBRAPA and its role in pushing Brazilian agriculture to superpower status, this briefing paper is essential reading.

Read the entire publication here.

 

Correa, Paulo and Christiane Schmidt.

“Public Research Organizations and Agricultural Development in Brazil: How Did Embrapa Get It Right?”

The World Bank. Economic Premise. Number 145. June 2014.

 

 

The U.S. – Brazil Battle Over Cotton Subsidies

Posted on by Mark Langevin

By Mark S. Langevin, February 6, 2014

The U.S. government is dead set against India and other governments around the world providing financial support to their poor farmers. At the same time, the United States is once again squaring off with Brazil, in another round of the long running “cotton dispute” between the two nations over U.S. subsidies. The U.S. government’s strategy of non-compliance with WTO rules against those subsidies has a clear goal. In soccer terms, it seeks to compel Brazil to accept the consolation match – rather than raise the champion’s trophy by winning U.S. compliance. A little bit of history is in order. In 2005, in a decision hailed widely at the time, the WTO’s Dispute Settlement Body (DSB)ordered the U.S. government to eliminate its cotton production subsidies as well as its agricultural commodity export guarantee programs. Read the entire article at The Globalist here.

Langevin: Brazil Is Too Big to Lose

Posted on by Mark Langevin

 

“Langevin Brazil Is Too Big to Lose”
December 30, 2013
The Houston Chronicle
by Mark S. Langevin, Ph.D.

Texas is the commercial gateway to Mexico, but few understand the central role the Lone Star State plays in U.S.-Brazil relations.

Texas exports to Brazil are worth $10 billion and thousands of jobs. Brazil is one of state’s fastest-growing export markets through sales of crude oil, oil and gas equipment and services, chemicals, aviation products and agricultural products. Brazil and its national oil company Petrobras are ramping up oil and gas exploration and production activities throughout the massive, offshore and ultra-deepwater “pre-salt” reserves to double petroleum production by 2020. Texas-based oil and gas firms will play measurable roles in this oil bonanza.TexasFlag

Brazil’s chemical and plastics industries are on the rise, providing even more opportunities to Texas-based equipment manufacturers and service providers. Clearly, Brazil cannot realize its tremendous potential for oil and gas, chemical, and polymer production without Texas. Also, the state’s aviation industries will likely increase exports to Brazil as well. Brazil is one of the largest helicopter markets, due in large part to the expanding offshore petroleum production. Aside from civilian uses, Lockheed Martin and Bell Helicopters will tender bids for a growing list of military procurement contracts as Brazil becomes one of the top 10 defense spenders in the world by 2020. Texas is big on Brazil, but the state’s potential to do business with 200 million Brazilians will require greater bilateral cooperation between the governments of Washington and Brasilia to facilitate trade, open new markets and overcome the so-called “cotton dispute.”

Read the entire Op-Ed at The Houston Chronicle here.

Brazil and Genetically Modified Seeds

Posted on by Mark Langevin

Drake Bennet writes,

“Notwithstanding Brazil’s unabashedly leftist government, the country has embraced GMOs with a vengeance. Partly that’s because Brazilian farmers, lacking the sort of subsidies and price supports that the U.S. government showers on its politically important farming class, are more price-sensitive when it comes to such things as seeds, pesticides, and herbicides. Brazilian farmers have that much greater reason to embrace seeds that yield more or require fewer pesticides and herbicides, as some GM varietals do, says Mark Langevin, director of Brazilworks and an international adviser to the Brazilian Cotton Producers Association. And the Brazilian government has made a priority of attaining energy independence through sugar cane ethanol, which is driving genetic modification programs such as that at CTC, a giant bio-factory.”  Read more from Blloomberg BusinessWeek here.

Deterring Deforestation in the Amazon

Posted on by Mark Langevin

New research indicates that space-age technology and good old law enforcement may account for approximately half of the avoided deforestation in the Brazilian Amazon during the last six years.

The Climate Policy Initiative recently published, “DETERing Deforestation in the Brazilian Amazon: Environmental Monitoring and Law Enforcement,” authored by Juliano Assunção, Clarissia Gandour, and Romero Rocha, researchers at the Núcleo de Avaliação de Políticas Climáticas of PUC-Rio.

This rigorous policy evaluation research effort attempts to reveal a causal chain that links the space-age technology of Brazil satellite based, “Real-Time System for Detection of Deforestation or DETER with federal government law enforcement, through the Brazilian Institute for the Environmental and Renewable Natural Resources (IBAMA) to bring about increasing numbers of fines and other law enforcement sanctions that serve to discourage and prevent deforestation activities.  This research suggests that such a causal chain, the result of a command and control public policy made possible by the creation of DETER by the Brazil’s National Institute of Space Research (INPE), is responsible for approximately one half of avoided deforestation in the Amazon basin between 2007 to 2011 through improved mechanisms for detecting and targeting law enforcement activities.

To reveal this causal chain, Assunção, Gandour and Rocha show that increases in the number of IBAMA issued fines led to measurable decreases in deforestation as measured at the municipal level.  Accordingly, the authors conclude,

“The adoption of DETER-based monitoring and targeting of law enforcement significantly increased IBAMA’s capacity to identify and reach deforestation activity as it happens, thereby also increasing its ability to punish illegal deforestation (2013:4).”

Moreover, the increasing capacity of Brazil’s federal government to monitor deforestation and punish it does not measurably impact local agricultural, although it may prove to push agricultural activity toward more intensive, productive methods now and in the future.

The authors are careful to separate the positive impact of monitoring and law enforcement from the overall federal government policy, “The Action Plan for Prevention and Control of Deforestation in the Legal Amazon (PPCDAm),” enacted in 2004 to provide an integrated approach to preventing deforestation which includes DETER, but also features incentives for sustainable economic activities.

This working paper seems to highlight the increased capacity of IBAMA to target its law enforcement assets in the Amazon region through DETER to achieve remarkable results.  As the authors note, “Deforestation [in the Amazon] observed from 2007 to 2011 was 75% smaller than it would have been in the absence of fines…” levied by IBAMA.  Moreover, the authors’ research leads to the sensible conclusion that such monitoring and law enforcement activities pay for themselves and more. Accordingly,

“Assuming that IBAMA’s annual budget from 2007 to 2011 was $560 USD (value of the 2011 budget) and that INPE’s annual budget in the same period was $125 million USD (value of its 2010 budget), any price of carbon set above $0.76 USD/tCO-2 would more than compensate the cost of environmental monitoring and law enforcement in the Amazon (2013:19).”

The authors also imply that continued technological innovation to improve DETER detection of deforestation through cloud coverage could pay even larger dividends in terms of avoided deforestation, the expenses of which would be more than compensated by the international market for carbon offset credits.

The conclusions alone deserve intense policy debate in Brazil and around the world, but the methodological framework also deserves applause since it attempts to apply sturdy propositions associated with law enforcement research upon the Amazon and its five hundred plus municipalities (the level of analysis for the study).  According to the authors, DETER’s inability to detect deforestation through cloud cover creates methodological rationale for comparing rates of IBAMA fines with deforestation rates at the municipal level, a methodological innovation worth greater scrutiny and recognition.

Overall, “DETERing Deforestation in the Brazilian Amazon: Environmental Monitoring and Law Enforcement,” deserves a close read, reflection, and a prominent role in relevant policy debates in Brazil and around the world.

Narratives of Brazil-Africa Cooperation for Agricultural Development: New Paradigms?

Posted on by Mark Langevin

Lídia Cabral and Alex Shankland of the Futures Agricultural Consortium (FAC) have released a concise descriptive and analytical treatment of Brazil’s expanding agricultural cooperation in Africa, “Narratives of Brazil-Africa Cooperation for Agricultural Development: New Paradigms?” This article is a must read for understanding Brazil’s foreign policy in the region as well as international efforts to assist Africans make the move toward commercial agriculture.

 

Brazil’s economic stability and growth during the last decade have opened up a number of possibilities for international cooperation, including, but not limited to a growing economic and political footprint in Africa.  This growth is best expressed through the evolution and increasing stature of the Brazilian Cooperation Agency (ABC) under the direction of the Foreign Ministry (Itamaraty). Indeed, ABC’s budget has grown threefold between 2008 and 2010 under the direction of Marco Farani (page 7).  ABC’s development assistance is framed through a set of criteria that reflect the Brazilian state’s overarching foreign policy principles, including: 1) joint diplomacy based on solidarity; 2) demand-driven action in response to demands made by recipient countries; 3) efforts to recognize local experience and adapt the Brazilian experience to local conditions; 4) no imposition of conditions; 5) no association with commercial interests or profit; and 6) no interference in domestic issue of partner countries.

 

Cabral and Shankland do not fully evaluate the application of these criteria, and certainly note that there are increasingly overlaps between ABC assistance and the increasing presence of Brazilian transnational corporations such as Vale and Odebrecht.  Rather than drawing direct linkage, the authors suggest that the activist foreign policy of former President Lula in the region, and his current non-official role in bring Brazil and Africa together, both drove ABC toward a greater role in Africa, especially the Portuguese speaking countries, and the growth of Brazilian FDI and expansion of Brazilian headquartered transnational enterprises into Africa.

 

In 2009, ABC spent $362 million USD or approximately 0.02% of the GDP of the country, but that 68% of this total was dedicated to membership payments to International Governmental Organizations with technical assistance comprising only 13% of the total (page 6).  Much of the technical assistance was provided in concert with Brazil’s Agricultural Research and Extension agency, EMBRAPA, whose role in Africa continues to expand and develop.  During the period from 2003 to 2009, the number of technical assistance projects directed by ABC grew from just 23 in 2003 to 418 by 2009, demonstrating both the growth of ABC and the new dimension of Brazilian foreign policy, international cooperation through development assistance.  Most of these technical assistance projects are administered by either EMBRAPA for agriculture or the Fundação Oswaldo Cruz (FIOCRUZ) in the area of public health.

 

Clearly Africa has become the focus for ABC and its technical assistance projects with 57% of all projects in 2010.  With the five Portuguese speaking countries accounting for 74% of all of the African projects and Mozambique becoming the largest recipient country (page 9).  In addition to the work of ABC, EMBRAPA and FIOCRUZ, Brazil’s development bank, the BNDES, has increased its activities as well, offering favorable credit facility programs aimed at Small and Medium sized Enterprises (SMEs) who are venturing into the African marketplace.

 

EMBRAPA presence in Africa has expanded in part due to Brazil’s growing foreign policy focus on the region and in part because the African savannah shares many of the same productive characteristics as the Brazilian Cerrado region that has now become the epicenter of modern Brazilian agriculture. Indeed, the announcement that EMBRAPA would create the Center for Strategic Studies and Training on Tropical Agriculture (CECAT) in part reflects the commitment of EMBRAPA to expanding its technical assistance programs in Africa.  Along with the emphasis on tropical agriculture, the ABC and EMBRAPA work in Africa also reflect Brazil’s dual commitment to developing family farming while also strengthening agribusiness through investments in infrastructure and the encouragement of profitable scales of economy.  Brazil’s cooperation through the “More Food Africa Program” and the “Food Acquisition Program” attempt to assist family farming in the region while also supporting efforts to obtain food security.  In addition, EMBRAPA supports a growing number of efforts launched by Brazilian agribusiness groups to develop commercial scale agricultural projects in such countries as Mozambique and at the invitation of recipient country governments.  Currently, the Brazilian and Japanese governments are working with Mozambique to implement a number of EMBRAPA administered technical assistance programs alongside a growing contingent of private firms and groups working with Mozambique organizations to deepen commercial agriculture in the country.

 

Cabral and Shankland suggest that such rapid growth of ABC and technical assistance in Africa will likely set off an institutional reform process to focus responsibilities and tasks, rather than mixing them with the direct and traditional diplomatic activities carried out by the Itamaraty; and that such reforms will likely evolve through a confluence of Brazil’s altruism in Africa alongside the growing private sector role in the region, all within Brazil’s growing projection of geopolitical power through its growing association with Africa.  These authors’ working paper provides a sturdy description and analysis of the process in recent years; and forms a foundation for future studies of Brazilian foreign policy in the region and efforts to contribute toward African rural development for some time to come.  Moreover, they suggest that Brazil’s role in Africa may indeed provide a new paradigm for development assistance. Stay tuned.

Brazil in Africa

Posted on by Mark Langevin

Christina Stolte and Chatham House recently published a briefing on Brazil in Africa, Brazil in Africa: Just Another BRICS Country Seeking Resources?   The November 2012 briefing explores Brazil’s rapidly growing engagement with African nation-states, in particular Angola, Mozambique, and South Africa.  The briefing advances the following conclusions:

  • Over the last decade, Brazil has expanded its engagement with Africa, doubling its diplomatic presence from 17 to 37 embassies.
  • New economic partnerships have been forged, raising trade with Africa in the same period from US$4.2 billion to US$27.6 billion.
  • Oil and other natural resources account for 90% of Brazil’s imports from the continent and Brazilian investment is focused mainly on Lusophone Africa.
  • Brazilian policy-makers see Africa’s biggest potential as providing a consumer market for their country’s manufactured goods.
  • Brazil also uses its Africa policy as a means to achieve its foreign policy goal of being recognized as a major power.
  • South–South cooperation is a key driver of Brazil’s Africa policy as it is seeking support for a permanent UN Security Council seat.
  • Brazil advocates South–South cooperation projects that are based on its own development experience. Biomedical and health research and agricultural research have been turned into effective foreign policy instruments.

Chatham House reports that in 2009 some 6.6% of Brazil’s imports came from Africa, mostly oil and other natural resource based commodities while only 3.4% of Brazilian exports were destined for Africa, mostly to Angola, Egypt, Mozambique, and South Africa.  The level of trading is growing, boosted by the increasing investment of Brazilian trans-nationals, including Petrobras (oil and gas), Odebrecht (construction), and Vale (mining).  This engagement, while fundamentally based on African natural resources, is also the result of the international diversification of these Brazilian companies, whose investments in Africa are geared for the long term and facilitated by the Brazilian government and its growing commitment to play a supportive role among many African countries.  Indeed, BNDES, the Brazilian development bank, provides much needed credit lines for infrastructure construction, mostly in Angola, Mozambique, and South Africa.

The report notes,

“Stressing the benefits of their country’s engagement in Africa, Brazilian officials therefore frequently refer to the employment and training that Brazilian firms provide for the local workforce. In Angola, Odebrecht is, as noted, already the biggest employer and Brazil maintains that its approach towards Africa is generally focused on generating development and benefiting the local population. President Rousseff therefore has pledged that Brazilian companies willing to invest in Africa will leave a legacy to the local population by transferring technology, providing vocational training and offering social programmes. Like her predecessor, she is convinced that the Brazilian approach ensuring benefits on both sides compares favourably with China’s.”

Despite the evident increases in investment and trade, the report argues that,

“The intensification of economic ties, particularly trade, over the past decade was driven by government initiatives during the left-wing Lula administration rather than by Brazilian business itself.”

Building stronger ties with Africa and many of its fastest growing and more largest nations provides Brazil with a broader geopolitical foundation for exerting its global leadership as well as a myriad of opportunities for Brazilian headquartered firms who may enjoy competitive advantages, at least with the Lusophone countries of the continent.  Alongside the expanding trade and investment linkages, the Brazilian government has been instrumental in establishing more developmental ties with a broad cross-section of African countries in such areas as agriculture and rural development, rural electrification and biofuel production, the fight against hunger and poverty, health development assistance-including HIV-AIDS prevention and treatment programs among other efforts.

Stolte documents the argument that Brazil’s recent engagement in Africa is constructive, interactive, and mostly serves mutual interests, both public and private.  She notes the rivalry with China’s relatively recent entrance into the continent as well, but falls short of advancing any comparative conclusions.

This briefing is certainly a must read for those interesting in understanding Brazil’s importance in Africa and emerging opportunities for both Brazilian society and its government.

Brazil’s Lessons in Rural Development

Posted on by Mark Langevin

The Washington Office on Latin America (WOLA) and researchers Joseph Bateman and Viviane Brochardt, with contributions from Silvio Porto have published a brief analytical guide to Brazil’s efforts to reduce rural poverty during the past decade.  Also, there is a special section on water and projects to expand potable water access to increasing numbers of rural residents.  The authors add great value to their policy study by placing it within a Latin American comparative perspective, providing sensible recommendations for policymakers and non-governmentals working with family farmers and rural residents throughout the Latin American and Caribbean region.

Click here to Read Brazil’s Lessons in Rural Development: Family Agriculture, Access to Water, and Civic Engagement 

Mato Grosso Soy Growers Reject Monsanto’s Royalty Agreement

Posted on by Mark Langevin

Brazilian Soy Farmers Reject Monsanto’s RR Royalty Offer:

Mato Grosso Producers Have Two Options

(Translated by BrazilWorks from the original announcement published by Aprosoja)

APROSOJA (the Brazilian Soy Producers Association) reports that a General Assembly composed of the Mato Grosso Federation of Agricultural Producers (FAMATO), Unions of Rural Producers, and APROSOJA met on January 22, 2013 with significant representation of every region of the state and resolved by unanimity to reject the agreement proposed by Monsanto with respect to the collection of royalties for the Roundup Ready (RR) seed.

The representative organizations of agricultural producers of the state of Mato Grosso have worked tirelessly to protect the rights of rural producers and respect the law.  We all want Monsanto to comply with Brazil’s legal requirements in reference to the case given the various judicial decisions handed down with respect to the RR patent, its expiration in 2010, and its current public domain legal status.

Thanks to these legal victories obtained through the collective action of FAMATO, the Union of Rural Producers, and APROSOJA; Monsanto will offer individual agreements to all rural producers throughout Brazil, not just those of Mato Grosso. Despite this company’s recent suspension of royalty collections for the RR soy seed, our representative organizations recommend that producers DO NOT sign any accord that would authorize Monsanto to continue to collect royalties on RR as practiced at the mills and contested in the courts by our sector.  Moreover, we continue to fight to collect those royalties paid unnecessarily to Monsanto in the past.

Given this scenario, a rural producer in Mato Grosso has two options should the company reinstitute royalty payments.

1. Make a Judicial Deposit of the royalties charged by the company. To do this, growers should contact their municipal rural producer union (or nearest union) to better understand how best to exercise their right to make a judicial deposit in lieu of a direct payment to Monsanto.  It is important to remember that this option only applies to producers in the state of Mato Grosso.

2. The second producer option is to sign the individual agreement that will be proposed by Monsanto to all growers in Brazil as a consequence of the collective action organized by producer representatives in Mato Grosso. However, this option IS NOT recommended by the producer representatives in Mato Grosso.

We recommend that producers prevent the collection of any payments at the mill during the 2012/13 harvest and immediately deliver a copy of the Resolution of Agreement (available at the website of APROSOJA) to all buyer companies.

Henceforth, the discussion of the expiration of the RR seed patent continues without the cited company receiving any royalty payments and producers making a judicial deposit of the charged amounts until the case comes to a final resolution.  We are demanding that Monsanto return the illegal collections, in double, corresponding to those payments made after the expiration of the relevant patents related to the RR seed technology.

APROSOJA, FAMATO, and the Rural Producer Unions of Mato Grosso ratify our commitment to soy producers of the state to continue to work toward the defense of your interests anchored to the principles of the rule of law, transparency, and honesty.

We recognize that our investments in research, especially biotechnology, are fundamental to advancing the competiveness of Brazilian agriculture, especially agricultural production in Mato Grosso.  Our investments lead to increases in productivity, reduce production costs, and guarantee the sustainability of productive system.

Because we recognize and value the important research and technological contributions made by both public and private corporations, we want to clarify that we support payments for intellectual property (royalties).  Moreover, we defend the fair collection of royalties in accord with Brazilian patent legislation.

Brazil Nominates Ambassador Azevedo to Lead WTO

Posted on by Mark Langevin

MercoPress reports that Brazil’s Foreign Ministry announced on Dec. 29, 2012 that the country’s Permanent Representative to the World Trade Organization (WTO) would be nominated for the Director General of the WTO.  MercoPress reports that Ambassador Azevedo joins,

“eight other candidates who have thrown their hats into the ring, including South Korean Trade Minister Taeho Bark. Costa Rica, Ghana, Indonesia, Jordan, Kenya, Mexico and New Zealand have also put forward candidates.”

Accordingly, Azevedo’s candidacy reflects Brazil growing global leadership role as well as the importance it places on the WTO as an essential institution of international trade regulation.  Indeed, in its press release the Foreign Ministry reminded readers that Brazil is a founding member of the WTO and has played a leading role in the development of the multilateral trading system and is certainly a key player in the Doha round of negotiations.  Clearly, Ambassador Azevedo has played a central role in articulating Brazil’s preferences and working through the many conflicts that have so far stymied the Doha negotiations, including the current ongoing saga of the case against U.S. cotton subsidies.

The WTO faces an important moment as increasing numbers of countries raise tariff and non-tariff barriers to cope with the global economic downswing, including Brazil.  Brazil seeks to work through the WTO to improve trading conditions, including raising the issue of “currency misalignment” that has a measureable impact on export competitiveness around the world.

Over the last decade I have followed the cotton case and come to an appreciation of Ambassador Azevedo’s work and challenges. During the past year, in my role as International Advisor to the Brazilian Cotton Growers Association (ABRAPA), I have met up with Ambassador Azevedo and exchanged ideas about the cotton case.  While I am in no position to endorse any candidate, I do believe that the WTO would be well served by a Brazilian with the professional expertise and political patience that Ambassador Azevedo has demonstrated in his role at the WTO.

If member states are serious about overcoming the political and economic hurdles to coming to a groundbreaking Doha agreement, or simply trying to improve the trading system so that more nations enjoy the fruits of expanding exports and imports, then Ambassador Azevedo would be a sensible pick.

I will be rooting for the Ambassador, Brazil, and what both can bring to the commanding heights of global governance.