Brazil in quandary in efforts to step up agricultural production

 

 

Brazil may be forced into intensive farming and ranching to meet rising world food demand due to deforestation laws. 

 

Brazil is not clearing enough land for agriculture so farming needs to be intensified, according to Blairo Maggi, governor of Mato Grosso state.

 

For Brazil to realise its agricultural potential in the years ahead, infrastructure improvement is a must, but environmental regulations and rising global food demand remain as tough challenges for Brazil, according to Maggi.

 

There is a plan to convert pastures into cropping areas, and pastures in high quality areas should be targeted, said the governor.

 

But this would mean less pasture for ranchers, who currently produce on average about one head of cattle per hectare. To deal with the situation, ranchers would need to find ways to maintain cattle production using a far smaller area, which points to intensive ranching.

 

But condensing cattle operations without reducing production would be costly, and it has been suggested that that ranchers could operate alongside row cropping. Income from strong grain and soy prices could buffer the increased costs of raising cattle on less land.

 

The deforestation of the Amazon has been controversial, and some huge beef companies including Marfrig and JBS have signed pacts not to source from ranchers that raise their cattle on deforested land.

 

The beef sector is not the only casualty. Mato Grosso, Brazil's largest soy producing state, has been unable to expand its cropping area due to stricter environmental laws that help protect the Amazon from deforestation.

 

This poses a problem because consumers in developing countries are growing richer and the demand for meat will increase, which in turn will boost demand for livestock feed grains such as corn and soy.

 

Brazilian farmers complain their hands are bound, as they are restricted by tough preservation laws while having to compete with other agricultural producers worldwide that are not bound by strict regulations.

 

Maggi highlighted his state's environmental preservation efforts, but stressed that food production needs to be increased because people worldwide needs to eat.

 

Still, it is expected that Brazil to overtake the US as the world's top soy producer and exporter in the next 10 to 20 years. This outlook is more conservative than other outlooks, which put the timeframe for Brazil to overtake the US at five to 10 years.