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Agriculture , Sustainability and Social Issues in Brazil

Agriculture , Sustainability and Social Issues in Brazil. Guilherme Narciso de Lacerda – Managing Director Social Infrastructure, Environment, Agriculture and Social Inclusion. 1. Brazil Panorama. 2. Agriculture: A profitable business. 3. Agriculture: A path to social inclusion.

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Agriculture , Sustainability and Social Issues in Brazil

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  1. Agriculture, Sustainabilityand Social Issues in Brazil Guilherme Narciso de Lacerda – Managing Director Social Infrastructure, Environment, Agriculture and Social Inclusion

  2. 1. Brazil Panorama 2. Agriculture: A profitable business 3. Agriculture: A path to social inclusion 4. Agriculture: Challenges to sustainability Summary • 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 • Agribusiness in Brazil – Exports; • Exports - Main destinations and products (2012) • Brazilian Agriculture World Rankings - 2012); • Brazil’s Social Programs; • Rural Poverty - 2010 • Public Policies for Family Farming; • Institutional Food Markets and land distribution • Agriculture and Climate Change; • Deforestation Rates in Brazil and the Amazon Fund; • The Low Carbon Agriculture Plan 5. BNDES Overview and challenges

  3. 1. Agriculture in Brazil: Brazil Panorama Agribusiness Agriculture Social inclusion Sustainability

  4. Agriculture and the Brazilian Economy Population Growth % of the country’s population Censo IBGE 2010 Brazilian GDP(2011) Source: IBGE 2010, CEPEA-USP GDP in the agri-industrial system Total AgricultureCattle-raising Inputs Industry Distribution US$ 2.46 tri 11.8% 28.8% 28.5% 30.9% Ag. 22.15% (US$ 549 bn)

  5. TheDevelopmentofModernAgriculture in Brazil • Brazilian Agriculture today • One of the leading producers on Earth; • Production spread over central states; • Increasing productivity; • Increasing use of technology and specific knowledge for the different biomes; • Increasing presence of social movements; • Significant government participation in implementing specific policies for the sector. • Brazilian Agriculture until the 1970’s • Low Agricultural production and low yields (crops at 34,000 million. ha); • Production concentrated in South/Southeast; • Lack of specific knowledge on Tropical Agriculture; • Institutional void (agricultural research, education, markets, media governmental agencies etc.). M.Lopes (2011). The task: To move from traditional agriculture to that based on science & technology Challenge: To maintain sustainable and inclusive growth

  6. GrainsandOilseedProduction, AreaandYield (1976 – 2013) Variation, 1976/77 to 2012/13 299% 43% 179% Yield (Kg/ha) Production (million tons) and area (million ha) Source: Conab.

  7. RecentDevelopmentofBrazilianAgriculture Key factors Entrepreneurship of farmers Government commitment Climatic conditions Large extension of arable land ‘ Science-based tropical agriculture

  8. Productionmodels: familyfarmingand agribusiness Family farming Non Family farming ECONOMICALLY ACTIVE POPULATION (million) ECONOMICALLY ACTIVE POPULATION (%) Source: IBGE, 2006

  9. 2. Agriculture: A profitable business Agribusiness Agriculture

  10. 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

  11. Exports - Maindestinationsandproducts (2012) Main destinations (US$ billion) Main products (US$ billion) Sources: MAPA and MDIC / 2012

  12. Brazilian Agriculture World Rankings - 2012 Orange Juice Sugar Coffee Beef SoyComplex Broiler Corn Pork 1st 1st 1st 1st 1st 1st 2nd 4th 81% 45% 28% 19% 31% 35% 22% 9% Exports 1st 1st 1st 2nd 2nd 3rd 3th 4th 57% 22% 37% 16% 24% 15% 9% 3% Production Source: USDA (May ‘13). Note: harvest 2012/13 and 2012 for meats Elaborated by: Fiesp-Deagro.

  13. 3. Agriculture: A path to social inclusion Agriculture Social inclusion

  14. 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 Source: PNAD Extreme poverty: Income below R$70 per capita/month

  15. Ongoingeconomicinclusionfuels a dynamicmarket Population by income class strata (% of people)* * Source: IPEA, based on PNAD/IBGE data. Prepared by Ministry of Finance

  16. 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

  17. Access to markets Food Security ENHANCED PRODUCTION / PRODUCTIVITY Public Policies for Family Farming PolicyInstruments Land distribution Technical aid and rural extension Infrastructure Credit Instruments

  18. InstitutionalFoodMarkets • 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 • How much – 30% of food budget • Who Sells – Family Farmers • Who Buys – Municipal and State Department of Education • Priority for local production • 250,000 families and 47 million students potentiallybenefited US$ = R$2,20

  19. Agriculture: Challengestosustainability Agriculture Sustainability

  20. Agriculture and Climate Change Elaboration: ICONE

  21. Land-use in Brazil (2011) 554 million/ha ofnativevegetation 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 ofpastures 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.

  22. Brazilianbiomes: challenge for agricultural policies Source: Embrapa (Pesq. Agrop . Bras.)

  23. Deforestation rates in Brazil Deforested area in the Amazon Biome (km²) Average deforestation rate (2001 - 2010) 16,531 km² 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.

  24. The AmazonFund • 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$273 million) including one that involves all countries within the Amazon biome. www.fundoamazonia.gov.br US$ = R$2,20

  25. Greenhouse Gas Emissions - Brazil Land-use Energy Supply Agriculture Industry Waste

  26. 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

  27. The “Low-Carbon Agriculture” Plan (ABC) Source: MAPA. Elaborated by: Fiesp-Deagro.

  28. BNDES Overview andChallenges

  29. 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.

  30. Agricultureat 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 Irrigation Infraestructure

  31. Challenges

  32. Guilherme Narciso de Lacerda guilherme.lacerda@bndes.gov.br www.bndes.gov.br

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