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Brazil Becomes the New Food Superpower
Monday, 30 June 2008
U.S. News & World Report
By Thomas Omestad
Original Publish Date: June 25, 2008
Lucas do Rio Verde, Brazil — Out here on this seemingly endless tropical savanna, it looks like more bumper crops are rising out of the ruddy earth. Verdant rows of corn and cotton stretch out toward the horizon—this just months after a record harvest of soybeans was cut from the same tracts.
Given the abundance here in the fields, it's hard to believe that these plains were once dismissed as sterile wastelands best left to the emus, armadillos, monkeys, anacondas, and the odd jaguar. The acidic soil was thought to rule out significant farming.
The Brazilians still call these lightly wooded plains the cerrado—or "closed" or "inaccessible" land. But nowadays the cerrado is very much open for business, its fertility a springboard from which the world's newest superpower in agriculture is emerging. "We have been able to transform wasteland into a bountiful land that is helping to feed Brazil and the world," says Silvio Crestana, head of the Brazilian government's agricultural research company, EMBRAPA.
With millions of people literally hungering for affordable food, Brazil's breakthroughs in tropical agriculture may prove to be the key to feeding a growing global population. If Saudi Arabia fills the world's gas stations, China assembles its consumer goods, and India vies to staff its office services, then it is Brazil that is stepping forward to stock its pantries. The rise of Brazil as an agricultural powerhouse may be the most important story of globalization that many Americans have never heard of.
With ample sun and fresh water and more available arable land than any other country, Brazil seems to be on a historic trajectory to becoming the next great global breadbasket. "Brazil can be No. 1 in the future in agricultural production," asserts André Nassar, a leading agricultural economist based in São Paulo. "I think we will exceed the U.S."
If that ambition pans out, Brazil may provide the supply cushion the world urgently needs to meet growing demands for food. China, India, Russia, and other countries are eating higher on the food chain; they want more of the grains and meat Brazil can provide. The same soaring commodity prices that have inflicted so much global pain are creating wealth in Brazil's fast-growing hinterlands. "The crisis is not bad for Brazil. It allows farmers to get a better price," says Derli Dossa, a strategic adviser in the Ministry of Agriculture.
Brazil has already achieved some eye-popping gains. It is now the top world exporter of beef, poultry, soybeans, sugar, coffee, and orange juice. It is rising in other categories. Soy yields this year here in the central-western state of Mato Grosso are the best ever, reaching levels seen in Iowa and Minnesota. And Brazil looks to widen its lead as the top global exporter of ethanol as a result of its low-cost processing of sugar cane.
The American farm sector has watched Brazil's climb with a mix of fear, fascination, and allure. A few years ago, an Iowa Farm Bureau Federation PowerPoint presentation asked, "Should Brazil Give You Heartburn?" The attitude now seems to have grown calmer. "The heart of the Midwest will compete very well with Brazil," argues Dave Miller, research director at the Iowa Farm Bureau. In southern Minnesota, soybean farmer Gary Joachim says the high commodity prices mean "good times for everybody."
American agribusiness has long seen Brazil as a source of profit and opportunity. Moline, Ill.-based equipment giant John Deere has 114 dealers and 140 stores in Brazil, with expansion to 200 stores planned by 2010, by one dealer's count. A state-of-the-art tractor factory opened last year in southern Brazil. At the airy John Deere store in the booming town of Sorriso, salesmen can move all of the big 310-horsepower tractors that Deere can provide. For Minneapolis-based Cargill, which entered Brazil in 1965, the country accounts for 25,000 employees—its largest contingent outside the United States—and about $7 billion of its $100 billion in sales last year.
Land galore. Yet it's only when the amount of available land is considered that Brazil's history-making potential becomes clear. Brazil could, in principle, triple its area under cultivation over time—without felling any more rain forest. The additional terrain for Brazilian crops could surpass all of the land now under cultivation in the European Union.
All that would matter little, though, had Brazilian scientists not figured out how to modify soil and seeds to prosper on the humid, sun-baked cerrado. The Brazilians at EMBRAPA—many trained in part at American agronomy schools—discovered that heavy applications of lime and phosphate-rich fertilizers could reformulate the cerrado's acidic soils. "Brazil had been un-important in the export of food to the world market," says Norman Borlaug, the Nobel Peace Prize winner honored as the author of the 1960s-era "Green Revolution," which tamed hunger in places like India and Mexico. "It was followed up with a lot of good policy"—a combination, he says, that "changed Brazil's whole potential." Borlaug rates the cerrado's development as "one of the great achievements of agricultural science in the 20th century."
What is unfolding on the plains at the center of South America probably qualifies as the most important transformation of land since the breaking of sod in the Midwest during America's westward expansion. With comparatively little unused, arable land left in the world's temperate zones, including in the United States, no other country on Earth has Brazil's surge capacity in food production. "The real story of Brazil is how much more they can grow," says Clifford Sobel, the U.S. ambassador in Brasília.
Here, the guiding instinct is to achieve economies of scale. While Midwestern spreads commonly span 1,500 to 2,000 acres, modern farms in west-central Brazil typically run more than 20,000 acres. GPS-guided autosteering tractors roll precisely through the fields for miles without need of a turn. Life gets easy for the harvester's driver: Turn on the autopilot, set an alarm clock, and take a nap. Even ag veterans get excited at the scale. "I was amazed at the vastness of these operations," marvels Mark Keenum, a U.S. under secretary of agriculture who toured Brazilian farms in May.
One hour northwest of Lucas do Rio Verde, they are thinking big at the 24,000-acre Mano Julio Farm. The soy has been harvested, and the follow-on crops of corn and cotton are maturing nicely. The farm employs more than 200 workers who live in dormitories there or in Lucas. A basic farmhand makes about $530 a month, plus housing, food, and transport. The farm is raising 6,000 head of cattle, but the bigger plan is to launch a sow-nursery operation later this summer that should produce 225,000 piglets a year.
The general manager, Ismael Gross, has an M.B.A. in agribusiness and accounting from the University of Nebraska-Lincoln. Key to the farm's prospects, he says, is being agile. "We move very fast," Gross says. "We cannot expect anything from the government." In fact, local producers banded together, with help from the state government, to pave part of an access road. They also help fund an ag research agency in Lucas that studies local crop conditions.
Brazil has plenty of smaller family farms—more than 4 million in all—that mostly serve the internal market. But the dynamism powering Brazil into the front rank of food producers comes from the big-scale operations. Mechanized and chemical-intensive, this is a far cry from the often romanticized vision of farming portrayed—mostly by nonfarmers—in Europe and parts of the United States. "This is factory farming," allows Kory Melby, a Minnesota farmer who moved to Brazil and consults on Mato Grosso agriculture.
This is also the tropics, with stifling heat and humidity untouched by a freeze. That means an array of pests such as the perennial enemy of soy—Asian rust—needs to be attacked with insecticides, herbicides, and fungicides. The weather, however, conveys an undeniable advantage over the American Midwest, where one crop a year is harvested. Here, two crops are routine, and three are attainable with irrigation.
The soil is light on organic material compared with the classic black dirt of the upper Midwest. "The more you farm this soil, the better it gets," says Melby. "For soybeans, it's the Garden of Eden—with fungicide applied." The farmers are eager consumers of new techniques. "We will apply technology in whatever form it comes," says Otaviano Pivetta, one of Brazil's largest growers. "With the world growing in population, there is no other option."
Boom towns. Along Brazil's farm belts, ag towns are getting bigger—and wealthier. In the northeastern state of Bahia, the town of Luís Eduardo Magalhães is growing at a faster clip than any other in Brazil. Set on a high plateau, LEM, as it is known, has grown from a ramshackle settlement to 18,000 people in 2000 to 50,000 now. The city expects to reach 100,000 in as few as five years. Blocks of yet-empty dirt streets are laid out; sewer lines are being dug. "Twenty years ago, this was forest," says the mayor, Oziel Oliveira.
Though a drive through the town's crime-ridden slum serves as a reminder of the dark side of LEM's pioneer days, new prosperity is also on display at the gated Cotton and Soy Residences, where a four-hole golf club, tennis courts, pool, and a clubhouse entertain well-to-do farmers and the profes-sionals who have followed them. The airport houses several single- and twin-engine airplanes belonging to area farmers.
Not far away is the world's largest outdoor cotton storage facility, where blue, orange, and green tarps cover the fiber before shipment. Elsewhere, more than 100 double-trailer trucks—dubbed "Romeo and Juliets"— wait at a soybean- crushing plant of U.S.-based Bunge. But it is a drive along LEM's main road that showcases the breadth of the new ag economy: grain elevators, tractor dealers, truck and tire repair shops, chemical and cement stores, a fertilizer factory, irrigation sellers, welders and well drillers, freight companies and law offices, gas stations and a coffee warehouse, a cotton gin and a fiber-testing lab, cafes and a farmers' meeting hall. They are serving, says Brian Willott, a Missourian who farms south of LEM, "one of the honey spots of world agriculture."
Back in Lucas, as well, the frontier phase has yielded to rapid-fire town building. A grid of still-unpaved streets awaits the more than doubling of Lucas's population expected in the next three years. Two-room starter houses are under construction. "Everybody's coming here because there are jobs," says Carlos Caneiro, a minimart owner who read about Lucas on the Web.
On Lucas's western outskirts, an agro-industrial complex of uncommon scale is taking shape. A crushing plant will process soybeans from the surrounding countryside. Much of the resulting soy oil will be piped to a biodiesel plant in the complex. A large share of the remaining solids—the soy meal—will be transferred a few hundred yards to what will be the world's largest inland feed mill. That feed will provide chow for the area's soaring populations of hogs and poultry. For many, their days on Earth will end at two new slaughterhouses, which will be able to process half a million chickens and 5,000 pigs daily.
Now home to 31,000 people, Lucas is just 17 years old. Many of the area's producers came from southern Brazil, the children of Italian and German immigrants. They came west for profit and to "look for adventure," as Marino Franz, Lucas's mayor and co-owner of Mano Julio Farm, puts it. The adventure phase, he reports, "is done." That seems evident at a Sunday afternoon church fundraiser, where hundreds of pounds of churrasco grass-fed beef are being fire-roasted and a band is pounding out turbocharged Brazilian polka to a family crowd. Throttle back on the music and re-label the bottles of beer, and you might think yourself in a farming burg in the American Midwest.
Still, for all the dynamism here, Brazil's prospects for helping to feed the world are not unclouded. There is a reluctance in Brazil to talk about feeding the world. And though ag was consciously developed as the country's export star, elsewhere—in mostly urban Brazil—the attitude toward the farming juggernaut is mostly indifferent. Many would prefer to think of Brazil in terms of high tech and manufacturing. "Until recently, we have not been proud of it," explains Cristiano Romero, a Brasília-based columnist for the newspaper Valor Economico.
The producers themselves worry about fluctuating commodity prices, and soaring fertilizer and fuel prices are eating into profits needed to retire debts. Cheap credit can be hard to come by. Sporadic labor troubles and squatters, fights over land titles festering in court, and reports of official corruption all may hinder the coming Brazilian surge in food production. Farmers' subsidies and trade barriers in the United States and Europe also pose obstacles. Price supports and other assistance to American and European farmers foster overproduction there—and less here, say Brazilian officials and producers. They argue that when most ag subsidies were stripped away here, the farmers became more robust competitors.
Woeful infrastructure is a major problem, too. "We have the best weather in the world but the worst logistics," complains Clovis Picolo Filho, a grower and chemical dealer in Sorriso, north of Lucas. His farm is about 90 miles away, the last half off the asphalt. Getting grain and meat out of the Lucas area is a trial. Railroads in Mato Grosso are scarce, as are ports for barges. The seaports of Paranagua and Santos are some 1,200 bruising miles away—three days' drive. It is akin to trucking farm output from Des Moines all the way to New Orleans. The cost of shipping soy from Mato Grosso to the red-hot China market is 21/2 times higher than what it is for Midwestern soy.
Though it already constitutes a strategic corridor for soy, corn, and cotton, the highway through the Mato Grosso farm belt is an object of scorn. A trip up the ostensibly paved BR 163 from the state capital, Cuiabá, provides hours of informal spine-adjustment therapy. Some call it the "Highway of Death." Slow and treacherous, the journey means constantly encountering menacing trucks hauling crops and supplies as they dodge potholes. Dense patches of truck and tire-repair shops attest to the dysfunctionality of the road. The failure is widely recognized, yet unremedied. "There's a bankruptcy in infrastructure," acknowledges Sérgio Guerra, a senator from the state of Pernambuco. Of current building plans, he says, "Nothing's really happened."
Imperiled rain forest. Brazil's food future will also be shaped by the collision of interests over the Amazon rain forest. There is considerable dispute over where the agricultural frontier should end and the rain forest begin. With high prices for beef and grain, speculators continue to find parts of the Amazon an attractive target. Environmentalists say the expansion of soy production is pushing cattle operations toward and into the Amazon. In four decades, forest equaling all of Texas has been lost, mostly to cattle ranching. After three years of environmental progress, the rate of deforestation re-ignited last year, Brazilian satellite analysis suggests. And the drier "burning season" is looming just ahead. "Local people used to say malarial mosquitoes and bad soil would keep agribusiness out," says Paulo Adario, the Amazon campaign director for the environmental group Greenpeace. "Not now."
The satellite findings are disputed by Mato Grosso's governor, Blairo Maggi, a top grower and landowner himself who has been dubbed the "King of Soy." But the warning of intensifying deforestation triggered an unprecedented government crackdown this year on illegal logging, with heavy fines and federal police prowling through remote areas. Separately, a temporary moratorium agreed to by multinational companies and ngos like Greenpeace bars buying soy from recently cleared Amazon land. Participants judge it a success, so far.
But the police presence and fines, coupled with the scrutiny of ngos and news media, are sowing antipathy along the agricultural frontier. As you travel north on the BR 163, the level of tension and suspicion rises. "Going forward, our hands are tied," predicts Nelson Glucksberg, a farmer from Sinop in northern Mato Grosso. Maggi is not as pessimistic. But he acknowledges that "we know that we cannot open new areas because of the environmental restrictions." Farther up the road, in the forest town of Alta Floresta, rancher Leocir Jose Dellani recalls that the government once beckoned pioneers to settle the region. He vents his frustration in a restaurant crowded with federal police on the ecology beat. Ranchers, he says, are smarting over "being treated like criminals."
The backlash played a role in the recent resignation of Brazil's environment minister, Marina Silva, an ardent activist once allied with the slain Amazon icon Chico Mendes. Her hard line on deforestation had put Brazil's president, Luiz Inácio Lula da Silva, on the hot seat. Some environmentalists believe that da Silva is now siding with ag interests.
But others are thinking about how to accommodate rising demand for Brazilian farmland without knocking down more Amazon. Daniel Nepstad, a leading ecologist at the Woods Hole Research Center in Massachusetts, says the "escape valve" for the Amazon lies in channeling Brazil's farm expansion onto existing pastureland, which itself can be downsized by more efficiently raising cattle. Brazilian farmers and officials say the same: Brazil can rise to the challenge of provisioning the world without presiding over the Amazon's destruction.
In the meantime, the next breakthroughs in tropical agriculture are gestating. EMBRAPA is getting an infusion of money and scientists. It has opened an office in Africa, a hunger-ridden continent where some of Brazil's advances could translate well. By 2010, EMBRAPA will be the largest agricultural research agency in the world. It is working on disease-resistant corn, cotton, and soy and on sugar cane that would require less fertilizer. It is developing a "light" pig—more meat and less fat. And Brazil's scientists are experimenting with tropical wheat. Should that venture succeed, expect a shock to the central nervous system of the American breadbasket. "We had the Green Revolution. Now we can have the tropical revolution," enthuses EMBRAPA's Crestana.
We can help feed the world, the Brazilians are saying. It is an ambition that few would want to deny
Monday, 30 June 2008
U.S. News & World Report
By Thomas Omestad
Original Publish Date: June 25, 2008
Lucas do Rio Verde, Brazil — Out here on this seemingly endless tropical savanna, it looks like more bumper crops are rising out of the ruddy earth. Verdant rows of corn and cotton stretch out toward the horizon—this just months after a record harvest of soybeans was cut from the same tracts.
Given the abundance here in the fields, it's hard to believe that these plains were once dismissed as sterile wastelands best left to the emus, armadillos, monkeys, anacondas, and the odd jaguar. The acidic soil was thought to rule out significant farming.
The Brazilians still call these lightly wooded plains the cerrado—or "closed" or "inaccessible" land. But nowadays the cerrado is very much open for business, its fertility a springboard from which the world's newest superpower in agriculture is emerging. "We have been able to transform wasteland into a bountiful land that is helping to feed Brazil and the world," says Silvio Crestana, head of the Brazilian government's agricultural research company, EMBRAPA.
With millions of people literally hungering for affordable food, Brazil's breakthroughs in tropical agriculture may prove to be the key to feeding a growing global population. If Saudi Arabia fills the world's gas stations, China assembles its consumer goods, and India vies to staff its office services, then it is Brazil that is stepping forward to stock its pantries. The rise of Brazil as an agricultural powerhouse may be the most important story of globalization that many Americans have never heard of.
With ample sun and fresh water and more available arable land than any other country, Brazil seems to be on a historic trajectory to becoming the next great global breadbasket. "Brazil can be No. 1 in the future in agricultural production," asserts André Nassar, a leading agricultural economist based in São Paulo. "I think we will exceed the U.S."
If that ambition pans out, Brazil may provide the supply cushion the world urgently needs to meet growing demands for food. China, India, Russia, and other countries are eating higher on the food chain; they want more of the grains and meat Brazil can provide. The same soaring commodity prices that have inflicted so much global pain are creating wealth in Brazil's fast-growing hinterlands. "The crisis is not bad for Brazil. It allows farmers to get a better price," says Derli Dossa, a strategic adviser in the Ministry of Agriculture.
Brazil has already achieved some eye-popping gains. It is now the top world exporter of beef, poultry, soybeans, sugar, coffee, and orange juice. It is rising in other categories. Soy yields this year here in the central-western state of Mato Grosso are the best ever, reaching levels seen in Iowa and Minnesota. And Brazil looks to widen its lead as the top global exporter of ethanol as a result of its low-cost processing of sugar cane.
The American farm sector has watched Brazil's climb with a mix of fear, fascination, and allure. A few years ago, an Iowa Farm Bureau Federation PowerPoint presentation asked, "Should Brazil Give You Heartburn?" The attitude now seems to have grown calmer. "The heart of the Midwest will compete very well with Brazil," argues Dave Miller, research director at the Iowa Farm Bureau. In southern Minnesota, soybean farmer Gary Joachim says the high commodity prices mean "good times for everybody."
American agribusiness has long seen Brazil as a source of profit and opportunity. Moline, Ill.-based equipment giant John Deere has 114 dealers and 140 stores in Brazil, with expansion to 200 stores planned by 2010, by one dealer's count. A state-of-the-art tractor factory opened last year in southern Brazil. At the airy John Deere store in the booming town of Sorriso, salesmen can move all of the big 310-horsepower tractors that Deere can provide. For Minneapolis-based Cargill, which entered Brazil in 1965, the country accounts for 25,000 employees—its largest contingent outside the United States—and about $7 billion of its $100 billion in sales last year.
Land galore. Yet it's only when the amount of available land is considered that Brazil's history-making potential becomes clear. Brazil could, in principle, triple its area under cultivation over time—without felling any more rain forest. The additional terrain for Brazilian crops could surpass all of the land now under cultivation in the European Union.
All that would matter little, though, had Brazilian scientists not figured out how to modify soil and seeds to prosper on the humid, sun-baked cerrado. The Brazilians at EMBRAPA—many trained in part at American agronomy schools—discovered that heavy applications of lime and phosphate-rich fertilizers could reformulate the cerrado's acidic soils. "Brazil had been un-important in the export of food to the world market," says Norman Borlaug, the Nobel Peace Prize winner honored as the author of the 1960s-era "Green Revolution," which tamed hunger in places like India and Mexico. "It was followed up with a lot of good policy"—a combination, he says, that "changed Brazil's whole potential." Borlaug rates the cerrado's development as "one of the great achievements of agricultural science in the 20th century."
What is unfolding on the plains at the center of South America probably qualifies as the most important transformation of land since the breaking of sod in the Midwest during America's westward expansion. With comparatively little unused, arable land left in the world's temperate zones, including in the United States, no other country on Earth has Brazil's surge capacity in food production. "The real story of Brazil is how much more they can grow," says Clifford Sobel, the U.S. ambassador in Brasília.
Here, the guiding instinct is to achieve economies of scale. While Midwestern spreads commonly span 1,500 to 2,000 acres, modern farms in west-central Brazil typically run more than 20,000 acres. GPS-guided autosteering tractors roll precisely through the fields for miles without need of a turn. Life gets easy for the harvester's driver: Turn on the autopilot, set an alarm clock, and take a nap. Even ag veterans get excited at the scale. "I was amazed at the vastness of these operations," marvels Mark Keenum, a U.S. under secretary of agriculture who toured Brazilian farms in May.
One hour northwest of Lucas do Rio Verde, they are thinking big at the 24,000-acre Mano Julio Farm. The soy has been harvested, and the follow-on crops of corn and cotton are maturing nicely. The farm employs more than 200 workers who live in dormitories there or in Lucas. A basic farmhand makes about $530 a month, plus housing, food, and transport. The farm is raising 6,000 head of cattle, but the bigger plan is to launch a sow-nursery operation later this summer that should produce 225,000 piglets a year.
The general manager, Ismael Gross, has an M.B.A. in agribusiness and accounting from the University of Nebraska-Lincoln. Key to the farm's prospects, he says, is being agile. "We move very fast," Gross says. "We cannot expect anything from the government." In fact, local producers banded together, with help from the state government, to pave part of an access road. They also help fund an ag research agency in Lucas that studies local crop conditions.
Brazil has plenty of smaller family farms—more than 4 million in all—that mostly serve the internal market. But the dynamism powering Brazil into the front rank of food producers comes from the big-scale operations. Mechanized and chemical-intensive, this is a far cry from the often romanticized vision of farming portrayed—mostly by nonfarmers—in Europe and parts of the United States. "This is factory farming," allows Kory Melby, a Minnesota farmer who moved to Brazil and consults on Mato Grosso agriculture.
This is also the tropics, with stifling heat and humidity untouched by a freeze. That means an array of pests such as the perennial enemy of soy—Asian rust—needs to be attacked with insecticides, herbicides, and fungicides. The weather, however, conveys an undeniable advantage over the American Midwest, where one crop a year is harvested. Here, two crops are routine, and three are attainable with irrigation.
The soil is light on organic material compared with the classic black dirt of the upper Midwest. "The more you farm this soil, the better it gets," says Melby. "For soybeans, it's the Garden of Eden—with fungicide applied." The farmers are eager consumers of new techniques. "We will apply technology in whatever form it comes," says Otaviano Pivetta, one of Brazil's largest growers. "With the world growing in population, there is no other option."
Boom towns. Along Brazil's farm belts, ag towns are getting bigger—and wealthier. In the northeastern state of Bahia, the town of Luís Eduardo Magalhães is growing at a faster clip than any other in Brazil. Set on a high plateau, LEM, as it is known, has grown from a ramshackle settlement to 18,000 people in 2000 to 50,000 now. The city expects to reach 100,000 in as few as five years. Blocks of yet-empty dirt streets are laid out; sewer lines are being dug. "Twenty years ago, this was forest," says the mayor, Oziel Oliveira.
Though a drive through the town's crime-ridden slum serves as a reminder of the dark side of LEM's pioneer days, new prosperity is also on display at the gated Cotton and Soy Residences, where a four-hole golf club, tennis courts, pool, and a clubhouse entertain well-to-do farmers and the profes-sionals who have followed them. The airport houses several single- and twin-engine airplanes belonging to area farmers.
Not far away is the world's largest outdoor cotton storage facility, where blue, orange, and green tarps cover the fiber before shipment. Elsewhere, more than 100 double-trailer trucks—dubbed "Romeo and Juliets"— wait at a soybean- crushing plant of U.S.-based Bunge. But it is a drive along LEM's main road that showcases the breadth of the new ag economy: grain elevators, tractor dealers, truck and tire repair shops, chemical and cement stores, a fertilizer factory, irrigation sellers, welders and well drillers, freight companies and law offices, gas stations and a coffee warehouse, a cotton gin and a fiber-testing lab, cafes and a farmers' meeting hall. They are serving, says Brian Willott, a Missourian who farms south of LEM, "one of the honey spots of world agriculture."
Back in Lucas, as well, the frontier phase has yielded to rapid-fire town building. A grid of still-unpaved streets awaits the more than doubling of Lucas's population expected in the next three years. Two-room starter houses are under construction. "Everybody's coming here because there are jobs," says Carlos Caneiro, a minimart owner who read about Lucas on the Web.
On Lucas's western outskirts, an agro-industrial complex of uncommon scale is taking shape. A crushing plant will process soybeans from the surrounding countryside. Much of the resulting soy oil will be piped to a biodiesel plant in the complex. A large share of the remaining solids—the soy meal—will be transferred a few hundred yards to what will be the world's largest inland feed mill. That feed will provide chow for the area's soaring populations of hogs and poultry. For many, their days on Earth will end at two new slaughterhouses, which will be able to process half a million chickens and 5,000 pigs daily.
Now home to 31,000 people, Lucas is just 17 years old. Many of the area's producers came from southern Brazil, the children of Italian and German immigrants. They came west for profit and to "look for adventure," as Marino Franz, Lucas's mayor and co-owner of Mano Julio Farm, puts it. The adventure phase, he reports, "is done." That seems evident at a Sunday afternoon church fundraiser, where hundreds of pounds of churrasco grass-fed beef are being fire-roasted and a band is pounding out turbocharged Brazilian polka to a family crowd. Throttle back on the music and re-label the bottles of beer, and you might think yourself in a farming burg in the American Midwest.
Still, for all the dynamism here, Brazil's prospects for helping to feed the world are not unclouded. There is a reluctance in Brazil to talk about feeding the world. And though ag was consciously developed as the country's export star, elsewhere—in mostly urban Brazil—the attitude toward the farming juggernaut is mostly indifferent. Many would prefer to think of Brazil in terms of high tech and manufacturing. "Until recently, we have not been proud of it," explains Cristiano Romero, a Brasília-based columnist for the newspaper Valor Economico.
The producers themselves worry about fluctuating commodity prices, and soaring fertilizer and fuel prices are eating into profits needed to retire debts. Cheap credit can be hard to come by. Sporadic labor troubles and squatters, fights over land titles festering in court, and reports of official corruption all may hinder the coming Brazilian surge in food production. Farmers' subsidies and trade barriers in the United States and Europe also pose obstacles. Price supports and other assistance to American and European farmers foster overproduction there—and less here, say Brazilian officials and producers. They argue that when most ag subsidies were stripped away here, the farmers became more robust competitors.
Woeful infrastructure is a major problem, too. "We have the best weather in the world but the worst logistics," complains Clovis Picolo Filho, a grower and chemical dealer in Sorriso, north of Lucas. His farm is about 90 miles away, the last half off the asphalt. Getting grain and meat out of the Lucas area is a trial. Railroads in Mato Grosso are scarce, as are ports for barges. The seaports of Paranagua and Santos are some 1,200 bruising miles away—three days' drive. It is akin to trucking farm output from Des Moines all the way to New Orleans. The cost of shipping soy from Mato Grosso to the red-hot China market is 21/2 times higher than what it is for Midwestern soy.
Though it already constitutes a strategic corridor for soy, corn, and cotton, the highway through the Mato Grosso farm belt is an object of scorn. A trip up the ostensibly paved BR 163 from the state capital, Cuiabá, provides hours of informal spine-adjustment therapy. Some call it the "Highway of Death." Slow and treacherous, the journey means constantly encountering menacing trucks hauling crops and supplies as they dodge potholes. Dense patches of truck and tire-repair shops attest to the dysfunctionality of the road. The failure is widely recognized, yet unremedied. "There's a bankruptcy in infrastructure," acknowledges Sérgio Guerra, a senator from the state of Pernambuco. Of current building plans, he says, "Nothing's really happened."
Imperiled rain forest. Brazil's food future will also be shaped by the collision of interests over the Amazon rain forest. There is considerable dispute over where the agricultural frontier should end and the rain forest begin. With high prices for beef and grain, speculators continue to find parts of the Amazon an attractive target. Environmentalists say the expansion of soy production is pushing cattle operations toward and into the Amazon. In four decades, forest equaling all of Texas has been lost, mostly to cattle ranching. After three years of environmental progress, the rate of deforestation re-ignited last year, Brazilian satellite analysis suggests. And the drier "burning season" is looming just ahead. "Local people used to say malarial mosquitoes and bad soil would keep agribusiness out," says Paulo Adario, the Amazon campaign director for the environmental group Greenpeace. "Not now."
The satellite findings are disputed by Mato Grosso's governor, Blairo Maggi, a top grower and landowner himself who has been dubbed the "King of Soy." But the warning of intensifying deforestation triggered an unprecedented government crackdown this year on illegal logging, with heavy fines and federal police prowling through remote areas. Separately, a temporary moratorium agreed to by multinational companies and ngos like Greenpeace bars buying soy from recently cleared Amazon land. Participants judge it a success, so far.
But the police presence and fines, coupled with the scrutiny of ngos and news media, are sowing antipathy along the agricultural frontier. As you travel north on the BR 163, the level of tension and suspicion rises. "Going forward, our hands are tied," predicts Nelson Glucksberg, a farmer from Sinop in northern Mato Grosso. Maggi is not as pessimistic. But he acknowledges that "we know that we cannot open new areas because of the environmental restrictions." Farther up the road, in the forest town of Alta Floresta, rancher Leocir Jose Dellani recalls that the government once beckoned pioneers to settle the region. He vents his frustration in a restaurant crowded with federal police on the ecology beat. Ranchers, he says, are smarting over "being treated like criminals."
The backlash played a role in the recent resignation of Brazil's environment minister, Marina Silva, an ardent activist once allied with the slain Amazon icon Chico Mendes. Her hard line on deforestation had put Brazil's president, Luiz Inácio Lula da Silva, on the hot seat. Some environmentalists believe that da Silva is now siding with ag interests.
But others are thinking about how to accommodate rising demand for Brazilian farmland without knocking down more Amazon. Daniel Nepstad, a leading ecologist at the Woods Hole Research Center in Massachusetts, says the "escape valve" for the Amazon lies in channeling Brazil's farm expansion onto existing pastureland, which itself can be downsized by more efficiently raising cattle. Brazilian farmers and officials say the same: Brazil can rise to the challenge of provisioning the world without presiding over the Amazon's destruction.
In the meantime, the next breakthroughs in tropical agriculture are gestating. EMBRAPA is getting an infusion of money and scientists. It has opened an office in Africa, a hunger-ridden continent where some of Brazil's advances could translate well. By 2010, EMBRAPA will be the largest agricultural research agency in the world. It is working on disease-resistant corn, cotton, and soy and on sugar cane that would require less fertilizer. It is developing a "light" pig—more meat and less fat. And Brazil's scientists are experimenting with tropical wheat. Should that venture succeed, expect a shock to the central nervous system of the American breadbasket. "We had the Green Revolution. Now we can have the tropical revolution," enthuses EMBRAPA's Crestana.
We can help feed the world, the Brazilians are saying. It is an ambition that few would want to deny
