The sector emerges as a driver of economic development, being little affected by economic policy and strengthening itself in the international market
By Tatyane Mendes 10/23/2022 7:00 am
Brazilian agribusiness generated BRL 2.4 trillion in 2021
Agribusiness was responsible for 27.5% of the wealth generated by Brazil in 2021, according to the Brazilian Gross Domestic Product (GDP). The percentage represents about BRL 2.4 trillion and set a record level for the sector, which remained resilient even amid the restrictions and crises caused by Covid-19. The Center for Advanced Studies in Applied Economics (Cepea), from Esalq/USP, estimates that agribusiness will be responsible for 25.5% of GDP in 2022, slightly below the figure recorded in 2021, despite the rise in input costs. In addition, the institution points out that “the agribusiness GDP reached successive records in 2020 and in 2021, with this biennium being characterized as one of the best in the history of Brazilian agribusiness”. The production and quality achieved made the country consolidate its position among the main producing and exporting nations in the world market, according to data from the United States Department of Agriculture. Brazilian agribusiness managed to remain strong and grow despite international challenges, such as the swine fever crisis, the war between Ukraine and Russia and turmoil in the Brazilian economy. In recent years, the sector has emerged as a driver of economic development, being little affected by economic policy and strengthening itself in the international commodity market.
The sector was responsible for 48% of Brazilian exports, reaching US$ 80 billion in sales of agricultural products, and still employs 20% of the Brazilian workforce. A report from the Ministry of Agriculture, Livestock and Supply (Mapa) still predicts a growth trend with productivity gains in the sector for the next ten years. “The most dynamic products of Brazilian agribusiness should be cotton, soy and corn, pork, beef, chicken and fruits, especially mango. The domestic market and international demand will be the main growth factors for most of these products. They also indicate the greatest potential for growth in production over the next ten years. Grain production is expected to reach 333.1 million tons in the next decade. But we should reach 300 million tons in six years. Meat production between 2020/21 and 2030/31 is expected to increase by 6.6 million tonnes. It represents an increase of 24.1%. These percentages may be at higher levels, given the increase in demand for animal protein”, the document details. There is still an expectation of growth in the share of agribusiness in the Brazilian GDP of around 3% in 2022.
But what makes agribusiness stand out in the economy?
Scientific coordinator of the Center for Advanced Studies in Applied Economics (Cepea), Geraldo Barros explains that the good performance observed today in Brazilian agribusiness is the result of decades of investment in national science and technology. He recalls that Brazil started a green revolution during the 1950s, when input industries came to settle in the country, and agribusiness found government support to transform agriculture, as well as the industrial sector. “From that point on, we have a big difference because the manufacturing industry, in general, only transplanted factories to Brazil. With agribusiness there was more national development of technology. And the government strongly supported it until the end of the 80s, when the sector was already developed and in a dynamic of growth. During all this time, support for agricultural research has not wavered. When we reached the 1990s, Brazil was already well prepared and competitive to face globalization, which contributed to the growth of emerging economies. China boosted the rise in agricultural products from Brazil. Without this growth in consumption and exports, we would not be able to exploit the technologies available on the scales that we have reached. Our agribusiness today is modern, mature, on the frontier. The sector only faces problems when there are crises abroad, such as climate crises and wars”, he clarifies.
In a complementary way, the head of the Special Advisory for Economic Affairs of the Ministry of Economy, Rogério Boueri, points out that the strong international demand, production capacity, availability of productive space and the technology developed within the country are the main factors that give the agribusiness stability and high growth capacity. “Brazil is the biggest food supplier in the world.