Commodities Shuttle: Arrogance makes Brazil suffer impositions against agricultural production

Brazil is risking a lot, just a little. The country, since it increased its participation in the world’s food supply, has been contested. Oftentimes due to failures in the means of production, but other times just for commercial reasons, as the country has increased pressure on competitors.

One of the main mistakes, however, was to always ignore the contestations, even when the country needed to correct eventual defects.

The arrogance and lack of dialogue with the “enemy” now make the country suffer impositions from outside. And the argument that they’re going to have to eat out of our hands no longer works.

Every production process has its flaws and irregularities. Brazil is not free from this, as are other countries. But it is necessary to recognize mistakes and avoid risks.

Recognition and the search for corrections would not have left the country as vulnerable and in the external sights as it is now. The whole country knows that there is illegal mining, including on indigenous lands, that there is illegal logging and that there is illegal occupation of land by agricultural activities.

This illegality is little compared to all activities in the countryside, but it must be recognized and fought. A weak and belligerent government made the problem even greater for the country.

What until then was just a fight against the illegal on the part of foreigners, has now turned into a battle against the legal as well, since all deforestation that drives agricultural activity should be considered illegal by the European Union, even contradicting the legislation of the Brazilian Forest Code.

This battle position promised by the Europeans affects precisely Brazil’s main sources of foreign income from agribusiness. Exports of the soy complex should add up to US$ 47 billion (R$ 260.7 billion) this year, and the European Union is responsible for 15% of that amount.

Foreign sales of coffee to the 27 countries in this group of countries reached US$ 2.6 billion (R$ 14.4 billion) last year, and meat sales, US$ 613 million (R$ 3.4 billion).

If, instead of just facing off, the country had sat down at the table and put its positive points and the intention to correct its mistakes, the scenario would not be what it is today.

The world trade relationship changed and other components entered this negotiation, mainly sustainability. It is a requirement of the consumer, which must be taken into account by the supplier.

If the European Union carries out these new requirements on imports, the producer will be the biggest loser. The process of selecting products in the risk area will require costs, which will be passed on to the production sector.

The irregularities of a few, to which many turn a blind eye, will be another cost factor for the agricultural sector.

The Brazilian producer may be threatened not only by the shackles that will be placed on exports, but also by difficulties in purchasing inputs.

This action by governments in the purchase of products from countries that violate sustainability rules may also turn pressure on companies located in their countries, hindering Brazilian imports of fertilizers, agrochemicals and foreign technologies, sectors on which the country is still very dependent.

Furthermore, foreign investments today require social, environmental and governance sustainability. With this deteriorated image that Brazil has, they will become more and more distant.

There is a lack of interlocutors in these discussions, which makes Brazil increasingly distant from negotiations with the foreign market.

Agribusiness, which should bring the country US$115 billion (R$637.8 billion) in revenues this year, has already reached close to US$1 trillion (R$5.5 trillion) in ten years. Without it, the country would be in a much more adverse economic situation than the current one.

Europe is not alone in this battle against Brazil. Other heavy importers are also going to start looking more at these internal Brazilian issues.

It is becoming difficult to control these so-called risk areas. Illicit activities generate more and more resources and take root in a way that will be difficult to combat in the future.