Agribusiness and Sustainability in Brazil. JSPS Symposium March 15-16, 2013 at Rikkyo University Yoichi Koike Ritsumeikan University

Transcription

1 Agribusiness and Sustainability in Brazil JSPS Symposium March 15-16, 2013 at Rikkyo University Yoichi Koike Ritsumeikan University

2 Brazil : An Agriculture Superpower? The world faces many problems: Poverty, hunger, deforestation, aridification and desertification, and climate change Brazil is in a privileged position in the world debate on food and environmental crisis Brazil is blessed with fertile farmland and water Brazil: an Agriculture Superpower? Necessary conditions for sustainable development: Innovation, Social Inclusion and Environmental Sustainability

3 1.Agribusiness Agriculture Agribusiness

4 Structural Change of Agriculture Land utilization Rapid increase of temporary and permanent crop land Drastic drop of pasture land Rapid increase of cattle raising Increase of cattle per ha(0.86 in 1986 to 1.08 in2006) Increase of planted pasture Slightly decrease of employed people in agriculture Advance of mechanization Unequal distribution of farmlands remains unchanged Gini coefficient: 0.857(1985), 0.858(1995), 0.872(2006) Relocation of farmland: Advance of agriculture frontier (Cerrado and the Amazon )

5 Agricultural Policy Two objectives: Agribusiness and Family agriculture Two ministries: Ministry of Agriculture, Livestock and Supply: Promotion of agribusiness Ministry of Agricultural Development: Democratization of the agrarian structure, basic food production, generation of occupation and income, combat to the hunger and the misery, promotion of the citizenship and social justice Complementary or contradictory? Run after two hares?

6 Key Indicators of Brazilian Agriculture Eatablishments(1,000) 4,924 4,993 5,159 5,802 4,860 5,175 Total Area(1,000ha) 294, , , , , ,941 Land Utilization(1,000ha) Permanent Crops 7,984 8,385 10,472 9,903 7,542 11,612 Temorary Crops 26,000 31,616 38,632 42,244 34,253 48,234 Natural Pasture 124, , , ,094 78,048 57,316 Planted Pasture 29,732 39,701 60,602 74,094 99, ,437 Natural Forest* 56,223 67,858 83,152 83,017 88,898 93,982 Planted Forest 1,658 2,864 5,016 5,967 5,396 4,497 Employed People(1,000) 17,582 20,346 21,164 23,395 17,931 16,568 Tractors Used 165, , , , , ,673 Livestock(1,000) Cattle 78, , , , , ,613 Fowl 213, , , , ,538 1,401,341 (Note) *Legally reserved forest etc. (Source) IBGE, Agriculture Census 2006, Rio de Janeiro, 2009.

7 Family agriculture holds majority of establishments but minority of farmlands Region Establish -ments Family Agriculture (Law No.11326) Area(ha) ha/est. Establish -ments Non Family Agriculture Area(ha) ha/est. Brazil 4,367,902 80,250, , ,690, North 413,101 16,647, ,674 38,139, Noertheast 2,187,295 28,422, ,711 47,261, Southeast 699,978 12,789, ,071 41,447, South 849,997 13,066, ,184 28,459, Centralwest 217,531 9,414, ,947 94,382, (Note) Definition of family agriculture: the farmer who holds land less than 4 rural modules etc. (Source) IBGE, Agriculture Census Family Agriculture 2006 Preliminary Results, Rio de Janeiro, 2009

8 Agribusiness: its Importance Steep decline of Agriculture s share in GDP 12.4%(1970),10.9%( 80),8.1%( 90),5.6%(2000),5.5%(2011) Agribusiness: a driving force of economic growth Definition of agribusiness: Agriculture and related activity Importance of agribusiness in GDP(2011): Input sector 2.62%, agriculture and livestock 6.38%, processing 6.32%, distribution6.84% Agribusiness earns major part of Brazilian foreign exchange. Brazil is a main producer and exporter of sugar, soybean, beef and other agricultural and livestock products.

9 Agribusiness GDP Distribution Processing Agriculture and Livestock Inputs (Source) Cepea-USP/CAN.

10 Agribusiness Earns Major Part of Brazilian Foreign Exchange Total Export Agribusiness Export Total Import Agribusiness Import Total Trade Balance Agribusiness Trade Balance Million US Dollar (Source) MAPA, AgroSat Brasil.

11 Brazilian Agribusiness in the World Prodution(1,000t) Farm Area (1,000ha) 2011/ / / / / / / /22 Corn 56,651 70,421 13,782 14,381 10,717 14, Soybean grain 71,100 88,913 24,266 28,590 34,139 44, Soybean Cake 28,731 34,385 14,441 16, Soybean Oil 7,426 9,007 1,556 1, Wheat 5,680 6,937 2, Coffee 50* 71* 1,955 1,442 33* 38* Sugarcane 607, ,206 9,060 10,911 Sugar 38,653 48,603 27,385 39, ** Orange Juice 19,332 23, Export(1,000t) Share in World Trade(%) Chichen 13,028 20,332 4,191 5, (Note) *million bags(60kg), **2010/11. (Source) MAPA, Brasil Projeções do Agronegócio 2010/2011 a 2020/2021, Brasília, 2011 : Brasil Projeções do Agronegócio 2011/2012 a 2021/2022, Brasília, 2012.

12 Soybean Goes to China Production and Trade of Soybean Grain 2008/ / / / /13 Production(1,000t) Brazil 57,800 69,000 75,300 66,500 81,000 USA 80,749 91,417 90,605 84,192 80,858 Argentine 32,000 54,500 49,000 41,000 55,000 China 15,540 14,980 15,100 14,480 12,600 India 9,100 9,700 9,800 11,000 11,500 Total 211, , , , ,717 Import(1,000t) China 41,098 50,338 52,339 59,231 63,000 EU-27 13,213 12,674 12,482 11,812 11,300 Mexico 3,327 3,523 3,498 3,400 3,350 Japan 3,396 3,401 2,917 2,759 2,600 Taiwan 2,216 2,469 2,454 2,285 2,300 Total 77,391 86,838 88,804 93,055 96,309 Export(1,000t) Brazil 29,987 28,578 29,951 36,315 37,400 USA 34,817 40,798 40,849 37,063 36,605 Argentine 5,590 13,088 9,205 7,368 12,000 Paraguay 2,283 4,654 5,138 3,200 5,100 Total 76,894 91,862 91,116 90,425 98,850 (Source) USDA, Oilseeds: World Markets and Trade,

13 Multinational major grain companies organize and control the soybean global supply chain (Note) Crushing capacity by company (%) in 2012: Bunge 20%, Cargill 14%, ADM 12%, Andre Drayfus 10%, Amaggi 8%, cooperatives 5%. source: a Japanese trading company.

14 Innovation in Agriculture Development of new seeds Precision agriculture (farming management based on observing and responding to intra-field variations) Cerrado (Brazilian Savanna) : New frontier of farmland GMO Crops Bio-energy Development of medicine, cosmetics and other chemical products

15 Cerrado : Brazil s New Farmland Total area: 204 million ha Land capable for agriculture: 139 million ha Land already developed: Pasture: 54 million ha, arable land: 21.6 million ha (permanent crop :85%, annual crop; 15%), e afforestation area: 3.4 million ha Responsible for total harvest(2009/2010): Soybean: 54%, cotton: 95%, coffee : 23%, cattle:41%, beef production:55%, milk production:41% Innovation: Soybean seed appropriate for tropical climate, irrigation, no-tillage farming, contour cropping, granary and transportation system

16 Restrictions on Agriculture Fragile transportation and other physical infrastructure Low value added of products (commodity) Weak brand power Unreliable food safety: advanced but not enough in quality labeling, transparency, GMO free, consumer protection Exclusion of small farmers and landless workers Environmental deterioration

17 2. Bio-energy (Agro-energy) Importance of renewal energy Hydraulic power, wind power, ethanol and bio-diesel Agro-energy Objective: Alternative energy development and social inclusion though employment and income generation Ethanol Bio-diesel

18 Increasing Importance of Agro-energy Renewal energy accounts for 46% and ethanol for 11% 1000 petroleum equivalent ton Other Renewable Energy Sugarcane Derivative Firewood Hydraulic Power Uranium Coal Natural Gas Petroleum (Note) Domestic energy supply. (Source) MME, Energy Balance 2011 (Base year 2010), Brasília, 2011

19 Amazing Progress of Ethanol National Alcohol Plan in 1975 Political and diplomatic use of ethanol by Lula s Government Employment and income generation Kyoto Protocol and carbon free energy Putting flex fuel cars onto the market Efficient and low cost supply

20 Upsurge of Ethanol Production ,000 m Anhydrous 5000 Hydrous / / / / / / / / / / / / / / / / / / /11 (Source) 1974/75~2009/10: MAPA, Anuário Estatístico de Agroenergia 2010 ; 2010/11~12: UNICA, UNICA Data.

21 Vehicle Registration(passenger and light commercial cars) by fuel type- locally manufactured and imported 3,500,000 3,000,000 2,500,000 2,000,000 Gasoline Ethanol Flex fuel Diesel 1,500,000 1,000, , (Source) ANFAVEA.

22 Problematic Results of Ethanol Energy Reduction of gasoline use and CO2 emission Employment generation Formally employed worker (1,000) in 2008: 482(sugarcane cultivation), 585(sugar production), 227(ethanol production) million(grand total including indirect employment) Stagnant employment creation because of the mechanization in sugarcane harvest aiming at decreasing CO2 emission Relocation of farmland and domino effect triggered by competition for land among the crops: Land for sugarcane cultivation was partially supplied by the conversion of pasture into cropland. But the shortage of cropland in Sao Paulo, the main sugarcane area, thrusts out other crops production into Cerrado. Subsequently the competition for land among the crops in Cerrrado has displaced the growing area of soybean and other crops to Amazon area.

23 Sugarcane and Relocation of Farmland Land use change, (1,000ha) Sugarcane Other crops Pasture Sao Paulo Minas Gerais Parana Mato Grosso 25 1,634-1,437 Mato Grosso do Sul Goias ,041 Baia Maranhao Piaui Acre Para ,502 Rondonia Tocantins (Source) Harfuch, Leia, Modeling Land Use and Land Use Change in Brazil, slides presented to US Department of Energy's Biomass 2009 Conference, at the Gaylord National Harbor in National Harbor, Maryland., March

24 Bio-diesel Program and Unsatisfactory Results Bio-diesel Program in 2004 Objectives: Social inclusion of small farmer in Northeast through creation of employment and income Development alternative energy Measures: preferential fiscal and financial treatment to procurement of oil crops from family agriculture Unsatisfactory results : Stagnant production of oil crop production because of their small and unstable supply. The soybean produced by big farmers has become a main source of bio fuel.

25 Emerging Bio-diesel 300,000 6 B100 Production (1,000 m3 ) 250, , , ,000 50,000 Production Mix Ratio - 01/ / / / / / / / / / / / / / / / Legal Mix Rate (%) 0 (Source)ANP, Dados Estatístico Mensais.

26 Soybean oil is a major source of bio-diesel 3,000,000 2,500,000 2,000,000 other materials animal oil and fats cottonseed oil soybean oil m3 1,500,000 1,000, , (Source)ANP, Anuário Estatístico 2012.

27 3. Environmental Deterioration Environmental deterioration Deforestation and forest degradation Decreased and unstable rainfall Droughts Farm land degradation Environmental deterioration restricts the agriculture

28 51% of the world net deforestation took place in Brazil -5,211 World -2,642 Brazil -3,997 South America Central America Caribbean North America Europe 676 Asia 2,235-3,414 Africa -6,000-5,000-4,000-3,000-2,000-1, ,000 2,000 3,000 Annual decrease in (1,000ha) (Source) FAO, The State of World Forests 2011

29 Deforestation of the Amazon Curbed? Other States Rondonia Para Mato Grosso Km * ** *** (Note) * average, ** average, ***estimate. (Source)INPE-PRODES: Monitoramento da Floresta Amazônica Brasileira por Satélite.

30 Forest Degradation in the Amazon Continues State Deforestation( km2) Forest Degradation(km2) Acre Amazonas Amapa Maranhao 631 1, ,976 4,230 2, Mato Grosso 2,678 3,258 1, ,951 12,987 8,486 2,502 Para 5,526 5,607 4,281 3,770 3,899 8,264 1,559 3,499 Rondonia 1,611 1, Roraima Tocantins Legal Amazon 11,651 12,911 7,464 7,000 15,983 27,413 13,301 7,508 (Source) INPE.

31 Invasion of Soybean Cultivation into the Amazon Unit:1,000ha Brazil 11,585 11,703 13,694 23, North Amazonas Tocantins Para Rondonia Northeast ,441 1,857 Southeast 1,120 1,134 1,135 1,990 1,517 South 6,159 5,419 6,101 8,689 8,942 Centralwest 3,895 4,554 5,537 10,883 10,461 Mato Grosso 1,559 2,238 2,907 6,122 6,227 (Source)IBGE, Produção Agrícola Municipal.

32 Brazilian Agriculture is Responsible for Global Warming Structure of Greenhouse Gas Emission* % 90% 80% Garbage 70% 60% Change of Land Use/ Deforestation 50% Agricurture 40% Industry 30% 20% Energy 10% % The World Brazil (Note) *CO2 換算 (Source)CAIT: Climate Analysis Indicators Tool(

33 Environmental Degradation Limits Agriculture Cerrado Drying up caused by irrigation, land degradation caused by intensive use of fertilizer The Amazon Rainfall decrease and droughts at a short interval Temperature rise The Amazon s climate is related to the rest of Brazil and South America Decrease and unstable rainfall Environmental deterioration and climate change gives limits on agriculture

34 Conclusion Agribusiness should be: Innovative development of new products, seeds, growing etc. Socially inclusive and governed supports to small farmers food safety though transparency etc. Environmentally sustainable Economic activities should be limited to the extent in which the ecosystem could regenerate (Herman E. Daly) Alternative agriculture Agro-forestry, organic agriculture etc. Change of consumer behavior