Agriculture, Sustainability and Social Issues in Brazil
Guilherme Narciso de Lacerda – Managing Director
Social Infrastructure, Environment, Agriculture and Social Inclusion
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Summary
1. Brazil Panorama
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Agriculture and Brazilian Economy;
The Development of Modern Agriculture in Brazil;
Key factors contributing to the recent development of Brazilian Agriculture
Production Models: family farming and agribusiness
2. Agriculture: A profitable business
 Agribusiness in Brazil – Exports;
 Exports - Main destinations and products (2012)
 Brazilian Agriculture World Rankings - 2012);
3. Agriculture: A path to social inclusion
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Brazil’s Social Programs;
Rural Poverty - 2010
Public Policies for Family Farming;
Institutional Food Markets and land distribution
4. Agriculture: Challenges to sustainability
 Agriculture and Climate Change;
 Deforestation Rates in Brazil and the Amazon Fund;
 The Low Carbon Agriculture Plan
5. BNDES Overview and challenges
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1. Agriculture in Brazil: Brazil Panorama
Agribusiness
Agriculture
Social
inclusion
Sustainability
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Agriculture and the Brazilian Economy
Milllion
Population Growth
180
% of the country’s population
160
140
120
1960 55%
2010 16%
100
80
60
40
20
0
1960
Censo IBGE 2010
1970
1980
1991
Country population
2000
2010
Urban population
Brazilian GDP(2011)
Source: IBGE 2010, CEPEA-USP
GDP in the agri-industrial system
Total
US$ 2.46 tri
Inputs
Ag. 22.15%
(US$ 549 bn)
11.8%
Agriculture
Industry
Distribution
28.5%
30.9%
Cattle-raising
28.8%
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The Development of Modern Agriculture in Brazil
Brazilian Agriculture today
Brazilian Agriculture until the
1970’s
One of the leading producers on Earth;
Low Agricultural production and low
yields (crops at 34,000 million. ha);
Production spread over central states;
Increasing productivity;
Production concentrated in
South/Southeast;
Lack of specific knowledge on Tropical
Agriculture;
Institutional void (agricultural research,
education, markets, media
governmental agencies etc.).
The task: To move from traditional
agriculture to that based on science
& technology
Increasing use of technology and specific
knowledge for the different biomes;
M.Lopes (2011).
Increasing presence of social movements;
Significant government participation in
implementing specific policies for the sector.
Challenge: To maintain sustainable and
inclusive growth
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Grains and Oilseed Production, Area and Yield (1976 – 2013)
299%
43%
179%
Yield (Kg/ha)
Production (million tons) and
area (million ha)
Variation, 1976/77 to 2012/13
Source: Conab.
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Recent Development of Brazilian Agriculture
Key factors
Entrepreneurship of farmers
Government commitment
Climatic conditions
Large extension of arable land
‘
Science-based tropical agriculture
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Production models: family farming and agribusiness
Family
farming
Non Family
farming
ECONOMICALLY ACTIVE
POPULATION (%)
Source: IBGE, 2006
ECONOMICALLY ACTIVE
POPULATION (million)
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2. Agriculture: A profitable business
Agribusiness
Agriculture
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Agribusiness in Brazil: Exports
Brazilian Foreign Trade (US$ billion)
Exports (2012)
Brazilian Agribusiness Trade
Balance
Brazilian Trade Balance Result
TOTAL
(US$242,6 bi)
41% (US$ 99.6 bn)
Sources: CEPEA/USP, CNA, IPEA, MAPA and MDIC. Elaborated by: Fiesp-Deagro.
Note:* from March ‘12 to April ‘13
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Exports - Main destinations and products (2012)
Main destinations (US$ billion)
Main products (US$ billion)
Sources: MAPA and MDIC / 2012
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Production
Exports
Brazilian Agriculture World Rankings - 2012
Orange
Juice
Sugar
Coffee
Beef
Soy Complex
Broiler
Corn
Pork
1st
1st
1st
1st
1st
1st
2nd
4th
81%
45%
28%
19%
31%
35%
22%
9%
1st
1st
1st
2nd
2nd
3rd
3th
4th
57%
22%
37%
16%
24%
15%
9%
3%
Source: USDA (May ‘13). Note: harvest 2012/13 and 2012 for meats
Elaborated by: Fiesp-Deagro.
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3. Agriculture: A path to social inclusion
Agriculture
Social
inclusion
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Brazil’s Social Programs
Over the last few years, the number of people living in poverty and extreme poverty has
fallen. This is due to economic growth and political decisions.
Temporal evolution of extreme poverty (% of population): Brazil from 2001 to 2011
9.9
9.03
7.9
7.58
7.01
5.73
2001
2002
2003
2004
Extreme poverty: Income below R$70 per capita/month
2005
2006
5.67
2007
4.77
4.61
4.38
2008
2009
2011
Source: PNAD
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Ongoing economic inclusion fuels a dynamic
market
Population by income class strata (% of people)*
* Source: IPEA, based on PNAD/IBGE data. Prepared by Ministry of Finance
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Rural Poverty - 2010
Census 2010
Brazil’s population – 190.7
million
15.6% of Brazil’s population
lives in rural areas
16.2 million Brazilians living in
extreme poverty
47% of these are in rural areas
In rural areas, one out of four
live in extreme poverty – 25.5%
IBGE
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Public Policies for Family Farming
Policy Instruments
Land distribution
Technical aid and
rural extension
Infrastructure
Credit Instruments
ENHANCED PRODUCTION / PRODUCTIVITY
Access to markets
Food Security
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Institutional Food Markets
1. Food Purchase Program (Programa de Aquisição de Alimentos – PAA)
Established in 2003, this program consists of the government buying food from family
farmers without bureaucratic barriers.

Numbers 2003 – 2011: US$ 1,45 billion, average of 160,000 families per year
2. National School Food Program (Programa Nacional de Alimentação Escolar)

Established in 2009
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How much – 30% of food budget

Who Sells – Family Farmers

Who Buys – Municipal and State Department of Education
Priority for local production
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250,000 families and 47 million students potentially benefited
US$ = R$2,20
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Agriculture: Challenges to sustainability
Agriculture
Sustainability
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Agriculture and Climate Change
Agriculture
THREATENED
Agriculture
AS A THREAT
Agriculture
AS A FRIEND
 Temperature raising;
 Land Use Changes;
 Sequestration of GGEs;
 Drought and Flood;
 Deforestation;
 Pests and diseases;
 Soil degradation;
 GGE emission reductions (no till,
pasture recovery);
 Loss of productivity;
 GGE emissions (cattle raising;
nitrogen fertilizers);
 Salinization;
 Avoided emissions: REDD plus;
 Manure management.
Elaboration: ICONE
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Land-use in Brazil (2011)
554 million/ha of native vegetation
65%
60 million/ha of production area (grains,
fruits and planted forests)
7%
38 million/ha urban areas
and other destinations
4%
198 million/ha of pastures
17%
Sources: Ministério do Meio Ambiente - MMA; IBGE – PAM (2010) e Censo Agropecuário (2006); INPE – TerraClass; Agricultural Land Use and Expansion Model
Brazil - AgLUE-BR (Gerd Sparovek, ESALQ-USP). Notas 1) Os dados de Unidades de Conservação excluem as chamadas Áreas de Proteção Ambiental –
APAs; 2) Os dados de APPs consideram vegetação nativa ripária, em topo de morros e encostas; 3) O dado de remanescentes de vegetação nativa inclui terras
quilombolas, florestas públicas não regularizadas e outros remanescentes de vegetação nativa.
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Brazilian biomes: challenge for agricultural policies
Brazilian Biomes
Area
Total
Preserved
(million Km2)
(%)
Amazonia
Cerrado
Atlantic forest
Caatinga
Pampa
Pantanal
TOTAL
4,2
2,0
1,1
0,8
0,2
0,1
8,4
85
61
27
63
41
89
69
Source: Embrapa (Pesq. Agrop . Bras.)
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Deforestation rates in Brazil
Deforested area in the Amazon
Biome (km²)
30000
km²
25000
20000
Average deforestation rate (1996
- 2005) 19.625 km²
Average deforestation rate
(2001 - 2010) 16,531 km²
15000
10000
5000
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
The Amazon Fund is an extremely important initiative to support Brazil’ s efforts aimed at combating
deforestation in the Amazon. In the last few years, Brazil has obtained huge results from this.
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The Amazon Fund
• Managed by the BNDES
• Created in 2009 with grants from
the Government of Norway.
• Donations are based on prevented
deforestation for non-reimbursable
projects.
• 43 supported projects (US$273
million) including one that involves
all countries within the Amazon
biome.
US$ = R$2,20
www.fundoamazonia.gov.br
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Greenhouse Gas Emissions - Brazil
Land-use
Energy Supply
Agriculture
Industry
Waste
Sectors
Land-Use
Agriculture
Energy Supply
Industry
Waste
Total
Millions of tCO2e
Emissions Emissions Var. 20052005
2010
2010
1.168
279
-76.10%
416
437
5.20%
329
399
21.40%
78
82
5.30%
42
49
16.40%
2.032
1.246
-38.70%
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The “Low-Carbon Agriculture” Plan (ABC)
• Launched in 2010
• Aims to stimulate new sustainable agriculture,
reducing global warming and mitigating carbon
emissions
• 6 initiatives with goals up to 2020
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The “Low-Carbon Agriculture” Plan (ABC)
No-tillage system
Expand the current 26 million hectares to 33 million hectares of
crops established by no-till. Reduce 16 to 20 million tons of carbon
emissions.
Recovery of Degraded
Pastures
Goal to transform degraded land into areas suitable for the
production of food, fiber, meat and forests, thus recovering 15
million hectares and reducing between 83 and 104 million tons of
CO2 equivalent.
Crop-Livestock-Forest
Integration
Increase system utilization by 4 million hectares and reduce 18 to
22 million tons of carbon emissions by 2020.
Biological Nitrogen
Fixation
Planted Forests
Animal waste treatment
TOTAL
Source: MAPA.
The goal is to encourage the use of this technique in the production
of 5.5 million hectares, and reduce the emission of 10 million tons of
CO2 equivalent.
Expand planted forest area in 3 million ha, reaching 9 million
hectares
Treat 4.4 million m³ of waste from pig farming and other activities,
thus preventing 6.9 million tons of CO2 equivalent from being
released into the atmosphere.
Reduce the emission of 134 to 163 million tons of CO2 by 2020
Elaborated by: Fiesp-Deagro.
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BNDES Overview and Challenges
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BNDES - Overview
 Founded in 1952 as a wholly-owned federal company
 Key instrument for implementing the federal government’s economic policies
 Main provider of long-term financing in Brazil
 Emphasis on financing investment projects
 Support for exports and the internationalization of Brazilian companies
 Small and Medium enterprises – 32% of all disbursed during 2012
In 2012, the BNDES disbursed US$ 78.7 billion
in debt, equity and grant instruments.
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Agriculture at BNDES
Who does BNDES supports?
Family farmers
Cooperatives
Medium and big producers
Trading companies
Industry
What does BNDES supports?
‘
Investment projects
and associated
working capital
Machinery
Innovation
Infraestructure
Irrigation
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Challenges
Production
CROP
Productivity/Yields
Sustainability
Social Inclusion
Reinvestment
Funding
Distribution
Commercializ
ation
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Guilherme Narciso de Lacerda
guilherme.lacerda@bndes.gov.br
www.bndes.gov.br