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 This is the GDP of Sorriso, a city in the midwestern state of Mato Grosso. The 13 greatest soy producers in the state are organizing themselves in order to export directly, in five years time, about 200,000 tons of soy. This is equivalent, in today's values, to an income of US$ 55 million per year. The city has the greatest soy productivity in the world, and a per capita income above the Brazilian average.
After transforming Sorriso, which means 'smile' in Portuguese, into Brazil's greatest soy producer, the farmers in the city in the north of the state of Mato Grosso, are organizing themselves into a consortium, called Celeiro do Norte - meaning barn of the north - to sell part of their production directly to the foreign markets.
In this way, the soy producers aim to eliminate intermediaries such as the brokers who buy their crops and then sell them to the big multinationals or the trading companies acting in the Brazilian market.
Founded 27 years ago by immigrants from the southern Brazilian states of Santa Catarina, Rio Grande do Sul and Paraná, Sorriso is responsible today for 2.8% of the grain production in the country.
The city's Gross Domestic Product has increased by 15% a year in the last two years. In 2004 it is expected to reach US$ 174.2 million. Soy alone has generated nearly US$ 70 million.
The agriculture practiced in Sorriso is considered to be one of the most modern in the world, for the rational soil employment, use of high technology and planting of varied seeds, as recommended by agricultural researches.
According to the city's Agriculture and Environment Secretary, Reinaldo Lofi, the average soy productivity in the fields is of 3,480 kg per hectare, the greatest in world. During the last harvest (2003/2004), Sorriso yielded 2,053 million tons of soy, which was cultivated in a 590,000-hectare area.
Based on performances such as this, the great rural producers are now preparing to add value to their activities. With the Celeiro do Norte consortium, the 13 greatest soy producers in the city are organizing themselves, in five years time, to directly export about 200,000 tons of soy, equivalent, in today's values, to an income of US$ 55 million per year.
Responsible for 10% of soy production in Sorriso, the farmers who are part of the consortium settled in 2004 the first contracts for direct imports, of approximately 95,000 sacks of soy, sold to Greece, Israel and China.
The producers' representative in Chicago is already negotiating the sales of soy grains to Arab importers.
"Direct exports allow producers to negotiate using the Chicago Stock Exchange quotations, directly with the importers in the buying countries. We have an agent advising us on whether or not to close a deal, based on how the soy quotations are fluctuating in the Chicago Stock Exchange. With the information he passes us, we do or don't authorize the sales," explained a rural producer and member of Celeiro do Norte, Fernando Pozzobon..
With this system, Pozzobon exported 85,000 soy sacks this year, and expects to triplicate his direct sales to international markets. At the last crop, Pozzobon harvested 15,000 tons of soy.
Bargain power
Highly capitalized, the soy producers in Sorriso organize themselves and work together not only to place their product in foreign markets, but also to buy supplies, which increases their bargain power in buying necessary inputs and machinery.
This is the case with the Celeiro do Norte members, who manage an average of 20% reduction on the prices of fertilizers, due to the high quantities bought; something around 50,000 tons per harvest.
These farmers wish to renew their harvesting machinery fleet in 2005. They wish to buy at least 100 units, at an average cost of US$ 278,000 each. They have already started negotiating with the retailers. Payment terms? In cash.
To illustrate the Sorriso soy producers' power, they may be the only ones in the country following through excessively with their commitments. One example: more than half of the US$ 87 million financed by the Bank of Brazil in 2003, which was due in May this year, was settled before the maturity date.
Reasons to smile
According to Eugênio Stefanello, professor at the Federal University in state of Paraná and the FAE Business School in the city of Curitiba, capital of that state, Sorriso is an example of the positive effects generated by soy cultures in the regional economies of Brazil.
The city per capita income is US$ 7,870, against the Brazilian average of US$ 6,300, and the city has the second highest human development index (HDI) in the state of Mato Grosso.
The President of the Sorriso Rural Union, Leonir Paulo Capitânio, says that in the last six years, the city's high agricultural productivity, for soy in particular, has created many opportunities, opened job positions in local shops and attracted the attention of big national and multinational companies.
With a population of just over 35,000 inhabitants, Sorriso has 130 factories, which generate 1,500 direct jobs. The Agriculture Secretary believes that, by the end of 2007, the city may receive investments worth US$ 522 million from grain crushing factories and slaughtering establishments, which will result in 1,200 new direct jobs.
As well as everything else, the riches generated by the soy, which move about US$ 60 million in the city each harvest, has attracted professionals in many areas. According the city hall, Sorriso currently has 350 professionals such as doctors, architects, lawyers, agronomists, dentists and engineers, which is double of what they had six years ago.
ANBA - Brazil-Arab News Agency
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It almost makes me proud to be an American to know that Brasil is using the same succesful techniques as found in the US to produce a growing middle-class, in this case, the farmers here are using what we call a "Co Op" as a way to combine resources so that all will thrive.
Once again, great story and congratulations to a hard-working group who are enjoying the fruits of their labors.
Ernest Sipes