Soybean King Wears Dual Crowns

Jul. 15–CUIABA, Brazil – Blairo Maggi could be called the soybean king if he didn’t already have another title: governor of Mato Grosso.

Maggi runs a 350,000-acre soybean domain one-third the size of Rhode Island, considered the world’s largest. He also leads a state that is the linchpin in Brazil’s drive to become the breadbasket of the world.

This melding of agribusiness with political influence has been central to the emergence of Brazil as an agricultural powerhouse. Over the last three decades, Brazil has become the world’s largest exporter of sugar, coffee, chicken, beef and tobacco. It’s poised to overtake the United States as the largest soybean exporter.

With 170 million head of cattle, the country has almost as many cows as people. Its citrus industry produces more than half of the world’s orange juice. Last year the country amassed the largest agricultural trade surplus in the world, some $34 billion.

The advent of Brazil as an agri-superpower challenges the supremacy of the United States in feeding the world and has led to numerous U.S.-Brazil tangles over trade. Florida citrus producers last year filed a “dumping” complaint in Washington, charging their Brazilian competitors are selling orange juice in the United States at below cost. Brazil successfully challenged U.S. subsidies to cotton producers at the World Trade Organization. U.S. sugar producers are keeping a wary eye on Brazil’s efforts to expand their markets around the world.

They’re facing a nation that not only boasts low production costs and vast reserves of relatively cheap land but also where farmer moguls like Maggi have attained widespread political power.

But Brazil’s ag prowess has come at a price. Deforestation to make way for crops and cattle has accelerated. More than 10,000 square miles of Amazon trees were felled in the past year, according to Brazilian government figures. Environmental groups have stepped up pressure on the government of President Luiz Inacio Lula da Silva, leading public campaigns and monitoring cutting.

Maggi and other large farmers in Mato Grosso, where savanna and rainforest are being replaced by soybeans, corn and cotton stretching as far as the eye can see, are at the center of this conflict.

About half the deforestation was in Mato Grosso, where the land dedicated to soybean production has expanded by 400 percent in the last 10 years, reported the Forests Working Group.

But Maggi, who has one year left in his four-year term as governor, said environmental concerns are exaggerated.

“Environmentalists get nervous about us using 40 percent of the land for agriculture and livestock. They never say we protect another 60 percent of the land,” Maggi, 47, said in a recent visit with reporters.

Only small parts of the rain forest can be legally cut down. But illegal logging and farming have taken a toll, environmentalists say. And a new highway leading north — national road 163 — filled with rigs hauling soybeans to Amazon loading docks, has heightened concerns because it offers new access into the forests.

“We can see a clear relationship between cutting the forest and the expansion of the soybean crop,” said Sergio Guimaraes, who heads the Center of Life Institute in Cuiaba. “As the soybean crops expand, we speed up the forest cutting; soybeans move into cattle areas and the cattle move into [former] forests.”

While Brazil is highly industrialized and urbanized — some 200 cities have populations of 100,000 people or more — agriculture production comprises almost one-third of the entire economy. Sixteen million people work the land, the majority on small and medium-sized farms.

PRODUCTION DOUBLE

Soybean production has doubled in a decade, and surging worldwide demand for soybeans as animal feed — especially from China — is expected to encourage even more growth. Brazil’s soybean production is now 65 million tons, compared to 85 million tons in the United States, the world’s largest producer.

Midwestern farmers have traveled to Mato Grosso to view the competition for themselves. “Brazil is really impacting us,” said Iowa grain farmer Dennis Keeney. On one recent trip Maggi, whose family holdings produce two million of the 15 million tons of soybeans grown in Mato Grosso, acted as tour guide.

Vast expanses of unsettled land still beckon.

“When people come to Mato Grosso, they seek the promised land,” said Adilton Sachetti, the mayor of Rondonopolis, a city of unpaved streets and pickup trucks that is riding a cotton boom.

Celso Griesang, whose 15,000-acre Fazenda Tropical, planted with soybeans and cotton, lies 50 miles from Rondonopolis, came to the promised land 25 years ago.

“My family bought a huge spread and no one else wanted to work here. There was nothing to do; there was no asphalt,” said Griesang, an agronomist.

Since Griesang arrived, land costs have spiraled from $11 an acre to more than $1,000. Now Griesang is thinking of diversifying: “It’s enough to farm what I farm. Maybe I would invest in something else.”

Despite Brazil’s success, some question if the country’s growing dependence on agriculture is a good idea.

“Nothing in agriculture is a given,” said Keeney, also senior fellow with the Institute for Agriculture and Trade Policy. “Markets, technology, diseases, consumer preferences, policies, trade agreements, all give a constantly shifting scenery.”

Just in the past 12 months, the price of soybeans has fallen 50 percent; cotton prices are down 35 percent. Drought in southern and central Brazil have cut into farm production.

Last month, 10,000 farmers from all over Brazil staged a protest in Brasilia demanding government help, warning the cost of growing soybeans was outstripping the sales price. The country has run up $7 billion in domestic farm debt.

Experts say the country is less vulnerable to boom-and-bust cycles today because it exports all over the world.

While booming farm exports provided desperately needed cash to Brazil after Lula da Silva took office two years ago, farmworker advocates say rising international sales do little to alleviate widespread poverty.

“The Brazilian government has always treated large-scale producers better,” contends Luiz Vicente Facco, a leader of the National Confederation of Farmworkers. “The small producers are at the margin; the beneficiaries are those who are already exporting.”

“The agricultural sector has become very powerful,” said Sao Paulo economist Paulo Nogueira Batista. “But Brazil is basically an urban society. There is no way you can build your country on agriculture.”

Still, regional leaders like Maggi have real clout.

“That’s the kind of governor they elect; they represent rapid development and anti-environmentalism,” said Timothy Power, a Florida International University political science professor who specializes in Brazil.

Recently, Maggi, who is likely to remain the soybean king even when he steps down as governor, added another title. After an online vote, the environmental group Greenpeace crowned Maggi the “king of deforestation.”

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