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In 20 years, Brazil's agriculture modernizes quickly

Problems remain as a result of rapid growth

By Ken Root

RAIN CLOUDS—Scot Bailey, Anita, Iowa farmer, stands on a plateau where updrafts produce rain and cooler night time temperatures favor crop growth. The region receives 40 to 60 inches in a seven-month growing season. (Photo by Ken Root.)

Editor's note: High Plains Journal columnist Ken Root recently traveled to Brazil. Ken first traveled to Brazil nearly 20 years ago, and his observations of his recent trip compare the country's progress over that time.

Brazil is a competitor in every type of agricultural enterprise attempted in the United States and many others that don't suit the climate. The productive capacity of Brazil has yet to be realized, and its role in the exporting of raw and processed foods could well lead the world in the decades ahead. Brazil is realizing that its interior requires regulation and investment. Government policy has rapidly moved away from encouraging expansion to demanding compliance. Brazil has an economy of scale that boggles the mind, but with it there is a realization that too much power, concentrated in the hands of too few, will place the country back into the trap that has held South American countries for hundreds of years.

I first saw the Cerrados (tropical savannah) of Brazil in September 1983 as I looked out the window of a U.S. Air Force plane carrying a delegation headed by then Secretary of Agriculture John Block. As we broke through the clouds, scraggly trees covered the entire landscape except for a few geometric shapes carved out of the vast expanse.

It was really too early for anyone except a visionary to imagine the amount of land that would be cleared and converted to fields. What has happened since then is like clearing the entire Corn Belt in 30 years. The United States took a century using oxen and horses; Brazil did it with bulldozers.

In 2002, I returned again and the landscape beneath the clouds looked like Indiana. The ideal spots were almost 100 percent cleared and had been growing soybeans for years. Farmers were still moving north and attempting to bring more land into production. The tour group, many of whom were High Plains Journal readers, saw some of the last forest being converted to crop land in an area near Sinop, on the northern edge of Mato Grosso. Eighty-foot-tall trees were toppled in a region that now is under strong environmental controls to prevent encroachment into the Amazon region.

We witnessed a countryside that was "new" to farming and habitation. The towns were linear and the single road was lined with sawmills, grain and fertilizer storage, equipment sales, and in the center housing for young people who had found a better life than in the crowded cities along the coast.

Now, 11 years later, the changes are even more evident. States like Bahia and Mato Grosso have matured and their place in the nation's government and economy are established. The countryside is still very sparsely populated but with much improved roads that even have passing lanes on the hills. The roadside stores show a more middle-aged population, and Brazil's culture has asserted itself so that the people feel that this is their home rather than an outpost.

Bill Horan, a partner in Horan Brothers Agricultural Enterprises, which farms and produces specialty crops near Fort Dodge, Iowa, made his first trip to Brazil in 1998, a long time ago by development standards. He has returned several times in the past decade. "What impresses me every time is the progress that they're making in infrastructure, particularly. They're fixing the roads. They're fixing their bridges. It sounds like the railroad is coming. The port facilities are being worked on, which is going to really affect Iowa farmers, northwest Iowa particularly where I am, because as our business has changed, we're doing less and less exporting and more and more domestic use of our products with ethanol and hogs and cattle. So, the world is changing in agriculture. It's always interesting to see how the Southern Hemisphere and the Northern Hemisphere are interacting in that new change."

Leading the delegation were two state secretaries of agriculture: Delaware Secretary of Agriculture Ed Kee, past president of the National Association of State Departments of Agriculture, along with Iowa Secretary of Agriculture Bill Northey, current president of the NASDA organization. Each invited 20 farmers and all paid their own way, including the state officials. Larry Rupiper, president of Rupiper Travel in Yankton, S.D., took care of all travel arrangements and was with the delegation through all of the stops in Brazil. I brought along Nathan Matta, videographer, to document the trip so we filled every seat of a large, comfortable Mercedes bus. We drove over 1,600 miles in a week of touring.

Dropping a group of Americans into the Brazilian environment is always fun to watch because the notion that we lead the world in size, productivity and technology gets questioned very quickly. Kee had not seen Brazilian agriculture and was taken by the hospitality of the farmers and the interest in U.S. farming practices. "During this trip, we're picking up really good signals of cooperation and communication between the countries, between the various trade associations, to address common problems for the good of both industries. That's encouraging. I always think about the growing population and meeting world food demand and yet maintaining profitability at every farm level. That's what we're after in all of this."

Kee and those farmers who had spent their careers focused on U.S. development had to stretch their minds to grasp how much had been done to bring central Brazil into production in such a short time. Kee was no exception: "This is all new. This is all since the mid-80s. The entrepreneurial spirit and the willingness to take a risk and the challenges they had to overcome logistically to get to this point is really remarkable."

To make a comparison, Mato Grosso is roughly seven times the size of Iowa but the total number of farmers is just over 26,000. There are 10 growers who each have more than 500,000 acres. Northey laughed as he extrapolated that out to the ridiculous: 44 farmers of that size could farm the entire state of Iowa, about two and a half counties each. "We have a lot of big fields in Iowa. We certainly have a lot of corn and soybean growing across. Here you can go seeing cotton or corn or soybeans in one field for many, many miles. As far as you can see, as flat as it is, you can see tens of miles, it looks like, of crop and then sometimes six or eight or a dozen combines going in the same field."

The beauty of traveling in Brazil in February is that you can see harvest and planting all going on at the same time. The wet season comes in October, allowing the first crop, primarily soybeans, to be planted across vast regions. In February, the soybeans are ready to harvest but the rainfall will continue for another three months, so the fields are quickly planted to the second crop, usually corn. And the productivity continues until May when the rains stop and the land stands hot and dry for five months.

Northey says comparing U.S. farming and the massive holdings in Brazil is impossible. "Here, they bought maybe a chunk of 10,000 acres. I don't think we'll ever see that kind of situation."

To show the growth of Mato Grosso's agriculture almost requires fastening of one's seatbelt: In the past 11 years, Brazil had its planted area with soybeans increased by 65 percent. Soybean production increased by 92 percent in the same 11 years. Converted to our form of measurement, average yields in the fertile regions of Mato Grosso and Bahia that did not have drought stress are 49 to 54 bushels per acre.

The corn that is planted as the second crop is not heavily fertilized and yields about 90 bushels per acre. With low input costs, growers say the breakeven is about 45 bushels per acre.

Cotton is also a popular crop for those farmers who are large enough to own ginning equipment and have the capital to pick the long staple varieties. In the state of Bahia, we drove a long day to visit Carroll Farms, an American-owned operation that has been in business since 2002. The family farms in Illinois and Brazil with their son, John, as the farm manager at their southern headquarters. The operation revealed indications of a culture that was not as welcoming and peaceful as one would be led to believe. A guard stood near the wall topped with razor wire and a guard tower. He opened the gate with a friendly smile but we were informed that they have been robbed of their agricultural chemicals at gunpoint and have since put in the defensive wall, fences and tower, equipped with 24-hour security and Rottweiler dogs patrolling between the fences.

Carroll Farms is about 30,000 acres just off a paved road on a plateau where the rainfall is predictable. "We get about 40 inches in seven months," said John Carroll. "That allows us to go in with a primary crop of corn or cotton and get good yields."

He showed us corn that was in the milk stage and anticipated the yield would be about 190 bushels per acre. The cotton was just putting on blooms and would not be mature for another three months. "We get about 1,400 pounds of lint and it is just below Supima in quality."

Another reason for a crop like cotton is the ability to reduce hauling costs. "A load of cotton bales is worth about $55,000 compared to a load of corn or soybeans that is much lower in value," said Carroll, explaining their management decisions.

We also learned of the government's policy on worker protection from Carroll Farms. Last year they were fined $800,000 U.S. dollars for failure to provide safety equipment and adequate housing to a group of workers who were hired to chop weeds and do other manual work. According to Carroll, worker protection officials of the government showed up and found that one man had a hole in his boot and another had removed his because they hurt his feet. The housing they were using, provided by the contractor who supplied the workers, was deemed substandard and Carroll farms was fined. They appealed and the amount was reduced to $250,000 U.S. dollars. Carroll's reaction: "We are going to cut our use of workers and increase size and automation of our equipment as quickly as possible."

The extent and speed of regulation in Brazil is as amazing as their expansion of production. Many of these regulations were implemented about five years ago and they are aggressively enforcing them. As a spray plane taxied up to a strip just behind the Carroll Farm's compound, we were shown another example. The workers mixing and loading the products were in full personal protective gear.

"On the environmental side, yes there is an EPA type entity here that is worried about if we have all of our chemicals applied correctly," Carroll said. "Our jugs rinsed and returned. Is that done in the right amount of time? Is every single one of them returned? We're checked up on a lot. For both labor and environmental issues, we are checked up on 10 times more here than we are in the United States." Brazil has a 98 percent return rate on pesticide containers, due to the strict regulations, one of the highest in the world.

It could be assumed that a foreign farmer is singled out but Brazilian growers told similar stories of the strict enforcement by the government agencies and the abrupt end to expansion of farming areas. "The Environmental Police carry guns," we were told, and they have a strong presence wherever they suspect noncompliance with regulation. Deeds to property are cross checked to see if the "environmental reserve" is separate for each farm so that growers don't all claim the same land as their portion of the habitat set aside for native species.

Driving across the landscape one can see the logic in the native lands as they have a setback of 50 to 600 meters from rivers and are contiguous so animals aren't trapped in an isolated ecosystem. A jaguar from the Amazon could travel hundreds of miles through the corridors and back again. There are reports of just that by those who watch for tracks and wildlife.

Brazil's biggest challenge is infrastructure. Too many miles exist between the production fields and the ports. Farmers are innovative, converting some crops to high-value products, but the roads are proof that volume is still the name of the game. As we saw in years past, trucks fill the roadways with multiple trailers hauling 900 to 1,500 bushels and traveling three days to reach the port, then back hauling inputs for three days before getting one day of rest and doing it again. The railroads heading toward Mato Grosso are still not a reality and the road to the Amazon is not yet paved. Farmers say the federal government is actively working on a road north from Mato Grosso to Santarem, an Amazon port, but nothing concrete, or asphalt, is yet known about its completion.

Brazil's agriculture is modern in the technology that is available to farmers. It is handicapped by limited means to ship from the interior and a country that cannot consume nearly as much as farmers can produce. Exports of all types of products, from meat to grains, are key to profitability of farms. Agribusiness makes up 37 percent of the economy with 71 percent percent of the soybean being exported.

Farming in the tropics has been adapted by the will of these innovative people. Asian soybean rust is quite prevalent in the humid climate of Mato Grosso but they control it and remove all host plants during the dry season. Labor is still cheap and abundant by American standards, but the cost of workers and the investment in their welfare has risen sharply in recent years. Brazil has inflation in check but interest rates are high. The government has some corruption but more light is being shined on the actions of politicians, and media is not hesitant to point out the truth.

Large farms in Brazil are efficient and have opened up the interior to gain great wealth. But there were indications that mega owners may have reached their zenith. A former Mato Grosso legislator, who owned and operated one of larger seed, livestock and farming operations we visited, said: "The future goal of our government is to increase the number of farmers on this land."

As fast as Brazil is evolving, we should be able to determine if he is correct in the next 10 years.

Editor's note: Ken Root has been an agricultural reporter for 37 years. Root now does daily radio and television programming and is a columnist. He can be reached at kenroot@gmail.com.

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