While many countries around the world continue to grapple with food insecurity amid rising population and urbanization, Brazil, the largest country in both South America and Latin America is on the way to achieving food security.
Agriculture comprises approximately 4.5 percent of Brazilian GDP when narrowly defined, or over 20 percent when considering the integrated agroindustry, including processed foods and beverages, and forestry-derived products as well as agricultural services.
In fact, agriculture was one of the few areas of the Brazilian economy that saw steady and strong productivity gains over the past decades, despite a recession that hit the country in 2015.
Brazil is expected to have a record soybean harvest in 2022. Total production of the oleaginous plant is forecast to be 138.8 million tons, a 2.4%, or 4.5 million-ton, increase relative to 2021, according to data from the Systematic Survey of Agricultural Production for November published by the Brazilian Institute of Geography and Statistics (IBGE).
A second prognosis for agricultural production estimates that the harvest for grains, cereals, and legumes in Brazil will yield 278 million tons in 2022, a 10%, or 25.2 million-ton, increase relative to 2021.
Yet the success story of grain production in Brazil is more than quantity.
“Our success story boils down to three things; one is the strong cooperatives that we have, secondly is the use of technology and finally our enhanced storage capacity,” says Paulo Bertolini president of Sector chamber of equipment for grain storage at Brazilian Machinery and Equipment Industry Association (ABIMAQ).
“We have leveraged technology and innovation in our farming processes. Thanks to plant biotechnology, Brazil is now the world’s second-largest producer of biotech crops, and in just a few decades, we have gone from being a basic food importer to one of the world’s largest food producers and exporters,” he explains.
Aside from the traditional function of buying inputs in quantity in order to pass savings on to members, and reselling members’ production to cut out the middleman, Brazilian agriculture co-operatives often take on a larger role, explains Bertolini.
“There are many cooperatives especially in the South of Brazil that play the role of the state, providing agronomic and social assistance and even education,” he says.
Brazil also strives to ensure that a significant storage capacity is in the farms. This is to increase the rate at which harvesting can be completed by decreasing the time spent transporting and unloading grain. Increased capacity in farms also denies middlemen an opportunity to exploit farmers.
“Currently 16% of our storage capacity is in farms representing about 170 million tonnes. The United States of America is at 60% and that is our target.”
To undertake this venture, a 12-year plan has been mooted to build more silos in farms. The idea is to have over 50% storage capacity in farms.
The good climate in Brazil allows farmers to grow more than 3 crops per year in a single farm a phenomenon that Bertolini says has worked to the advantage of farmers and the country at large in the quest for food security.
A top corn producer
Although known as a global leader in soybean production, Brazil is also the second-largest corn exporter behind the United States. The main destination of Corn exports from Brazil are: Iran, Japan, Vietnam, Egypt, and South Korea.
Plentiful, and generally cheap, corn supplies especially in Brazil’s Center-West region have attracted investment in the corn ethanol sector over the last few years. The Brazilian Corn Ethanol Union (UNEM) estimates that the sector will produce about 2.5 billion litres of corn-based ethanol in market year 2020/21.
There are currently 16 corn ethanol plants in Brazil, located in the Center-West states of Mato Grosso, Goias, and Mato Grosso do Sul. At least four units are corn-only plants, while the rest are flex plants that produce ethanol form both sugarcane and corn. Industry sources report at least seven other corn-based ethanol plants in the planning, development, or construction stage, which could come on line in the coming years. If all the ongoing projects are built as planned, Brazil’s corn ethanol production could top 5.5 billion liters per year, consuming more than 13 million metric tons of corn annually.
“Brazil now stands as one of the world’s largest producers and consumers of ethanol,second only to the United States in terms of production, and third (behind the United States and Germany) in terms of consumption,” shares Bertolini.
Brazilian ethanol is also made from sugarcane. the country has roughly 350 sugarcane ethanol plants, largely concentrated along the coast. In 2019, the country produced 37.38 billion liters of ethanol, 96 percent of which came from sugarcane. However, in recent years, a small-but-growing fraction of Brazilian ethanol has been produced from corn, and the burgeoning industry is set to expand rapidly over the next decade.
Corn Ethanol production is now projected to expand to 8 billion liters by 2028, according to the National Union of Corn Ethanol Producers. At the same time, Brazilian consumption of ethanol is forecast to grow to 43 billion liters by 2029, according to the Minister of Mines and Energy/Energy Research Enterprise (MME/EPE), supported by the country’s new carbon credits program, RenovaBio.
This expected increase in demand is fuelling investment to expand Brazilian production of ethanol from corn, a crop for which the country now harvests more than 100 million metric tonnes annually.
And as Bertolini puts it the overall plan is to increase grain production with farmers taking centre stage.
“We continue to work with farmers to increase production capacity not only to support local consumption but also to satisfy export demand. We also continue to increase our capacity for rapid movement of grain especially when humanitarian crisis come calling. The sky is the limit for us and there is always room for improvement.”