Brazil’s agricultural land is exceeded only by China, Australia and the United States, and agriculture plays an important role in the country’s economy. Primary agriculture accounts for 8 percent of GDP, while agricultural products account for about 30 percent of exports. Brazil’s overall exports in agribusiness have grown an average of 14 percent a year over the past decade to $76.4 billion,Grain output in Brazil over the past 20 years has risen 150 percent, while the planted area has grown only 25 percent. Much of these productivity gains have been due to domestic innovations in technology and farming practices but they are also partly thanks to increased foreign investment.
But some aspects of Brazil’s agricultural policies, notably relating to foreign investment, have been misunderstood. Recent legislation restricting foreign ownership of agricultural land has been interpreted as a ban. Not so, says Agriculture Minister Wagner Rossi, who wants to see farmers invest, not fund investors.
“Big fund investors are not welcome in Brazil. They are only here to speculate by buying land and then trying to sell it at a much higher price. That is not welcome,” says Rossi says. “But individual farmers are welcome. They help our agriculture grow, they build export potential, so this is all very welcome and we hope those types of investors keep coming to Brazil.”
Mr Rossi says Brazil has 120 million hectares of degraded land that could be converted to agriculture, which would triple the total area under cultivation.
Expanding into new areas will be necessary to achieve the government’s target of increasing grain yields by more than one-quarter to 190m tonnes per year in the next decade.
Beyond crops, the government also has plans to improve productivity in the beef industry. Brazil is already the world’s biggest exporter of beef with a herd of 205m head of cattle. The government hopes to increase the supply of beef over the next four to five years by 10-15 percent a year.
