Role of agriculture sector in Brazil’s economy

Muhammad Mumtaz

agriculture-sector-brazil-economyIn present world, Brazil is one of the leading economies with incessant increase during the last one decade. Agriculture sector, inter alia, with major contribution in Brazil’s economy brings about the country a major international agricultural exporter. It is worth mentioning that Brazil is the third leading producer of agricultural products in the world.

This sector is considered as the backbone of Brazil’s economy and is a key for its economic growth and foreign exchange. The sector accounts for about 33% of gross domestic products and 42% of total Brazil’s export. Likewise, the sector also contributes almost 37% for its labour force. Brazil is today the leading exporter of sugar, coffee, orange juice, beef, poultry, soybeans, cotton and tobacco. It is the world’s largest exporter of sugar cane, poultry meat and ethanol. Brazil’s exports of soybeans are also at the top in the world. By the mid of 2013, its soybean exports increased 26 percent, from 22.9 million metric ton (mt) to 26 million mt in comparison with previous year. Moreover, the crop production has increased almost 400% since 2000. Today the country’s crops production has crossed 120 billion reais compared with 30 billion reais in the year 2000.

In order to achieve specialty and leading role in agriculture sector, the government of Brazil has taken effective steps which has paved for its way in elevating to the world-renowned status in this sector. The country has revolutionized its own farms by strengthening small family farms. It may be pointed out that 85% of all farms belong to family farms in Brazil.

In 2004, Brazil introduced the National Plan of Agricultural Reform with the aim to enhance and encourage small-scale productivity. Likewise various other programs were launched to capitalize the small scale agro-businesses, such as introduction of the crop guarantee in 2002, insurance-giving subsidy to farmers and risks covering policies related to droughts and floods. Creation of the public purchasing program food acquisition program in 2003 gave the easy access of these family farms to market.

Another attempt by incorporating national school feeding program aiming the national schools would get meal from these family farms, is a marvelous success and been playing healthy role in this sector. About 30% funds have been allocated from national education to purchase food from these family farms. One of another striking example is biotech crop production. Brazil is the second largest grower of biotech crops in the world. Brazil got US$6.6 billion economic benefits from this sector during a decade and US$2 billion for 2011 alone. Likewise Brazil is producing multiple foods without damaging the environment and emitting GHG. Similarly the ethanol production chain, known as the most efficient in the world, driven by a dynamic business sector accustomed to innovating and running risks.

By doing all these efforts, Brazil has successfully taken on the leadership in the generation and implementation of modern, tropical agriculture technology and has a robust agro-industry. Due to acquirement of advance technology in the industry, domestic productivity have reached more than 70% in last one decade which is a record in the world. Brazilian Ministry for agriculture is responsible for managing the advancement of such technology and mechanization related to agriculture. In 2000, the ministry introduced a program “modernfleet” for modernizing the machinery used in farming. The government is continuously investing in the fields. It is estimated that about US$ 1.80 billion have been invested to purchase tractors and other agri appliances. The government not only is putting emphasis to modernize the machinery but equally encourages the research and innovative techniques.

The use of modern technologies plays a key role in renovating country’s traditional Agro system. Today, Brazilian Agriculture Research Corporation (Embrapa) is one of the largest research and genetic improvement centre in the world. The primary focus of Brazilian research is to develop a sustainable agriculture that produces a variety of quality and clean foods.

The commitment and success of Embrapa can be surmised by its statement saying that “every R$ 1 invested in Embrapa generates an average return of R$ 13.20 for the Brazilian society.” Moreover Embrapa and the other research centers are responsible to bring innovations in Brazil’s agriculture. Today Brazil’s farm budget has increased about $64 billion for the year 2013-14. Likewise in 2012-13, federal government has invested almost $55.5 billion for agriculture business crop. It is supposed to be the highest amount ever invested in this sector. It is pertinent to mention here that this annual budget has increased upto six-fold in last one decade.

In these days, the demand for Brazilian products especially agro-products have significantly been increased all over the world. It is also a fact that Brazil has lot of spare farmland that can be utilized. Based on Brazil’s performance, its achievements and commitment to promote agriculture sector, it is believed that Brazil would attain the status of biggest food suppliers in the world in near future. Pakistan, on the other hand, is also an agricultural country, relying heavily on this sector. This sector accounts about 24% of Pakistan’s GDP and for half of employed labour force. It is also the largest source of foreign exchange. I believe Pakistan and Brazil have a wide range of areas for cooperation in the field of agriculture. Pakistan can learn a lot from the successful and role model experiences of Brazil.

The writer is M.Phil Scholar in Govt & Public Policy and attached with National Defence University Islamabad.


Courtesy Frontier Post

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