A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
Terre-net
  Editorial  
 

Brazil: The world’s sixth economic power
with two-faceted agriculture



Frédéric Hénin, Editor in Chief, Terre-net


Article published in Terre-net Magazine



The per-capita gross domestic product of $10,000 is masking significant disparities. In rural areas, they lead to a two-tier system of agriculture and the existence of two ministries of agriculture.

Today, Brazil plays in the big leagues. With a $1,780 billion gross domestic product (GDP), it is the world’s 6th economic power, behind France and ahead of the United Kingdom, Canada and Italy.

Accounting for 5 percent of GDP, agriculture is one of the key sectors of the Brazilian economy. The whole agricultural and agro-food complex accounts for about 22 percent of GDP (2011 CEPEA-USP figures) and 39 percent of total Brazilian exports in 2012 (MAPA).

With a $79 billion trade balance in 2012 against $96 billion in exports, agriculture has largely played a part in Brazil economic recovery since the late 1990s through the influx of foreign currency.

By employing 19 percent of the total workforce, agriculture is a factor in poverty reduction. Driven by economic growth, it has declined by half during the past twenty years, but wealth gaps are still very notable. The per-capital GDP of $10,000 (or 1/3 of the French GDP) is masking significant disparities. In rural areas, this leads to a two-tier system of agriculture and the existence of two ministries of agriculture.


NINETEEN PERCENT OF THE WORKFORCE

Family farming accounts for 85 percent of all farms, provides 70 percent of all foods consumed, but only represents 20 percent of added value.

The average size of a family farm is 18 hectares (44.5 acres), against more than 300 hectares (750 acres) for market-oriented farms. Yet, 39,000 farms of over 2,000 hectares (4,950 acres) use 42.5 percent of the country’s land, and are operating along with 4.3 million small family farms. And among these, we count 3 million farmers working less than 25 hectares (62 acres) each, that is to say 5.1 percent of Brazil’s total farmland, and poor farmers (1.5 million) who benefit from social programs to fight poverty.

Small size farming is laboring to enter markets and earn revenues. Employing over 75 percent of Brazil’s agricultural workforce, it mostly involves food crops (beans, manioc and rice) that is less capital intensive.

The repeated annual plans are aiming to both tap the Brazilian agricultural potential and ensure a more unbiased economic growth. To that end, the government leans on the 90 million hectares (225 million acres) of available farmland (mostly degraded grazing land, without affecting the Amazon forest), and on the prospects of increased global demand for agricultural products in the coming years. But most of the land given to the landless is public land and not “confiscated” land.

The Ministry of Agriculture, Livestock and Supply (MAPA) is in charge of “export” agriculture, while the Ministry of Agrarian Development (MDA) is in charge of agrarian reform and family farming (€800 million). Taking into account associated private funds, the spread is more unbalanced: €46 billion for the MAPA’s Plano Safra, and €7.5 billion for the MDA plan.


TWO MINISTRIES FOR TWO SYSTEMS OF AGRICULTURE

Each year in June, the government launches a new development plan. Or rather two plans: A Plano Safra for commercial farming and a Plano Safra for family farming.

The 2013-2014 MAPA plan to support Brazilian commercial agriculture that was launched on June 4, 2013 bolsters the importance of the public authorities’ financial commitment. Its key measures are including:
    - Assistance in obtaining investment financing with preferential rates, harvest expenses or specific crops (coffee and biofuels). They amount to BRL13.6 billion (about €54 billion), a 18 percent increase over the previous year;

    - Support for marketing through a minimum price system for a portion of crops;

    - Support for individual insurance, with the stated objective of insuring 20 percent of farmland against the current eight percent, by a 70 percent increase of premium defrayals;

    - Creation of private and public stockpiling, support to agronomic research and to health sand phytosanitary protection throughout the territory.
One of the priorities of the Brazilian agricultural policy is establishing the financial conditions to increase output and improve family farming productivity.

Provided with only 14 percent of funding allocated to the whole agricultural sector, the Safra Plan (MDA + private funds) for family farming in 2013-2014 is nevertheless ambitious. It includes among others:
    - “Top preferential rate” funding (PRONAF) allocated to crop expenses or investments (“Mais Alimentos” program);

    - Specific programs to guarantee prices through cash advances that can be transformed in subsidies according to market conditions (which equates to counter-cyclical support);

    - The obligation to get 15 to 30 percent of biofuel production supplies from family farming.
The declared view is fighting poverty by associating family farming to markets.


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Paris, 10 December 2018