Poor transport infrastructure hampers Brazil’s booming farms

José Nardes stands in a field of 20-day-old soya on his farm near Primaveira do Leste in the central Brazilian state of Mato Grosso.

As far as the distant horizons, over gently undulating countryside, the young plants are interspersed with stretches of cerrado, the scrubby woodland that once covered the entire region. Today, farmers must preserve what remains, often as protection for the rivers that cross the plateau, heading north to the Amazon basin, and are one reason for its fertility.

“This is the marvel of Mato Grosso,” Mr Nardes says. “When foreigners come here they can’t believe how much we get out of the soil.”

As the global debate over food security intensifies, many around the world are eagerly following Brazil’s emergence as an agricultural superpower.

But in Brazil, analysts say output is reaching its limit and the investment needed for growth, especially in transport infrastructure, is falling short. “For the hurry that the world is in, we are taking too long,” says Andre Pessoa, an economist at Agroconsult, a farm consultancy.

In recent years Brazil has become the world’s biggest exporter of a basket of foods including beef, chicken, sugar and the “soya complex” of beans, meal and oil, and its fourth-biggest ex-porter of maize and pork.

It is also one of the few big producer nations with room for growth. There are 72m hectares under crops in Brazil and 172m ha under pasture. Another 96m ha of cultivatable land is available without touching environmentally sensitive areas.

But it is productivity that is growing the most, while the cultivated area has been stable since about 2004. In places like Primaveira do Leste, many farmers grow soya from spring to summer, then maize which they sow with grass, so that when it is harvested they can graze cattle before planting soya again, all in one year. Others rotate soya and maize with crops such as beans or cotton.

All this on land that, before farmers from Brazil’s south began arriving in the 1970s and 80s, was regarded as infertile. By adding calcium and other nutrients, and taking advantage of its topography, sun, rain and rivers for irrigation, they have made it the most productive region of Brazil.

Some producers in Primaveira do Leste, however, are envious of their less productive competitors in the US.

“When I visit the US, I come back appalled by the obstacles we face,” says Paulo Aguiar, a farmer and director of the state cotton producers’ association.

High taxes anda mass of red tape are the least of it. A lack of rail and water transport means almost all production travels up to 2,000km on poorly maintained roads to port at a cost of about $100 a tonne, compared with about $30 in the US.

Some rail and waterway projects are under construction. But many people are tired of waiting. Paving a road north to Santarem on the Amazon, Mr Pessoa at Agroconsult points out, has been a government “priority” for 20 years.

Mr Pessoa also doubts where Brazil could put another 96m hectares under crops, though he does believe that, over time, it could expand its productive area by about half.

“The trouble is that we and other countries have created obstacles to this happening quickly,” he says.

As well as the slow pace of infrastructure investment, he says Brazil has the world’s most restrictive environmental laws, which oblige farmers to preserve forest with no compensation. It also faces trade barriers, and the steady strengthening of its currency, especially against the US dollar, is eroding competitiveness.

Meanwhile Primaveira do Leste is doing its best to keep growing. The town is attracting businesses to add value to farm produce.

Big local and international traders, like ADM, Bunge, Cargill and Louis Dreyfus, have been present purely as traders for years. But in May Cargill began refining soya oil in Primaveira.

Towns like Primaveira do Leste enjoy among the highest standards of living in Brazil. As productivity and profitability increase, they face a prosperous future. Whether they will be able to feed the world is less certain.