Productivity of Brazilian workers only grows in agriculture

On the one hand, agribusiness makes the trade balance break records. On the other hand, the industry loses more and more space in the economy and the service sector suffers from the sequence of crises. Along the way, the Brazilian worker feels how the loss of productivity affects wages and jobs.

In comparison with industry and the service sector, the only segment that showed robust growth in labor productivity in the last 26 years, from 1995 to 2021, was agriculture.

Between 1995 and 2021, the average growth in productivity per hour worked in this sector was 5.6% per year, according to a survey carried out by researchers from FGV Ibre (Brazilian Institute of Economics of Fundação Getulio Vargas).

In 2021, an agricultural employee was able to produce BRL 18.60 in an hour of work, compared to BRL 4.30 in 1995, compared to 2019 values. In the same period, industry productivity fell from BRL 38, 80 to R$36.60 (retroducing 0.2% per year).

In the case of the service sector, which employs more Brazilians and is responsible for around 70% of the hours worked, productivity also stagnated: from R$ 33.50 in 1995 to R$ 37 last year (increase of 0.4% per year).

The results reflect the worsening suffered by the Brazilian economy as a whole, a scenario in which agriculture and livestock is a point out of the curve, says the specialist in the job market and researcher at Ibre Fernando Veloso.

“The country has serious problems in the business environment, frequent regulatory changes and low quality of education. These are obstacles that have been around for a long time and have worsened with tax waivers and fiscal mismatch, which inhibits investments,” he says.

In two and a half decades, the highest growth in labor productivity in agriculture occurred in the period from 2007 to 2014, at 7.5% per year.

Veloso adds that it is not surprising that the productivity of industry and services is stagnant. The acceleration in the volume of tax waivers and exemptions from the industry and service sectors had little results in the preservation of jobs and reduced the productivity of these sectors, he assesses.

During the pandemic, after registering a growth of 6.1% in 2020, there was a 9.5% drop in productivity per hour worked in agriculture in 2021.

Veloso recalls that agriculture was less affected during the pandemic than other sectors, but was not completely immune to the health crisis. “The stagnation has been going on for a long time, with the low quality of investments affecting all sectors.”

It is also necessary to separate the informal segment of the labor market, with low productivity and dependent on social programs, from the more productive side of agribusiness —generally formed by producers integrated into international chains and who surfed the high prices of commodities.

With the loss of space in the industry and the successive crises of consumption, which weighed on the service sector, agribusiness has grown in importance in the national GDP (Gross Domestic Product).

In 2021, the sector reached a share of 27.4% in the Brazilian GDP, the highest since 2004, according to Cepea (Center for Advanced Studies in Applied Economics, Esalq/USP).

Activities linked to the countryside also first surpassed the pre-pandemic level of jobs, taking into account formal and informal vacancies. In the third quarter of 2021, the population employed in agriculture, livestock, forestry, fishing and aquaculture reached 9 million – the number represents an increase of 574 thousand jobs compared to the third quarter of 2019 (8.5 million), before the crisis. sanitary.

Even so, the remuneration of work in the field is still lower than in industry and services. According to Caged (General Registry of Employed and Unemployed), agriculture pays, on average, wages 15% lower than those of industry.

INVESTMENT IN RESEARCH INCREASED PRODUCTIVITY IN THE FIELD

Son of coffee growers and founder of agrotech (a startup focused on agribusiness) Agrosolutions, Eduardo Rezende, 36, from Minas Gerais, saw up close the increase in the use of productivity techniques in the field that helped improve worker performance.

“In rural activity, Brazil has gained a lot of productivity in recent years, largely as a result of soil correction. In some crops, productivity has doubled, and a year’s crop constantly exceeds that of the previous year. Initiatives such as the genetic improvement of plants, the densification of crops, preventive maintenance helped to transform everyday life on the farms”, he says.

“More than the increase in area, the agro universe has managed to increase its productivity in the last 30 or 40 years, with the incorporation of these new technologies that demand a more qualified workforce, given the pressure that Brazilian agribusiness faces to maintain competitive in the international market”, explains Felippe Serigati, professor and researcher at FGV Agro.

He also assesses that the field could have performed even better if the industry’s productivity had not stagnated.

“If the industry had managed to keep up with productivity, our exports would have benefited from products with higher added value. When we leave the gate, we are still faced with the high cost of producing Brazil.”

The researcher also recognizes that institutions such as Embrapa (Empresa Brasileira de Pesquisa Agropecuária), played an important role in this increase in field productivity, by coordinating research that helped to increase productivity and reduce costs. “Unfortunately, we haven’t seen this happening, generally speaking, in other industries.”

On the other hand, the low productivity of industry and services is worrisome, since the increase in productivity is crucial for raising the country’s standard of living, with the end of the demographic bonus — when there are, proportionally, a greater number of people of working age. fit to work. The economists’ accounts indicated that Brazil would reach the top of this level in 2020.

Economist Rafael Cagnin, from Iedi (Instituto de Estudos para o Desenvolvimento da Indústria), points out that the industry is a capital-intensive sector, and that Brazil has gone through a long adverse period for investment in recent years, harming the activities that more depend on contributions to develop.

“Very high interest rate levels, lack of long-term financing mechanisms, a loan compatible with profitability: all this weighs on the industry. The sector suffered from strong competition from foreign products, the depreciated exchange rate and the bad business in the country”, he says.

Cagnin adds that there is also a heterogeneous situation in the industry, with large companies that manage to position themselves competently in the international economy and have productivity levels comparable to those of developed countries, and companies with obsolete capital goods and organizational problems in their production lines. .

“We are behind in the insertion of the industry in the world. In the 1980s, Brazilian workers had 46.1% of the productivity of an American colleague; in 2021, this level was 25.5%, and this curve follows the deindustrialization from the country.”

“The problem of productivity in Brazil is associated with the State’s inability to expand investments in education and improve the quality of these expenditures”, says senior economist at CNC (National Confederation of Trade in Goods, Services and Tourism), Fabio bentes.

“It is not by chance that from 2014 onwards, with the successive deficits that the country faces and the low economic growth, we have difficulties in providing a more adequate structure and workforce for education.”

Given the current situation of fiscal crisis, the change in the level of worker productivity will be more up to the private sector, says the economist. “The individual effort for education is a third source, but the qualification of the worker will depend even more on the companies.”