Agribusiness in Brazil
With a modern, efficient, sustainable and competitive agriculture, Brazil has become one of the world's largest agricultural producers and exporters over the last two decades. Productivity gains, management efficiency, research, innovation, and technological development have revolutionized the country’s agribusiness sector. Brazilian agricultural production has been steadily rising over the last decades, due to the intensive use of technology in machinery, equipment and genetic improvement. These factors have pushed up the productivity of farms, especially for commodities.
Brazil has a suitable environment and conditions to increase its food production, combining 12% of the world’s water supply and one of the largest arable land areas in the world. Agricultural production is based on conservation practices and on the rational use of resources. Native vegetation represents 66.3% of the territory. The country is expected to take on a larger role in global agricultural trade. FAO and OECD rank Brazil as the second largest global supplier of food and agricultural products, on the path to become the foremost supplier in meeting additional global demand, mostly originating from Asia.
Quick facts about the Brazilian agribusiness sector
- Brazil has had a 266% increase in main crop production in 40 years, including a 254% increase in cereal production with a 33% increase of planted area;
- 2% of the Brazilian territory is used for farming (9% for crops and planted forests; 21.2% for pastures);
- In 2018, the Agribusiness sector accounted for 21.1% of the Brazilian GDP
- Agriculture accounts for 9,2% of total workforce (8.4MM);
- In 2010, the ‘ABC Plan’ was adopted by the federal government to implement the consolidation of low carbon emissions in Brazilian agriculture, while sustaining economic growth in the sector;
- Since 2010, more than BRL 17 billion (USD 4.6 billion) has been invested through the ABC Plan's funding line.
Forecasts for the Brazilian agribusiness sector
- By 2027/2028 Brazil is expected to produce 301.8MM tons of grains, up from the 248.3MM tons produced in 2018/2019;
- Brazil is expected to contribute with 40% of global yearly food production until 2050;
- Brazil is expected to be responsible for more than 45% of global sugar exports;
- Brazil is expected to become the world leader for beef and poultry, with export shares of 18% and 36%, respectively;
- Brazilian government aims to reduce CO2 equivalent emissions between 1.17 billion to 1.26 billion metric tons over the next few years.
Brazilian Agribusiness Among Giants
According to a ranking published by the Brazilian business magazine Exame, from the 20 largest companies, by net revenue, that operate in Brazil, four are active in the agribusiness sector. The sector is also extremely relevant for the Brazilian workforce, employing alone 12.8% of workers in Brazil in 2019.
Brazil has a very dynamic agricultural sector, including both huge agribusiness properties and family farming, which has a key role within the Brazilian farming model. According to the Secretariat for Family Agriculture and Cooperativism, there were 4.4 million family-farming properties in Brazil in 2017 - around 84.4% of all farming properties in the country. However, large international groups such as ADM, Agrium, Bunge, Cargill, Louis Dreyfus, Syngenta, COFCO, and Bayer, among others, have a solid foothold in Brazil.
The Brazilian government, through the Ministry of Agriculture, Livestock and Supply, has several incentive programs for agriculture and livestock, from credit lines to the enhancement of best practices and procedures. Some of these incentives are:
- Plano Safra which is the Government financing for the 2019/2020 crop cycle that will reach BRL 222.74 billion (USD 60.9 billion) with controlled interest rates to facilitate loan conditions;
- Pronamp, a government program intended to support medium-sized producers, will receive a total of BRL 23.8 billion (USD 6.5 billion) for the 2019/2020 cycle, for both investments, costs and commercialization;
- Inovagro, a program aimed at technological innovation, will receive an investment of BRL 1.5 billion (USD 410.4 million).
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