AGRIBUSINESS EXPANSION INTO THE BRAZILIAN AMAZON Maria del Carmen Vera Diaz Daniel C. Nepstad Robert Kaufmann.

AGRIBUSINESS EXPANSION INTO THE BRAZILIAN AMAZON Maria del Carmen Vera Diaz Daniel C. Nepstad Robert Kaufmann Agribusiness is one of the main economic driving forces behind agricultural expansion in the brazilian Amazon. This process is fast and dynamic, ocurring Mato Grosso and going into Amazon region Discussions about economic, social and environmental impacts of the mechanized agriculture to the Amazon ecosystem. Soybean Boom Deforestation vs soybean crops (direct or indirect impact on deforestation?) What are the real benefits of soybean production to the Amazon? Who can win or lose with the Green Gold Restrictions to soybean expansion Transportation Infrastructure Storage Units Climatic conditions (precipitation, pests) Topography (flat areas) How is soybean expansion happening? Economic logistics of this expansion: Strategy of trading companies (tradings), producers and government Who is buying land in the Amazon to grow soybeans (migration of producers) Expansion places in Amazon Region (cerrado, transition forest, primary forest) Environmental and physical restrictions to grow soybean in Amazon (soil) Questions Evolution of soybean production in Brazil U$2,8 billions US$ 6 billions Soybean exportation growth from 2001 to 2002 = 15.6% Soybean is the main export produt of Brazil Agribusiness GDP to 2002 = R$424 billions Predicted Agribusiness GDP to 2003 = R$ 454 billions Growth = 7% Increase consumption in China (economic development) Good performance of international prices Devaluation of Brazilian Money (stimulate export) 30% soybean national production Municipal agricultural production (IBGE) FIELDWORK July/ Soybean counties Tradings Producers Politics Mato Grosso CARGILL BUNGE ADM AMAGGI Group 60% soybean trade in Brazil 6% of soybean trade Transnationals Brazilian trading Economic and political power together Tradings: Building storage units Building ports Roads (Consortia to pavement) Credit to producers Ports New storage units (north MT) Cargill in 23 places of Cuiaba-Stm road 1-Substitution of pastures by crop. 2-Areas of transition forest in MT. Tradings functioning as banks AMaggi: financing more 2000 producers Cargill: Credit transaction with the soybean producers 1 ton of fertilizer = 26 sacks of soybean (60 kg) Cuiaba-Santarem Road Madeira Santos Paranagu Accessing world soy markets Soybean Region Asia Land speculation Profit Soybean vs cattle ranching Soybean profit sacks/ha ($ ha) Cattle ranching profit 4-5 sacks/ha ($40-50 ha) Cattle ranchers renting pastures to soybean producers (6 sacks soy /ha) ENVIRONMENTAL AND PHYSICAL RESTRICTION Climate conditions (precipitation, temperature) Topography (flat areas) Infrastructure (roads, waterways, railroads) -Flat -Plateau Clay