Agriculture Brazil

Brazil is characterized by large and well-developed agricultural, mining, manufacturing, and service sectors. Today it stands as the worlds sixth largest economy. Brazil is well known for its agricultural productivity. Brazil ranks third among the worlds major agricultural exporters and fourth for food products. Brazil is a major producer of a variety of agricultural commodities and is the worlds largest producer of coffee, sugarcane and oranges. It is also the worlds second largest producer of soybeans, cattle meat, poultry, tobacco leaves, bananas and brazil nuts; and the third largest producer of maize, pineapples, pepper and cashew nuts. Until the 1930s, the Brazilian economy relied on the production of primary products that were exported to the rest of the world Over the last 35 years, agriculture has perhaps been the most spectacular sector for the economy. Brazil has transformed itself from a food importer into the worlds largest net exporter. Apart from the historic crop of coffee, Brazil now grows corn, rice, wheat, sugarcane, oranges and, of course, soybean, not to mention its massive production of beef and poultry. Brazil holds the promise of becoming what Hank Pellissier terms the future farm of the planet. This assumes significance in the light of continuing human population growth.

Area under Agriculture

Brazil has a comparitive advantage in many forms of agricultural activity due to favourable natural resource conditions. The conditions dictate the feasible and the potential productivty of the land With agriculture becoming an important factor of development there have been many opening of new agricutural lands, making the comparitive advantage dynamic, than static, by increasing the stock of resources. Agricultural land refers (in below graph) to the share of land area that is arable, under permanent crops, and under permanent pastures.

percentage of land under agriculture

35 PERCENTAGE OF LAND AREA 30 25 20 15 10 5 0 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 YEAR

Agriculture in Brazillian economy

Agriculture plays the most important role in this economy and (half) the population depends for its livelihood on this sector. Even while manufacturing and services are showing a steep growth, agriculture is still a driving force of the Brazilian economy contributing 5.8 percent to the country's GDP. In 2009, agriculture accounted for 19.3 percent of the labor force (19 million people). On an International level, with 25 percent of global investment, the country is the principal recipient and source of foreign direct investment in Latin America and fifth recipient nation in the world. The agribusiness share reaches 23 percent and the agribusiness employment accounted for 2.7 percent of the labor force.

Agricultural products @ Brazil

Cattle
Brazil stands among the largest countries producing meat. This is also an important export good of the brazillian economy. Exported Meat products have made 10.6 billion (US Dollars). These cattle, also a source of leather is a product of revenue. In 2003, Brazil exported over 1.4 million tonnes of beef, exports which earned the country around $1.5 billion. Also that year, total exports of the leather complex passed the $1 billion mark.

Coffee
Brazil stands as the largest producer of coffee, a position the country has held for the last 150 years, producing more than 1/3rds of the world's total coffee. Coffee based products exported revenue in about 4.1 billion (US Dollars). Brazil mostly produces Arabica and Robusta (lower grade type) types of coffees. In 2007, 80% of the total 2.25 million tonnes produced was Arabica coffee. Coffee plantations covers about 27,000 sq.km of the country. There are approximately six billion trees under cultivation. This high productivity can be attributed to suitable landscapes, climate and rich soil. Most plantations are harvested in the dry seasons of June through September, and thus the economies of scale for coffee cultivation are good here. Brazil has a large population involved in the crop. About 3.5 million people are involved in the industry, mostly in rural areas, and it generates seven million indirect and direct jobs. Brazil is the only high-volume producer of the crop that has been subjected to frost. Heavy frosts ruined large harvests in 1975 and 1994. The two 1994 frosts, as well as water shortages in 2001, raised worldwide prices.

Most of the coffee in Brazil is grown to be "commercial" grade coffee that goes into those little metal cans, and into instant (soluble coffee in the trade), and into other uses that are similar, were the peak flavor is not a concern, but rather bulk and price are the prime considerations

SoyBeans
This is one of the country's fastest growing exports of Brazil. It has shown tremendous increase in its productivity from 1.5 million tonnes, in 1970, to 24.07 million tonnes in 1990.

Wheat
Brazil's tropical climate is not very suitable for growing wheat. Therefore despite this internal production, Brazil has to import around US$700 million in wheat every year.

SugarCane
Brazil is the leading producer of Sugarcane and most of its sub-products. Even during the colonial periods, the economy heavily depended on sugarcane for its well-being. The cane is also used in the production of ethanol and ethanol based products for which, also brazil has a mark. As of all, exports based on such sugar and ethanol based products bring home 7.8 billion (US Dollars). Apart from these, the Brazil agricultural tree is to cutivate other crops such as rice, corn, etc. The exports also incude forestry products which give 6 billion (US Dollars).

Cattle & SugarCane

500 450 400 350 300 250 200 150 100 50 0 1960 1980 1990 2000 2004 2005 60 50 40 30 20 10 0 1960

Other Crops

Million Metric Tonnes

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Million heads of cattle Million metric tons of sugarcane

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Corn Rice Soybeans Wheat

Economy @ Agriculture
Overall, agricultural exports have contributed to Brazils favorable trade balance of $79.1 billion so far for 2012.

Yield
Brazilian farmers enjoy a comparative advantage in many agricultural segments, particularly the grain, fruit, fiber, and animal protein sectors. This advantage is due to a temperate climate with plenty of light, the worlds largest surface and ground fresh water reserves, excellent quality and diversity of soils and diverse agro-ecological systems. The yield per hectare has been always high. With the application of various methods, chemicals and Agricultural machinery, the yield has surged up through the years. Brazil is the first tropical country to join the big farm-exporting ranks. It has invested heavily in agricultural research. Embrapa, the Brazilian Agricultural Research Corporation, has done a marvelous job and its scientists are world leaders in many fields. New varieties of soybeans, historically a temperate

Yield per hectare

YIELD OF GRAINS(IN KGS) PER HECTARE 4500 4000 3500 3000 2500 2000 1500 1000 500 0

YEAR

crop, have been created that can grow in Brazils savannah.

Employment in Agriculture

Agricultural is an important sector of the brazillian economy, providing jobs for 15.7% of the population. Historically, from 2001 until 2013, Brazil Employed Persons averaged 20.35 Million Persons reaching an all time high of 23.46 Million Persons in November of 2012 and a record low of 14.36 Million Persons in February of 2002.The Employment in agriculture (% of total employment) in Brazil was 17 in

Employement in Agriculture
PERCENTAGE OF LABOUR IN AGRICULTURE 35 30 25 20 15 10 5 0

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Axis Title

2009, according to a World Bank report, published in 2010.

Change in inventories
Changes in inventories are a leading indicator for the overall performance of the economy. A unexpected decrease in the inventories (stock) is at the same time an indication that 1) Consumers have increased demand towards the product. 2) The firm or organization is unable (consciously or not) to invest enough for a constant inventory. Example: During some seasons the demand for coffee increases. As a result everyone buys more than usual, and therefore the inventories of the firms will decrease, either if they havent planned this situation or if they could not meet the demands even if they were to know about the change. This is one of the crisis brazillian coffee has been facing at many intervals. This sometimes also leads to price increase for which The Brazilian Coffee Institute intervenes to control the price of coffee by regulating the amount grown and sold on the world market.

Agricultural Equipment and Services Overview

2009

Moreover, since farms are generally large, the sector is ideally suited to incorporate a wide range of American agricultural machinery and technology. Brazil has thirteen industrial production units owned by seven large agricultural equipment manufacturers. Most of the international agricultural equipment producers manufacture locally and export from Brazil to other South American countries. Total installed production capacity in Brazil is 106,000 machines per year. Agricultural machinery (in the graph) refers to the number of wheel and crawler tractors (excluding garden tractors) in use in agriculture at the end of the calendar year specified or during the first quarter of the following year.

MACHINERY IN AGRICULTURE PER AREA

160 MACHINERY USED IN AGRICULTURE 140 120 100 80 60 40 20 0 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009

YEAR

Marginal Productivity of Labour

With the increase in technology and the introduction of heavy machinery's usage in agriculture, has increased the productivity tremendously. Therefore the productivity of an individual with these capital has more than quadrupled. The values in the below graph are based on constant US Dollars (2000).

Marginal Productivity of labour in Agriculture

AGRICULTURAL VALUE ADDED IN US DOLLARS
4500 4000 3500 3000 2500 2000 1500 1000 500 0

Axis Title

It should be remembered that the Brazilian miracle is first and foremost the result of a dynamic and comprehensive policy to support agriculture, from upstream to downstream. Based on the above numbers and points it can be suggested that Brazil will continue to grow through expansion of the agricultural sector, driven by global demand.

References and data sources

http://api.worldbank.org/datafiles/ Wikipedia