Despite Reduced Planted Area, Brazil’s Agriculture Grows 2.9%

Orange trees New information just released by the Brazilian government shows that Brazil's agricultural production generated 2.8 billion Brazilian reais (US$ 1.5 billion) more in 2006 than it did in 2005, an increase of 2.9%, driven mostly by the sugarcane, coffee and orange cultures.

The data features in the 2006 Municipal Agricultural Production – Temporary and Permanent Cultures (PAM) survey, disclosed last Wednesday, October 17, by the Brazilian Institute for Geography and Statistics (IBGE).

The production value, which corresponds to 62.3 million hectares planted in the country in 2006, totaled 98.3 billion reais (US$ 54.1 billion). The increment occurred in spite of a 3% reduction in planted area compared with the previous year.

Nevertheless, the value of the Brazilian agricultural production did not reach the same level as it did in 2004, when a record-high value of 111.2 billion reais (US$ 61.3 billion) was attained.

According to the survey, the best performance was that of sugar cane cultivation. The production volume increased by 8.1% over 2005, and the value obtained from production, of nearly 17 billion reais (US$ 9.3 billion), grew by 29% using the same basis for comparison.

The agricultural analyst at the IBGE, Alfredo Guedes, highlighted the contribution of cane culture to national revenues from agriculture.

"Sugarcane crops have been growing in recent years, and 2006 was no exception. It is the second largest culture in terms of value, responsible for 17.3% of the total agricultural production value. Production increased and prices were high as well, contributing to the 2.9% growth."

According to Guedes, the greater value generated by cane culture, which stood at approximately 3.8 billion reais (US$ 2 billion), was a result of the commodity's high prices, which in turn was a consequence of an increased demand in the domestic and foreign markets for the production of alcohol fuel.

The survey also points to a  37.1% expansion in revenues from coffee production, from 2005 to 2006. The increase is a consequence of the full crop year, with the commodity's biennial cycle ending in 2006. Weather conditions and favorable international prices have also contributed for coffee to account for 9.5% of the total national agricultural production value.

On a year-to-year basis, the output of processed coffee grew 20.2%, up from 35.6 million bags of coffee in 2005, to 42.8 million last year. According to Guedes, though, the production increase was in keeping with the expectations for a full crop year, and the differential were the product's better prices, which appreciated due to a greater demand on the international market.

Another highlight was the production of oranges, whose revenues were raised by 33.1%, accounting for 5.4% of the total financial resources generated by Brazilian agriculture. The production volume saw a 1% increase, to reach 18 million tons.

According to Guedes, though, the greater revenues were due to the raw material's higher price on the foreign market, a consequence of weather problems that affected citric fruit production in the United States, Brazil's main competitor.

In the assessment of the vice-president at the National Agricultural Society (SNA), Joel Naigele, the survey's results attest to the exuberance of Brazilian agricultural production. "I regard the data in a very positive light. Prospects are great, because with each new year, more consumers are becoming part of the market."

Naigele called attention to the diversity of agricultural production, which provides both producers and the country with alternatives whenever a certain product suffers a setback in performance, and there is a need to invest in infrastructure for the sector to continue developing.

"Brazilian farmers are the most economic in the world. We will only lose when facing the lack of appropriate infrastructure, such as roads, ports and railways, which constitute the main bottlenecks to Brazilian agricultural production."

The Municipal Agricultural Production survey investigates 63 products of the temporary and permanent national agricultural crops, based on information generated in all of the country's cities.

Data about grain, leguminous plants, and oleaginous plants, which are also included in the survey, had already been disclosed in advance by the IBGE in the month of July, pointing to a reduction in the value generated by soy, upland cotton, rice and wheat crops, which were harmed by low product prices in the international market, the appreciation of the Brazilian real against the dollar and, in some cases, drought and frost.

Despite being harmed by pricing, soy had a record-high crop (at approximately 1.2 million tons) and continues to be the culture that contributes the most to the Brazilian agricultural production value, as it accounts for 18.8% of the total value, followed by sugarcane (17.3%), maize (10.1%), coffee (9.5%) and orange (5.4%).

ABr

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