Sat, Sep 01, 2018 - Page 9 News List

Soy boom devours Brazil’s tropical savanna

Concerted efforts have been made to protect the Amazon rainforest, pushing the agriculture business and its environmental implications to the cerrado, its neighboring grassland

By Jake Spring  /  Reuters, CAMPOS LINDOS, Brazil

Brazil’s agriculture sector grew a sizzling 13 percent last year, while the overall economy barely budged. The nation’s ability to keep producing new farmland cheaply has given it an edge over rivals and cemented its status as a vital supplier to the world’s tables.

“Imagine, if not for Brazil’s production, how much more hunger would there be,” Pansera said.

GREEN REVOLUTION

About the size of Mexico, straddling Brazil’s mid-section from its far western borders with Paraguay and stretching northeast toward the Atlantic coast, the cerrado has seen about half of its native forests and grasslands converted to farms, pastures and urban areas over the past 50 years.

Deforestation in the region has slowed from the early 2000s, when Brazil’s soy boom was gaining steam. Still, farmers continue to plow under vast stretches of the biome, propelled largely by Chinese demand for Brazilian meat and grain.

The Asian nation is Brazil’s No. 1 buyer of soybeans to fatten its own hogs and chickens. China is also a major purchaser of Brazilian pork, beef and poultry to satisfy the tastes of its increasingly affluent consumers.

Rising trade tensions between China and the US have only deepened that connection. Brazil’s soybean exports by value to China are up 18 percent through the first seven months of the year as Chinese buyers have canceled tens of millions of US dollars’ worth of contracts with US suppliers.

The trend bodes well for producers in the cerrado’s frontier region known as Matopiba, shorthand for the northeastern Brazilian states of Maranhao, Tocantins, Piaui and Bahia.

Land here is cheap. Virgin plots near Pansera in the state of Tocantins can be had for US$248 an acre on average, according to agribusiness consultancy Informa Economics IEG FNP. That compares with an average of US$3,080 per acre for already cleared farmland in the US.

Soy planting in Matopiba has more than doubled over the past decade.

Pansera, 50, is part of a wave of industrious transplants from southern Brazil who are remaking the region.

His formal education stopped at middle school, but he found land enough in the cerrado to match his big ambitions. He now presides over nearly 49km2 of manicured soy fields and has about 20 full-time workers on his payroll.

Pansera’s soybeans are to bring in an estimated profit of nearly 5 million reais (US$1.2 million) this year, most of which he plans to invest back into the farm.

Government policies have intentionally driven industrial-scale farming here. Short on farmland to feed its growing population, Brazil in the 1970s looked to its vast savanna, a region early explorers had dubbed cerrado (“closed”) because of its tangled woodlands.

State agriculture scientists developed fertilizers and additives to fix the acidic, nutrient-poor earth and created soybean strains that could thrive in the tropics. Arable land exploded. Within a decade, Brazil transformed itself from a food importer to a net exporter. By the 1990s, it was moving global commodities markets.

“Agriculture in the cerrado is what took Brazil to the next level,” Brazilian Minister of Agriculture, Livestock and Supply Blairo Maggi said.

Known as Brazil’s “Soy King,” Maggi is a billionaire whose family runs one of the largest private soybean operations in the world, much of it in the cerrado.

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