Vaivém: PT started a boom in agribusiness, but still scares the sector with MST

Most rural producers have a great aversion to Luiz Inácio Lula da Silva. A good part of the current good development of agriculture, however, began with Lula and Roberto Rodrigues, the PT’s prime minister of Agriculture.

Incentives for research, biosecurity, crop and livestock integration, insurance and rural credit programs, renewable energy policy and reforms by Conab and Embrapa took place as of 2003.

The Ministry of Agriculture also created a secretariat specialized in international affairs and a program of agricultural attachés to act in defense of Brazilian agriculture in key countries in the commercial relationship.

The PT continues to scare producers, however, when it comes to MST, agrarian reform, export taxation and the right to property and its defense, including the possession of weapons. As one producer says, “these principles are religion.”

In the early 2000s, the country experienced great legal uncertainty regarding transgenic products. The seeds, especially soybeans, came irregularly from Argentina.

GMOs advanced in the country without regulation and safety precautions, while companies did not invest because they had no guarantee of a return on their investments.

The Biosafety Law, in 2005, guaranteed norms and controls for transgenics, as well as allowing investments in the sector.

Corn productivity rose 72% per hectare from 2004 to the volume that should be harvested in the 2022/23 harvest. Soybean increased 53%; and cotton, 37%.

The advance of agriculture was also due to investments in research. Embrapa even invested, based on corrected values, over R$ 1 billion per year in funding and research during the Lula government. This year, the proposal is R$ 171 million.

From past investments comes, for example, the jump in productivity and wheat production, which should reach close to 10 million tons this year.

During Rodrigues’ period in the ministry, reforms were carried out in rural insurance and credit, with the creation of several negotiable papers in the financial market to provide greater liquidity to the system.

Ivan Wedekin, Secretary of Agricultural Policy at the time, says that the biggest financial revolution in Brazilian agriculture to date has taken place.

The 2004 agribusiness bond law paved the way for financing the sector, he said. Last August, the volume of LCA (Agribusiness Letter of Credit), CDCA (Agribusiness Credit Rights Certificates) and CRA (Agribusiness Receivables Certificates) totaled R$ 420 billion, and CPR (Product Bill Rural), R$ 178 billion.

In 2006, with the mismatch between costs and product prices, which created a debt bubble in the countryside, the government restructured the sector’s debt. According to Neri Geller, former Minister of Agriculture in the PT government, the amount of money reached R$ 1 billion for the Midwest.

The field was hit by a severe drought, and the dollar had a sharp devaluation, making the Brazilian product, contrary to what is currently happening, not very competitive in the international market.

The government made a subsidy program for soy producers, supporting 21.7% of the oilseed production. Soy has not received support since 1987, according to the former Secretary of Agricultural Policy.

A secretariat for international affairs was created for the agricultural sector, which helped to open markets for Brazilian products. In 2004, the sector’s exports, considering only food, totaled US$ 28 billion. In 2021, they reached $100 billion.

Brazil has always had little representation in food-importing countries, unlike other exporters, such as the United States. Luis Carlos Guedes Pinto, who would replace Rodrigues in the ministry, created a program of agricultural attachés.

The project was implemented by Minister Reinhold Stephanes in 2008, sending attachés to China, the United States, Belgium, Russia, Argentina and other countries.

In 2005, biodiesel is incorporated into the energy matrix. In addition to less pollution, the program allowed an advance in the internal crushing of soybeans and a gain in production value.

The program should have a mixture percentage of 14% of biodiesel with diesel oil and reach 15% next year. If that happens, the internal crushing of soybeans could reach 30 million tons, just with the biodiesel program, according to former minister Francisco Turra. The current government has retroacted the mixture, which is at 10%.

In 2006, the crop and livestock integration program was created to make better use of deforested land areas, increase agricultural production and diversify producer income.

Data from the ILPF Network indicate that 17.4 million hectares are already included in this program, which also incorporates the integration of forests.

In 2010, the ABC (Low Carbon Agriculture) program was structured, which are policies to mitigate the emission of greenhouse gases.

Rodrigues has always had a focus on assisting the medium producer as well. In his assessment, the small has assistance from government programs; the big one has its own resources and greater ease with financial institutions. The medium is more unprotected. In 2010, Pronamp was created, which provides support to medium rural producers.

With the evolution of grain production, mainly in Mato Grosso, the PAC was launched in 2013, a program for the construction and expansion of warehouses with payment terms of up to 15 years.

For Geller, the PT government also sought specific funding sources for the sector through Inovagro, Moderagro, Moderfrota and for cooperatives, programs aimed at ensuring greater productivity.

Wedekin says that the structure that has been set up over the years for agriculture remains and, regardless of who takes over the government next year, everything will be as before. “The heart of agricultural policy will not change, mainly due to the current representational forces, which were not there 20 years ago.”

The fronts, from deputies to cooperatives and family farming, are currently well established, he says.