Watch out Europe, the Brazilians are coming!
2024 Nuffield CSC in Brazil
This year’s Nuffield International Contemporary Scholars’ Conference was hosted by Nuffield Brazil in Campo Grande and Bonito, in the State of Mato Grosso do Sul, from 8th to 18th March. As happens each year, 100 or so Scholars from all the Nuffield World came together to seed their network, to develop their personal and leadership skills, learn teamwork, debate through co-operative conversations and to learn more about global and local (Brazilian) agricultural realities and challenges.
Ten days, even this intense, is too short to learn all about a country’s agriculture and its challenges. But we were left with no doubt that Brazil has woken up to the necessity of addressing its serious sustainability difficulties, and that we should take their ability to overcome them very seriously indeed.
A powerhouse of agricultural production and trade
In the last 50 years, Brazil’s agriculture expanded rapidly, off the back of deforestation of the Atlantic Forest in particular, “With Broadax and Firebrand”, as Warren Dean put it in his 1997 book. While Brazilian agriculture grew at the expense of nature in land use change of vast tracts of land for cropping and livestock, the development of double annual cropping and improving yields have compounded this in recent years. Since 1961, the value of its agricultural output has been multiplied nearly eight-fold to US$250bn.
Agribusiness accounts for 25 to 30% of Brazil’s GDP, 20 to 25% of employment, and 22% of the country’s export revenue.
Eight out of every ten glasses of orange juice imported around the world come from Brazil, and 80% of Europe’s toilet paper and tissue are made with the cellulose (wood pulp) produced from its eucalyptus plantations.
At 747m tonnes (2018), it is the world’s largest producer of sugarcane, a substantial amount of which goes to the manufacture of ethanol. It surpassed the US to become the largest producer of soybean in 2020, with 154.6m tonnes produced in 2022. Much of its output is exported, especially to China, as a feed ingredient. Brazil is the third largest producer of maize in the world, behind the US and China, with 132m tonnes produced in 2022. Brazil is the largest producer of coffee, and is among the top producers of cassava, oranges, rice, bananas and cotton.
Of course, Brazil, with one of the largest cattle herds in the world of around 193 million, is also the second largest beef producer behind the US, and the first exporter of beef.
Pesticides and fertiliser dependence still off the charts
Brazilian agriculture is the top consumer of pesticides in the world at 719,000 tonnes, a long way ahead of the US’s 457,000 tonnes. It is the third user of fertilisers behind China and India, utilising 21.2 m tonnes of nutrients (sources: UNFAO and International Fertiliser Industry Association). Out of the top ten pesticides used in Brazil, five are banned in Europe (atrazine, acephate, chlorothalonil, and chlorpyrifos among them). Brazilian farmers remain dependent on pesticides despite big moves into GM, and they are also among the heaviest global users of glyphosate.
Many of the substances used in Brazil and now prohibited in Europe, some of which are categorised as “highly hazardous”, are actually sold into Brazil by European headquartered chemical companies. Numerous NGOs like Human Rights Watch, the Heinrich Boel Stiftung have called out the impact of pesticide use on human health and the environment, and have called on the Brazilian government to work to reduce or outlaw their use. This part of Brazil’s ESG on agrifood production remains genuinely problematic, and the crop which makes up the largest part of Brazil’s exports – soybean – are highly dependent on both fertiliser and pesticides.
There is a long way to go to bring Brazil’s chemical addiction back to levels which would satisfy trade negotiators from Europe and elsewhere. However, Brazil’s agritech industry and officialdom are developing new products and pathways for greener ways to fight pests and diseases in crops, and to optimise soil health. These include the development and adoption of innovative less toxic products and the use of nematodes (natural parasites of pests). EMBRAPA, Brazil’s Agricultural Research Corporation is a world class government agency focused on agricultural research. In this space, it advocates, demonstrates and encourages the adoption of cattle grazing to break the cropping cycle – a practice we are assured is increasingly used by Brazilian farmers to improve soil health and reduce reliance on fertilisers.
Massive social inequalities
A visit to a smallholders’ fruit production and processing co-operative – Sidro Polpas – and an indigenous community of Terena people set up in 1910 on a fraction of the land they controlled before colonisation, provided real insight into social inequalities in Brazil. In the face of the huge scale of agricultural production which surrounds both land concessions, it is hard to see how their future can be secured.
The co-operators of Sidro Polpas gain access to the full rights of their land after 10 years, and many choose to sell to local soy producers who outcompete any other potential land purchaser. Co-operators’ children benefit from the income their parents could generate from their production and have in many cases been educated away from the co-operative. Few have any interest in taking over from their parents. The co-op produces frozen fruit pulp and juices for sale in the school food programme and makes an important nutritional contribution to children’s diets, but its future appears very fragile.
The indigenous community is self-managed and selective as to those who can join. The priority is to ensure newcomers are of indigenous origin to maintain their heritage and traditions (though not all belong to the Terena people). Securing a market for food and craft products remains a challenge in a country beset by infrastructural limitations – kilometres of dirt road bring you to the community and to the co-operative. Distribution of those small communities’ productions to the cities is difficult.
SENAR, the Brazilian National Rural Learning Services, combines some of our FRS labour sourcing and Teagasc training missions. We learned that farm workers earn an average of US$420 per month. The average salary is generally complemented by housing, contribution to utility bills, and even food for the workers, which do not appear in that figure. Some of the farm worker housing we saw along the road was in very poor condition.
Various sources suggest that the average monthly salary for Brazilian workers (all industries) is between US$700 and US$1700 – and so farm workers are at the very low end of the scale.
ESG taking greater importance
Deforestation has continued in recent years. It was reported last summer to be at its lowest in six years, after a 66% plunge in July 2023, but this was compared to an exceptionally high July 2022 according the National Institute for Space Research. Recent productivity increases have been less about new land clearances, and more about improved yields.
We found Brazilian agribusinesses stakeholders to be very cognisant of, and very sensitive to, the criticisms of the environmental and social record of their agriculture. We were hosted by the Governor of Mato Grosso do Sul, and some of his administrative team was just returning from a trip to meet with the European Commission. In Brussels, they had been negotiating on aspects of the Green Deal which increasingly expect equivalent climate and biodiversity action by food suppliers wanting to sell into Europe as part of the trade deal with the Mercosur countries. The European ban on food/feed products produced through deforestation is one of the main issues.
And Brazil absolutely plans to trade into the European market and is investing and preparing its agriculture to grow its share.
At a large JBS meat processing facility in Campo Grande, the brand-new recycling and anaerobic digestor facilities are presented as evidence of the company’s commitment to sustainability. Massive investments made in the last 12 months without any government support, they appear as yet somewhat out of context, but were obvious showcases to prove the company’s commitment to ESG. You could take the view that this looked like an expensive token put in place for the benefit of visitors – and in part it was. However, JBS also has a senior team responsible for their sustainability action and credentials who managed our visit and were at pains to show they mean business on sustainable food production. Yes, they are keen to communicate to visitors and clients, and an element of this is about being seen to act more sustainably, but the commitment is real.
Regardless of who has the political power – President Jair Bolsonaro could not have held a more different discourse on the environment and deforestation than new incumbent Lula da Silva – agribusiness understands that ESG demands from Europe and other developed markets are their minimum market access requirements.
National policies for Brazilian agriculture, introduced since 2020, have been scrutinized by the OCDE which found that the legal framework and the Brazilian Agricultural Policy for Climate Adaptation and Low Carbon Emission (ABC+) is well developed to adapt its agriculture to climate change. It also found that agricultural supports, mostly in the form of credits, are rightly conditional on the implementation of conservation, mitigation and adaptation practices – though they needed monitoring and evaluation.
The OECD also takes the view that Brazil is one of the most biodiverse countries in the world. This may be at risk from land use policy, however, and it also recommends greater conditionality in loans and supports to agriculture to increase commitment to environmentally sounder practices.
New laws mandate nature protection
We heard a great deal of the legislation enacted in the last two years which obliges farmers to keep significant wild areas on their land.
The law splits the country into three “biomes”: the Amazon Forest, the Cerrado (savanna, or scrub of native vegetation) and the rest. Farmers who farm in the Amazon Forest must preserve 80% of their land for nature. Those farming the Cerrado scrub must provide 30% for nature, while farmers in all other areas must protect 20% of their land for nature.
In addition, tops of hills, riparian edges, steep slopes, springs and sandbanks are all subject to additional mandatory protections to minimise soil erosion and optimise biodiversity.
Fairness and just transition?
My European perception that Brazil’s agriculture is an environmental thug that needs its wings clipped to save the planet was roundly challenged. After all, the major developments of agriculture in Brazil in the last 50 years, obtained at the expense of the natural biomes, were merely an acceleration of what happened in Europe over 400 years!
I believe there is a real issue of just transition and fairness at stake here. The rural communities of Brazil, from the wealthy European descendant landowners to the impoverished rural communities, including indigenous peoples, have, I believe, the right to develop their agriculture and optimise their economic and social opportunities in a sustainable way.
The success of Brazil’s impressive food production can help lift rural communities and enable their economic, social and educational progress. As a European, I will insist on the need for Brazil to clean up its act, but I do not feel the right to stand in the way of this development when they do.
…and finally: a potted history of Brazil in five commodity “cycles”
One of the first presentations made to the assembled Nuffield Scholar was by Mairun Junqueira Alves Pinto, of Harven Agribusiness School, and it neatly summed up for us the history of the colonisation of Brazil and the exploitation of its resources by Europeans from 16th to 20th century:
From the “discovery” of Brazil in the 16th century by Portuguese explorer Pedro Alvarez Cabral, Brazilwood, the source of a red dye valued by Europeans, was exploited and exported to Europe – giving the country its name.
Later, into the 17th century, the sugarcane was brought to Brazil from Madeira, planted, harvested, then exported to Europe, giving rise to the exploitation of slaves traded from Africa.
Then came the discovery and exploitation of gold, which delivered immense wealth and fuelled inland expansion, urbanisation and local markets.
In the 18th century, coffee was brought to Brazil from French Guyanne, also using the labour of slaves and leading to the growth of Sao Paolo state and the reorganisation of Brazil’s administration, and then its independence.
After the abolition of slavery in late 19th century and into the 20th century, began the rubber cycle. Latex exports began in 1880, and the second industrial revolution in Europe (cars, tyres…), the two world wars, etc. led to huge growth in the northern states.
Thereafter, land was cleared to make room for a massive agricultural revolution – which as we have learned, is still ongoing.
What a fascinating, promising country!
© Catherine Lascurettes, Cúl Dara Consultancy
