How Brazil Became the Largest Agricultural Exporter in the World

Brazil is a country of contrasts, with diverse landscapes, cultures and economic sectors. But one thing that stands out is its agricultural prowess. Brazil is the largest agricultural exporter in the world, surpassing the United States, China and the European Union. How did Brazil achieve this feat? What are the main factors behind its success? And what are the challenges and opportunities for the future? This article will explore these questions and more.

How did Brazil achieve this feat?

Brazil’s agricultural history dates back to the colonial period, when sugar, coffee and cotton were the main crops grown for export. These commodities were produced by slave labor on large plantations, known as latifundios. The latifundios dominated the rural landscape until the mid-20th century, when a series of reforms and policies aimed to modernize and diversify the agricultural sector.

Creation of Embrapa

One of these policies was the creation of Embrapa, the Brazilian Agricultural Research Corporation, in 1973. Embrapa is a public institution that conducts research and innovation in various fields of agriculture, such as crop improvement, soil management, pest control, biotechnology and agroforestry. Embrapa has been instrumental in developing new varieties of crops that are adapted to the different climatic and soil conditions of Brazil, such as soybeans, corn, cotton, rice and fruits. Embrapa has also helped to transfer knowledge and technology to farmers, especially smallholders, through extension services and training programs.

Expansion of the agricultural frontier

Another key factor behind Brazil’s agricultural boom was the expansion of the agricultural frontier, especially in the Cerrado region. The Cerrado is a vast savanna that covers about 20% of Brazil’s territory. It was once considered unsuitable for agriculture due to its acidic and nutrient-poor soils. However, thanks to Embrapa’s research and innovation, farmers were able to overcome these challenges by applying lime and fertilizer to correct the soil acidity and improve its fertility. They also adopted no-till farming techniques, which consist of planting crops directly on the soil surface without plowing or harrowing. This reduces soil erosion and water loss, while increasing organic matter and biodiversity.

The Cerrado became a major producer of soybeans, corn, cotton and other crops, attracting large-scale farmers and agribusinesses. The region also benefited from improved infrastructure and logistics, such as roads, railways, ports and storage facilities. These enabled farmers to transport their products to domestic and international markets more efficiently and cheaply.

Brazil’s agricultural sector is not only large but also diverse. It produces a wide range of products, from grains and oilseeds to fruits and vegetables, from meat and dairy to coffee and sugar. It also has a strong presence in the global market, exporting to more than 180 countries. According to the Ministry of Agriculture, Livestock and Food Supply (MAPA), Brazil’s agricultural exports reached $100.81 billion in 2020, accounting for 48% of the country’s total exports. The main destinations were China (35%), the European Union (16%) and the United States (7%). The main products exported were soybeans (35%), meat (15%), sugar (10%) and coffee (7%).

Challenges and opportunities

Brazil’s agricultural sector faces many challenges and opportunities for the future. Some of the challenges include:

Environmental sustainability

Brazil’s agricultural expansion has come at a high environmental cost, such as deforestation, biodiversity loss, water pollution and greenhouse gas emissions. Brazil needs to balance its agricultural production with its environmental conservation, by adopting more sustainable practices such as agroecology, organic farming, integrated crop-livestock-forest systems and low-carbon agriculture.

Social inclusion

Brazil’s agricultural sector is marked by inequality and social exclusion, with a concentration of land ownership and income in few hands. Brazil needs to promote more inclusive and equitable development, by supporting small-scale farmers, family agriculture, agrarian reform, land tenure security and rural education.

Food security

Brazil’s agricultural sector is vulnerable to external shocks such as climate change, price volatility, trade disputes and pandemics. Brazil needs to enhance its food security and sovereignty, by diversifying its production systems, strengthening its domestic markets, reducing its dependence on imports and exports, and increasing its resilience to shocks.

Brazil has become the largest agricultural exporter in the world thanks to its natural resources, human capital, technological innovation and market access. However, it still has a long way to go to achieve a more sustainable, inclusive and secure agriculture. By addressing these challenges and seizing these opportunities,
Brazil can continue to be a global leader in agriculture while also improving its social and environmental performance.

The World’s Largest Agricultural Exporter: The United States

The United States has been the world’s largest agricultural exporter for decades, thanks to its technological advances, diverse climate, and large land area. In 2020, the US exported agricultural products worth 147.9 billion U.S. dollars, more than any other country in the world . The US is the largest producer and exporter of corn, soybeans, and cotton, and also exports significant amounts of wheat, fruits, nuts, meat, and dairy products .

The Global Demand for Agricultural Products: Rising or Falling?

The global demand for agricultural products is influenced by many factors, such as population growth, income levels, dietary preferences, environmental conditions, trade policies, and market fluctuations. According to the Food and Agriculture Organization of the United Nations (FAO), the global demand for food is expected to increase by 50% by 2050, compared to 2012 levels . This implies a higher demand for agricultural products, especially in developing regions where population and income growth are faster.

However, the global demand for agricultural products is not uniform across different regions and commodities. Some regions may face a decline in demand due to changing consumer preferences, such as a shift away from animal-based products or cereals towards more fruits and vegetables or alternative proteins . Some commodities may face a decline in demand due to oversupply, price volatility, or environmental concerns, such as palm oil or sugar . Therefore, the global demand for agricultural products is likely to vary depending on the type, quality, and origin of the product.

The Future of Agricultural Trade: Opportunities and Challenges

The future of agricultural trade depends on how the world can meet the growing demand for food while ensuring food security, sustainability, and equity. There are several opportunities and challenges that may affect the future of agricultural trade, such as:

Technological innovations

New technologies such as biotechnology, precision agriculture, digital platforms, and blockchain can improve agricultural productivity, quality, traceability, and access to markets. However, they also pose challenges such as ethical issues, regulatory barriers, intellectual property rights, and digital divide .

Climate change

Climate change can have significant impacts on agricultural production and trade by affecting crop yields, pest and disease outbreaks, water availability, soil quality, and transportation infrastructure. Climate change can also create opportunities for adaptation and mitigation strategies such as climate-smart agriculture, carbon markets, and renewable energy .

Trade agreements

Trade agreements can facilitate agricultural trade by reducing tariffs, quotas, subsidies, and non-tariff barriers. Trade agreements can also promote cooperation on issues such as sanitary and phytosanitary measures, technical standards, environmental protection, and labor rights. However, trade agreements can also create conflicts of interest among different countries or groups of countries with different levels of development or competitiveness .

References:

https://data.worldbank.org/indicator/BX.GSR.GNFS.CD?most_recent_value_desc=true

https://www.moec.gov.ae/-/uae-ranks-11th-globally-in-commodity-exports-in-2022-with-a-41-per-cent-growth

https://www.statista.com/statistics/1332329/leading-countries-worldwide-by-value-of-agricultural-products-exported/
https://www.investopedia.com/financial-edge/0712/top-agricultural-producing-countries.aspx
http://www.fao.org/3/a-i6583e.pdf
https://www.weforum.org/agenda/2019/01/how-changing-consumer-behaviour-is-transforming-the-food-industry/
https://www.wri.org/blog/2019/12/6-pressures-threatening-global-food-supply
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https://www.ifpri.org/publication/agricultural-trade-future

https://www.embrapa.br/en