CAN BRAZIL FEED THE EARTH?
Brazil has an outstanding agricultural production and plays as key global supplier:
However, where does Brazil stand in terms of economic and social progress nowadays?
Brazil Recent Years´ Overview and Current Status
Brazil’s economic and social progress between 2003 and 2014 lifted 29 million people out of poverty and inequality dropped significantly (the Gini coefficient fell by 6.6 percentage points in the same period, from 58.1 down to 51.5). The income level of the poorest 40% of the population rose, on average, 7.1% (in real terms) between 2003 and 2014, compared to a 4.4% income growth for the population as a whole. However, the rate of reduction of poverty and inequality appears to have stagnated since 2015.
But, regardless of hard factual data, what is going on in Brazil economically and socially?
Brazil is currently going through a deep recession! The country’s growth rate has decelerated steadily since the beginning of this decade, from an average annual growth of 4.5% between 2006 and 2010 to 2.1% between 2011 and 2014. GDP contracted by 3.8% in 2015, and is expected to fall at least 3% more in 2016.
The economic crisis, as a result of the fall in commodity prices and an inability to make the necessary policy adjustments, – coupled with the political crisis faced by the country – has contributed to undermining the confidence of consumers and investors.
Please find the complete article here, sourced from The World Bank in Brazil.
But, for now, what´s the medium-term outlook for Brazil?
Brazil’s medium-term outlook will depend on the success of the current adjustments and the enactment of growth-enhancing reforms.
Raising productivity and competitiveness is the main challenge for the country to achieve higher growth in the medium-term.
With the recession of growth drivers over the past decade — credit-fueled consumption, labor expansion and the commodity boom — growth will need to be based on higher investment and productivity gains.
And how does the political scenario affect the chances for Brazil to adjust its checks and balances, in order to grow and compete globally? (Needless to say: voting counsciously!)
Following the impeachment of President Dilma Rousseff on August 31st (2016), former Vice President Michel Temer took office as the new President of Brazil. He announced that his government would pursue several fiscal adjustment measures and a reform agenda to reestablish confidence and to restore a favorable investment environment. However, implementation of the reform program has proven difficult and faces opposition in Congress.
Fiscal adjustment is undermined by budget rigidities and a difficult political environment. Less than 15% of expenditure in Brazil is discretionary. Most public spending is rigidly determined (by rules in the Constitution or other legislation) and cannot legally be reduced. Budget rigidities and pension liabilities have imposed significant burdens on subnational governments, some of which have had to delay payments and may face the risk of insolvency.
HOW CAN AGRO (& TECH) PLAY AN IMPORTANT ROLE IN THE GLOBAL AGENDA?
This video shows Brazil´s agricultural vocation and the technological gap to be faced:
Case IH and New Holland harvesters as they raise the curtain on the 2018 soybean harvest in Brazil’s rural Midwest region of Mato Grosso.
HOW WILL BRAZIL UPDATE ITS OWN TECHNOLOGY (and keep up with innovation) ?
How can technology help Latin America (and Brazil as a key player) to feed the world?
“If you want to invest in global food security, in preventing hunger in all corners of the world, then invest in Latin America agriculture,” states Luis Alberto Moreno, president of the Inter-American Development Bank (IDB) in a report highlighting Latin America’s potential to “feed the world”. According to the document, addressing humanity’s great challenge (basically, to feed a rapidly growing global population without expanding farming into sensitive areas or compromising on quality) is going to be the continent’s great opportunity. And technology has a lot to offer Latin America in its crusade.
“The potential of AgTech (agricultural technology) is absolute. We won’t be able to produce the food we need in a sustainable way without using these new technologies. It is going to be unfeasible,” says Professor Mateus Mondin, researcher at Esalq, a Brazilian college of agriculture founded in 1901 and ranked recently as the fifth best college of its kind in the world.
Latin America has a third of the world’s fresh water resources and more than a quarter of the world’s medium-to-high potential farmland. As a whole, Latin America is already the largest net food exporting region in the world. Brazil alone is the world’s largest exporter of different commodities, like sugar, coffee, orange juice, soybean and chicken meat according to the country’s Ministry of Agriculture.
“Brazil can take the lead,” says Mondum when I ask about the impact of technology adoption in a country where agribusiness represents 20 per cent of GDP and half of exports.
“We will have a competitive advantage in the commercialisation of commodities. We are going to be able to offer a commodity with better quality, lower cost and, above all, with appeal on the issue of sustainability.”
So what´s the improvement prognostics and most desirable wishlist for AgTech in Brazil?
“In a business where decisions are still often made on intuition, past experiences or even by watching the behaviour of other farmers, collection and analysis of Big Data promises to revolutionise production.”
“Agriculturists do like technology. But yes, there is a cultural issue when adopting technology because the agribusiness is marked by risk; you are at the mercy of the environment. So if the farmer doesn’t feel safe, doesn’t realise an immediate monetary return, he will probably take some time to adopt this technology,” Mondin says.
“You have to test this technology, sometimes in different agricultural cycles. And depending on which crop we are talking about, the cycle can take up to a year.”
In short, conclusions associated to LIN capabilities to support business expansion:
1. Brazil agribusiness competencies and learning-from-experience over long periods of time represents a very competitive asset to play a global feeder role;
2. More and more technology is needed and put to use to monitor, prevent and predict natural or (un)planned developments;
3. Brazil has excellent conditions to increase productivity in the fields by training and exposing people to new technologies;
4. Brazilian average working population is eager to keep itself abreast from technical & technological advancements;
5. Both leadership commitment to growing SMEs and the advent of advisors and investors that can leapfrog globalization are expected in the 4th. Industrial Revolution;
6. LIN can provide local business owners and consulting partners the access to international markets they either wish to connect with or expand to – and …
7. … generate global communication, knowledge-sharing and teamwork to create mutually beneficial opportunities, as well as …
8. … provide a well-proven business framework to assist all the involved parties in all stages of the opportunity, from proposal design to project implementation.
What´s the next step?
Question #1: Are you vocationed towards Agribusiness and AgTech and either have or are willing to structure and offer products and/or solutions in this area?
Question #2: Are you willing to explore international business opportunities and/or connect with experienced advisors to develop a global network that can support you?
What do we suggest in regards to your possible interest in obtaining LIN support?
For both questions, the answer is: if you are based anywhere in Brazil or in any Central / South American country, connect with the LRD (LIN Regional Director) that can assist you at any and stages of your opportunity mapping and solution-focused networking:
Please, take some time to navigate through our website: www.lin4you.com and let me know what attracted you the most.
Meanwhile, please, make sure you put some questions and/or doubts aside to share them with me.
Once we schedule a conversation, I will answer all your questions within my reach, get any additional clarification needed and give you valuable suggestions.
There are no costs involved, of course.
However, the potential for business will be a natural consequence of well-identified opportunities that require creative solutions and can generate customized proposals and profitable projects for all of us.
Skype ID: lubashivaya