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To Grow as Agricultural Power Brazil Needs to Fix Transport Bottlenecks

Tractor in Brazilian fieldTo create conditions for Brazilian farmers to plan their medium and long-term activities and, with this, taking the country to the position of main global producer and exporter of foods. This is the principal objective of the National Agriculture Plan of Brazil’s Ministry of Agriculture, Livestock and Food Supply and the Secretariat of Strategic Affairs (SAE).

The plan should create instruments that may further modernize Brazilian agriculture and make the agricultural policy of the country a global reference. The organization also plans to strengthen the rural class and to promote industrialization of Brazilian livestock farming.

With the objective of hearing rural leaders and gathering suggestions and subsidies from the farmers themselves for elaboration of the plan, the minister of Agriculture of Brazil, Reinhold Stephanes, and the acting head-minister at the SAE, Daniel Vargas, have been visiting the main producer regions in the country.

Last week, for example, they visited Londrina, in the North of Paraná, where they met with leaders in the sector. This is the first time that Brazil opens a discussion about the importance of having medium- and long-term planning for one of the most important sectors of the country’s economy, agriculture and livestock farming.

Stephanes considers the plan fundamental for the country to consolidate and advance further in its condition as one of the main producers and exporters of food to the world. Brazil currently answers to 25% of the global food market.

“Apart from that, it is the nation that has the best conditions in the world to produce – with available land, leadership in tropical technology, qualified professionals and production structure,” said the minister of Agriculture in the meeting with farmers from Paraná.

According to a technician at the Ministry, the plan should propose measures that terminate or minimize the bottlenecks barring the growth of agriculture in Brazil and, consequently, agribusiness itself.

Document “Brazilian Agriculture in the XXI Century”, elaborated by the SAE, shows that one of the restrictions to growth of Brazilian agribusiness is the imbalance between production capacity and logistics infrastructure. If the infrastructure bottlenecks were solved, the average rate of growth of the country’s GDP would expand significantly.

In the understanding of the SAE, to overcome the obstacle related to the transfer of crops, it is necessary to establish a new model of transport integration, coordinating highways, railways, waterways and pipelines in an efficient and rational manner.

In railway transportation, for example, the suggestion of the SAE study is to combine competition and regulation to reduce the different cost between highway and railway transportation, making the latter more efficient. The granting of new concessions for rail transportation is also part of the proposal.

For waterways, it is necessary to guarantee infrastructure in the form of locks at barrages and hydroelectric dams, a task to be undertaken by the federal government. Other measures are the implementation and expansion of waterways, necessary to expand the navigation capacity of rivers.

With regard to highway transportation, expanding and improving the grid should allow for the strengthening of relations between the economy of the country and urban services. According to a study by the SAE, it should also be necessary to duplicate and tarmac strategic highways for the transportation of agricultural produce.

Among the many proposals contained in the SAE study, the acting head-minister of the SAE, Daniel Vargas, has been underscoring, in his meetings with agricultural leaders, the need for organizing grain transportation, fighting the fertilizer cartel, recovering degraded areas, strengthening the agrofuels market and improving product certification. “These initiatives are going to strengthen trade, agricultural extension and the insurance system, aside from reorganizing agricultural markets,” says Vargas.

According to him, Brazil is currently very dependent on imports of agricultural inputs, particularly fertilizers. Crop expansion in recent years led to a growth in demand, with a strong impact on pricing.

Just to give an idea of the cartelization of the fertilizer industry in Brazil, it is enough to say that only three large groups control the market, which has an annual turnover of US$ 15 billion.

There are two proposals to that extent, elaborated by SAE. The first one is reducing the aliquot of the value added interstate tax (ICMS) on fertilizers, until prices are balanced.

The second proposal is the establishment of a state-owned, closed capital company -named Fertilizantes do Brasil S.A. (Febrasa) – that would re-establish the competitiveness of the private sector, increase food safety, and reduce the costs of Brazilian agricultural production.

To Vargas, these initiatives represent a large step forward in the new agriculture and livestock agenda for elevating Brazil to the condition of an economic and environmental power of the 21st century and the world’s leading producer and exporter of foods.

The president of the Union and Organization of Cooperatives of the State of Paraná (Ocepar), João Paulo Koslovski, claims that the proposal for elaborating a medium- and long-term plan for Brazilian agriculture has the support of the cooperatives. “For a long time now, the Ocepar has been requesting for the government to set long-term rules for agricultural production, thus allowing farmers to have weather and the market as their sole concerns.”

To Koslovski, if the proposal comes to fruition, it will represent a significant leap for the productive sector, which currently accounts for 26% of the GDP, 36% of exports and 37% of jobs in Brazil.

He also said that in May last year, the Ocepar handed to the then head-minister of the SAE, Mangabeira Unger, a 50-page document containing subsidies from the sector for the implementation of an agricultural policy in the country.

Anba

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