19 November 2012

Brazil ascendant

Excerpts from an eye-opening article in the Washington Post:
Brazil is expected next year to dethrone the United States as the world’s largest producer of soybeans. With so much land available for cultivation, that status will probably become permanent...

As the result of a 2009 WTO ruling, Brazil now receives about $17 million in monthly payments from U.S. taxpayers — money being used to advance the Brazilian cotton industry with research on best practices, pest management and other issues...

State-backed research since the 1970s has turned the Cerrado — once considered unproductive scrubland — into a vast farm belt. Still mostly unplanted, and comfortably distant from Brazil’s environmentally sensitive Amazon region, the Cerrado has become a new frontier in the green revolution that made U.S. farmers the most productive in the world. Just as the vast plains of the American Midwest helped keep down world food prices for the last half of the 20th century, the Cerrado may do the same in the 21st... 

Of seven new factories that John Deere said it plans to build worldwide, two are in Brazil — with three in China and one each in India and Russia. “It is a tricky issue,” said a U.S. official who spoke on the condition of anonymity because he was not authorized to comment publicly. “U.S. companies are doing all this investment in an agriculture superpower that is a huge competitor...

Farmers here say the major constraint — a notoriously slow and expensive transportation network — can be fixed over time. Compared with this country’s unlocked potential... “the U.S. is at its limits.”  


  1. The bad thing is, the Cerrado biosystem is as rich in biodiversity as the Amazon, but nobody cares. The soybean is destroying it.

  2. Quick - short the soybean market

  3. ...and the "scrublands".

  4. That will certainly happen, Normal. Prices can't rise forever, and this is, of course, a bubble of transnational investment who will pop as soon as it is the most (in)convenient. It is, after all, production driven by advertise of unnecessary consumption, which is of course generating the epidemia of obesity.

    To the anonymous official, it may be relevant to remember Adam Smith: "I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it" - an idea that grasps beyond the jingoistic critique of the Soviet block.

  5. That article totally fails to mention any environmental implications this may have. It makes it seem like the Cerrado is this expanse of nothingness, while that is far from the case: http://www.mongabay.com/profiles/cerrado.html


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