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BUSINESS GUARDIAN www.guardian.co.tt MAY 2013 • WEEK TWO
SALTO, Brazil - Brazil, an up-and-coming
agricultural superpower with abundant fertile
land, is struggling to provide consistently
affordable food for its population.
To understand how, consider the tomato.
Prices of the red fruit shot up 122 per cent
in March from a year earlier, putting it on the
cover of two national magazines, spurring
reports of tomato trafficking from Argentina
and igniting national outrage over how any
produce could possibly cost more in the tropics
than in, say, frigid Alaska.
Brazil s output of export commodity crops
like soybeans, corn, sugar and coffee is growing
faster than anywhere in the world, and no one
is warning of an imminent food shortage in
a country so rich in natural resources.
But Latin America s largest economy is
increasingly becoming a tale of two contrasting
agriculture policies. Export crops are a model
of technological prowess and high yields while
the farms responsible for feeding a growing
consumer class have remained much the same
for decades: mostly small and family-run.
Weighed down by debt, vulnerable to weather damage
and squeezed out of their lands by the commodity crops,
these farms are the first link in a long chain of inef-
ficiencies that made food prices soar in a country still
scarred by its long history of runaway inflation - com-
plicating President Dilma Rousseff s efforts to rekindle
"Brazil is only concerned about the agriculture that
affects our trade balance," said Cyro Cury, who grows
ten kinds of tomatoes on a farm an hour outside Sao
Paulo, South America s biggest city.
"There is no strategy, no regional statistics. We don t
deserve to be called the world s bread basket, we don t
have the right policies for that," he said while examining
freshly harvested tomatoes from the dozen greenhouses
Some of the problems facing the small farms clustered
around Brazil s largest cities, such as scarce labour and
poor transport lines, are also felt by manufacturers and
entrepreneurs. They make up part of the so-called Brazil
cost that has choked economic growth and made doing
business here so expensive.
Brazil s government largely blames the recent rise in
tomato, onion and carrot prices - which helped drive
inflation above the upper end of the central bank s target
range in March for the first time in a year and a half
- on seasonal factors it can t control.
"There were climate problems in some regions," sec-
retary of agriculture policy Neri Geller said, suggesting
prices would soon fall. "We have well-defined policies
for these products through credit lines and intervention
through minimum prices."
There is a growing consensus among farmers and
economists, however, that deeper structural issues, not
just irregular rains, leave Brazil vulnerable to oscillating
food prices at a time when few comparable countries
are worried about inflation.
As in many developing countries, food still accounts
for a large chunk of Brazil s consumer price index - 22
per cent - and fresh fruits and vegetables are widely
consumed by all classes.
Lack of labour
Chief among the factors spurring high food prices is
a lack of farm workers in a country now enjoying almost
full employment. After years of strong growth, services
companies have lured unskilled workers away from farms
by offering them better perks and a lighter workload,
often inside air-conditioned shops rather than under
the blazing sun.
"Today, the scarcest type of workers in Brazil are the
unskilled workers. Farm workers live just outside the
big cities and have other opportunities," said Mauro
Lopes, an agronomist at the Getulio Vargas Foundation
think tank in Rio de Janeiro.
Unlike the large soy and sugar plantations that are
largely mechanized, well-capitalised and often run by
foreign firms, some 60 per cent of Brazil s vegetable
farms are still family run and rely on manual labour.
Cury, the tomato farmer, said the scarcity of tomatoes
and record prices this season are mainly due to an out-
break of a deadly fungus, fewer seeds planted as farmers
emerge from debt, and the increasing difficulty finding
He says he would have liked to plant tomatoes in
eight more greenhouses this season to help meet surging
demand in Sao Paulo. But he couldn t find the additional
workers for a salary of about 1,000 reais (US$500) a
Brazil is now the world s top producer of sugar, citrus
and coffee, the leading exporter of poultry and beef and
on the verge of becoming the top soybean grower. But
land for non-export crops is increasingly scarce.
Data from statistics agency IBGE shows that the area
planted with rice and beans, staples of the national diet,
has fallen about 30 per cent since 1990, when the pop-
ulation was 25 per cent smaller.
In Sao Paulo state, an economic powerhouse that is
home to 40 million people, cane fields and orange groves
dominate the landscape.
"There is a clear divide in Brazilian agriculture," said
João Pedro Stedile, leader of Brazil s landless peasants
movement, known as MST. "There are 16 million workers
in family farms; they have only 15 per cent of the land,
but grow 80 per cent of what s consumed domestically."
Brazil's food inflation: don't
blame it all on the weather
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