The new Minister of Agriculture, the farmer Carlos Fávaro (PSD-=MT), will not govern alone. The portfolio has become a string of dependencies, and the task will have to be shared with other ministers, whose decisions will have great weight for the sector.
The Ministry of Finance will be fundamental in defining an agricultural policy for Agriculture. The Budget’s blanket is short, and Agriculture, if it wants to encourage lower-income producers, will have to increase the participation of these farmers in financing.
The big producers, after good years of income, still have strength. In this harvest, those from Mato Grosso, the main agricultural state in the country, financed 33% of their harvest with their own resources. In 2020/21, the percentage was 17%, and in 2021/22, 23%.
High interest rates and signs of a slowdown in international prices are new obstacles for Brazilian agriculture, after strong demand and prices in recent years. Requests for agricultural paste for the Farm will increase. Incidentally, the name Farm goes well with Agriculture.
Brazilian agriculture will also depend a lot on the Ministry of the Environment. The actions of this should open or close doors for the Brazilian market. One cannot imagine, however, that the incoming government will behave as destructively in this sector as the outgoing one did.
The producers themselves have already become aware that crimes exist in this area and that they must be fought. Otherwise, foreign markets will increasingly close.
The Ministry of Agriculture will also depend a lot on the Ministry of Foreign Affairs. As much as former minister Tereza Cristina has sought external dialogue, international aversion to President Jair Bolsonaro is great, and some bridges have been destroyed.
Even the action of the Ministry of Mines and Energy, through the National Mining Agency, will be important for external recognition of Agriculture. The advance of illegal prospecting and mining, mainly in indigenous lands, influences negotiations with the foreign market.
Adequate and sustainable mining projects, including fertilizer production, will be important for agriculture.
Brazil will now have to live with new threats of trade barriers. The European Union is about to implement a new import protocol, which takes into account the period and deforested areas.
The European bloc wants more efficient and more ecological production. Brazil will have to adapt to these requirements, due to the importance of Europe for the Brazilian market, but at what cost? Most of the new markets require competitive food prices.
External demand for Brazilian products also depends on the world economy and the income of consumers, especially those in Asia, Brazil’s largest market.
The international crisis, lower activity in Europe, the effects of Covid in China and possible European barriers, due to deforestation, may reduce the external prices of commodities. And this occurs in a period of strong acceleration of production costs.
There is also indecision about the development of the conflict between Russia and Ukraine. Important suppliers of grains and inputs, these two countries interfere in the supply of the world market.
In addition to these concerns, weather conditions are also challenging factors. In recent years, climate adversities have affected many parts of the world, including Brazil.
In the year 2021, the country lost 20 million tons of corn due to drought and frost. This year, it was the turn of the same volume of soybeans. For these cases, the country needs an efficient insurance and income guarantee program in the countryside.
Technology is fundamental to agriculture. Although the new government has expressed the need for a budgetary recovery by Embrapa to advance new agricultural research, the company is at rock bottom.
Technology has led Brazilian competitors to increase production and reduce external dependence, even in less favorable conditions than those of Brazil.
The Russians, the main importers of pork from Brazil a few years ago, are no longer an important part of this list.
The Arabs are increasing protein production, which is also happening in the Chinese market. African countries, with the help of foreign capital, are increasingly involved in food production.
Brazil needs a medium and long-term program pointing out trends for agriculture. It must contemplate not only the internal needs, but also the possible directions of the external sector.
The production of basic foodstuffs, such as rice and beans, for example, is being neglected due to the attractiveness of products aimed at the foreign market.
The health surveillance sector of the next government will have to redouble its attention. Avian flu has reached some neighboring countries, while African swine fever is already threatening the American continent.
The new Minister of Agriculture will also have to adjust to the opposing forces of the MST and the mass without a defined leader who has taken over a good part of the countryside.
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