Wednesday, January 19, 2011

Farm of the Future

Last year, The Economist ran an article on Brazil's "Agricultural Miracle". Hank Pellisier ran a digest of this article and a few others and condensed it in "Brazil: Future Farm of the Planet?".

It's well worth a read. Just to show you some of the potential in this country, here are some facts Hank dug up about Brazil's agricultural ranking:

Chickens: 1st in the world, 41% of export market share
Coffee: 1st in the world, 27% of export market
Orange juice: 1st in the world, 82% of export market
Soybeans: 1st in the world, 38% of export market
Beef: 1st in the world, 26% of export market
Sugar: 1st in the world, 39% of export market
Ethanol: 1st in the world, 52% of export market
Tobacco: 2nd in the world, 17% of export market
Bananas: 2nd in the world, behind India
Pork: 3rd in the world, 15% of export market
Corn: 3rd in the world (behind USA and Argentina)
Black pepper: 3rd in the world (behind Vietnam and Indonesia)
Cotton: 5th in the world (USA is the leader)


  1. Thanks for alerting us to the post at the blog of Hank Pellisier. Here is the response that I have posted:

    Dear Hank,

    Sorry to have to rain on your parade but you are simply way off the mark.

    You say, "I should have mentioned is that Brazil has not yet experienced "global warming" and when it does, I've read that that will impact its agriculture."

    Have you not been following the news? Rio Janeiro state just experienced one of the worst flooding disasters in the history of Brazil. And the 2010 Amazonian drought was even worse than the "once-in-a-hundred-year" drought of 2005. The warming of the sea surface temperatures of the tropical North Atlantic contributes more moisture into the air which changes both the air current patterns and rainfall. The old "normal" climate patterns in Brazil are vanishing to be replaced by both more flooding in the south and longer more intense droughts across the interior.

    Indeed, this will have a HUGE impact not only for agricultural production but also for anticipated hydro-electric energy production from Amazonia where whole rivers have been drying up. This is probably one of the reasons that the development bank of Brazil -- BNDES -- has stated that it will not release a $640 million loan to start work on the Belo Monte dam until the full 40 environmental licensing requirements are met.

    Bankers are not treehuggers. But they know how to assess risks. They understand that mega infrastructure development across Amazonia will very likely accelerate deforestation and consequently drought and energy production unless the strictest environmental safeguards can be met.

    This is NOT about foreigners telling Brazil what to do. It is about Brazil achieving security in its own commodity and energy development model. The significance of the Amazon forest is only partially about "oxygenation." More significantly, it is about maintaining seasonal water cycles in Brazil and a livable climate in the world.

    Here are some of my blog posts about water, energy and development in Brazil.

    Hank, I urge you to avoid lulling your readers into a false confidence. As was the case in earlier times with sugar, coffee and rubber, Brazil maybe entering a bubble in which they can get seriously blindsided. Climate change is the unacknowledged elephant in the room.


  2. Dear Lou,

    thanks for your insightful comment to this short blogpost.

    Just a few comments from my side: It is not sure yet if the rainfalls and mudslides are of centenary proportions, as horrible they may have been. Many climatologists also comment on a unique La Nina pattern, which may have affected the weather more than in the past.

    The deaths caused by mudslides are mostly related to irregular building than weather - thus a more socio-political and climatological problem.

    Belo Monte is a unique problem in itself. The environmental licensing has not been complete, the cost are most likely to exceed the budget, possibly due to unprecise tendering documentation and the energy it may provide may be much less than assumed, as assumptions are... well... assumptions, and probably in this case assumptions made by experts who WANTED the damn.

    When it comes to drought, do note that the Brazilians have become experts at extracting every last growth potential of the cerrado and have developed a eucaliptos tree that will grow in the fairly barren wastelands of Maranhao/Piaui - so drought may be a challenge that may be met.

    Nevertheless, insightful post and climate is sure to accompany the Agricultural Miracle for a few decades and may be the tipping point of success or failure of this business model.

    Cheers, -n

  3. Neven,

    Let me try to help with some facts...

    Yes, the scientists can't yet say whether the recent extreme events are La Nina or climate change. What they know 2005 was not an centenary event (that's why I put it in quotes). The climate model suggests that 2005 was an approximately 1 in 20 year event, but will become a 1 in 2 year occurrence by 2025, and a 9 in 10 year occurrence by 2060. The new concern is that 2 of the 2005-like events have appeared in only 6 years.

    The big problem is there is no certainty until the pattern is established and then it's too late. The paleo-climatologists tell us that much of the Amazon was once cerrado. It can easily happen again.

    The key for agriculture is the length of the dry season. Trees transpire during dry times building the westward-traveling moisture in the atmosphere. It stacks up at the Andes and then rebounds to start the wet season. As trees disappear in the great arc of deforestation this process takes longer to rebound, hence a longer dry season.

    If you look at total rainfall, Brasilia in the center of the cerrado has more than Sao Paulo and Rio de Janeiro, yet the native vegetation in Brasilia is savanna (cerrado) while that of SP and RJ is Atlantic Coastal Forest. Why? It involves the length of the dry season. Trees need water the year round, if it dries out too long, only a few trees with deep roots will be able to survive - cerrado. This becomes a positive feedback loop with fire, selective longing, roads all leading toward more deforestation. And then the entire seasonal pattern upon which agriculture depends is upended.

    By the way, it's important to note that the native cerrado is not a biological wasteland. Indeed, it is the most diverse grassland in the world and sequesters as much carbon as does the Amazon forest, at least until it is plowed up for agriculture.

    With regard to Belo Monte, the government effort to go ahead based on a partial license (which caused the resignation of the head of IBAMA) was an attempt to repeat the "short circuit" that was used to begin work on the Maderia River project in Rondonia. But fortunately BNDES appears to be realizing that these licensing concerns have serious merit. In the face of climate change, the Xingu River complex is going to require more and more dams and this raises the cost making alternative energy forms more cost-effective.

    It's really time for Brazil to be thinking about scrapping these climate-vulnerable mega-dams in the Amazon Basin and start investing the vast financial boon of off-short oil in solar and wind energy production for a sustainable future.