Soy plantation.| Photo: Michel Willian / Gazeta do Povo / Archive
President Luiz Inácio Lula da Silva (PT) wants to accelerate the transfer of technologies developed by the Brazilian Agricultural Research Corporation (Embrapa) to maximize field production in Africa. The idea is to streamline projects along these lines that have been running in Brazil for two decades, since the PT’s first term, which began in 2003.
But there is a contentious question: will Brazil invest in training countries to become competitors of Brazil’s agribusiness? And will it do so when its main importer, China, indicates continued growing demand and tries to diversify its grain suppliers in the same African territory?
The question comes amid a series of crises that have pushed Lula out of the agribusiness sector. These include the distribution of strategic positions for the landless movement and the government’s lenient handling of invasions; Demarcation of tribal lands that threaten producers and pressure to withdraw stateowned companies’ support for the sector, as happened at Agrishow.
Lula explained in January that Brazil owes its culture to Africa and believes “that debt can be paid with science and technology.” The future president of Embrapa, Silvia Massruhá, will take on this task from May when she takes office.
The government has not yet defined which nations should be the target of their investments in Embrapa technology. However, the first attempts should go to Mozambique and Angola, where Lula is supposed to travel soon. Another potential destination is Ghana on the west coast of the continent.
Production in the African savannah has to compete headtohead with Brazil, analysts say
Embrapa turned 50 last week. The current president of the stateowned company, Celso Moretti, is leaving the company. He was appointed to the government of former President Jair Bolsonaro (PL) by the then Agriculture Minister Tereza Cristina at the end of 2019. The replacement takes place according to governance procedures created in adaptation to the dictates of state law.
Before this move, Minister of Agriculture Carlos Fávaro had already met Angola’s Minister of Foreign Affairs, Téte António, in Brasília on April 5 to discuss cooperation in favor of agricultural activity in the African country. Fávaro said that Embrapa’s contribution would come in the form of technology and advice on shaping public policies.
belongs to experts People’s Gazette judge that China’s strategy to reduce dependence on its largest soybean suppliers Brazil and the United States should indeed make the African savannah compete with the Brazilian cerrado. The Chinese effort comes against a general backdrop of the country trying to become selfsufficient in grain production. This is a strategy in preparation for an eventual armed conflict against the United States over the island of Taiwan.
However, analysts also believe that the same process creates opportunities for big Brazilian agribusinesses in the African country.
Lula bases his actions on ideological motives, but ideas can generate new business
Lula’s emphasis on recognizing Brazil’s “humanitarian obligation” to Africa is part of the PT’s diplomacy, which focuses on the progress of emerging economies. “But this speech by the President and the agricultural sector itself to fight hunger opens up pragmatic ways, on the other hand, to consider the interests of Brazilian companies settling in Africa. It is good to point out that technology transfer involves longterm contracts and commercial counterparts between the participating countries and the private sector,” stresses Gustavo Bernard, Senior Analyst at Dominium Consultoria.
With this in mind, the Department of Agriculture wants to review Embrapa’s operating model and redesign the National Agricultural Research System (SNPA), which consists of the stateowned enterprise, state research organizations, universities and institutes, with the aim of improving the links between the creation of national technology and theirs private employment.
As part of the Brazilian government’s More Food Program (PMAI), in his first term, Lula led an agricultural development project in Mozambique, funded by the governments of Brazil and Japan, as a showcase of Brazilian foreign policy in Africa. The cooperation program for the agricultural development of the savannah (prosavanas) was carried out on the basis of the successful BrazilianJapanese partnership from the 1970s on the development of the cerrados. With that, including the establishment of Embrapa, the country has developed over five decades from a food importer to one of the exponents of global agribusiness.
Through agreements implemented from 2009 to 2013, the Brazilian Cooperation Agency (ABC) also provided technical assistance to Benin, Burkina Faso, Mali and Chad to improve cotton production. Embrapa was designated as the supporting agency and the project involved agricultural research organizations from the beneficiary governments. In the chapter devoted to sugarcane ethanol, Lula defended Africa’s involvement in efforts to guarantee volumes for the biofuel market.
In 2010, at the end of his second term, Lula edited an interim measure that was approved unchanged the following year, the first by the government of former President Dilma Rousseff (PT) to allow the government to open Embrapa offices abroad. The aim was to give the stateowned company the flexibility to deliver technology to countries with which Brazil has agreements. An example of this was the memorandum signed with Ghana in 2006 to open a local Embrapa office in the African country, but failed to materialize due to legal restrictions.
Technology transfer poses risks to Brazil’s competitiveness, says Senator
The opening of corporate offices abroad was an important part of the foreign policy of the PT governments. Before the interim measure was approved, Embrapa set up virtual laboratories (Labex) focused on advanced research in Europe and the United States. At the same time, the stateowned company also maintained partnerships with African laboratories for technology transfer. At the time, Senator Edison Lobão Filho (MDBMA), then Senate rapporteur on the interim measure that became Law 12.383 in March 2011, warned of “risks associated with the transfer of fundamental knowledge to national competitiveness”.
These risks may result from the longterm shift in China’s soybean supply axis to Africa, which is currently concentrated in the United States and Brazil in similar amounts respectively. A warning sign of this was the soybean purchase agreement signed between China and Tanzania in October 2020. About 70% of the 130 million tons of soybean harvested annually in Brazil is exported to China, while Tanzania exports 6 million.
Although volumes show little change, this is progress in the Chinese diversification of agricultural partners as part of a strategy to reduce dependency on key suppliers. Beginning in 2000, China signed dozens of deals under the ChinaAfrica Cooperation Forum (Focac) aimed at boosting trade ties, particularly in soybeans and other grains, through multibillion dollar investments. Tanzania was the last African country without an agricultural deal with China.
Industry of machinery and agricultural equipment can benefit
During the Bolsonaro administration, Embrapa showcased technologies in tropical agriculture to ambassadors from 32 African countries at an Itamaratysponsored event in October 2021. The meeting proposed a collaboration to spread the Brazilian model on this continent. ThenAgriculture Minister Tereza Cristina emphasized at the time that Brazilian technologies could actually boost production systems in Africa. And besides the exporters of various agricultural products, one of the most interested parties of this initiative is the Brazilian agricultural machinery and equipment industry.
Researchers have devoted themselves to the question of whether Africa could become a competitor to Brazil in exporting soy, given the profile of the African continent and the possibility that Embrapa’s technology will be used in the production of the grain. Despite the fact that soybean production in Africa is insufficient to meet its own needs, the continent has a large area with climate and soil characteristics similar to those of the Cerrado, which could allow the region to become a significant producer becoming a tropical farming technology. of which Brazil is the leader. But before that, experts emphasize, the countries in the region would have to resolve ecological, social and political conflicts in order to boost production of the oil plant.
There are now areas on Brazilian national territory that can be integrated into production. Unlike Europe and the United States, which no longer have room to expand agricultural frontiers, the country also has the largest freshwater reserves in the world at 15% of the total, signaling the opportunity to increase irrigated land. Given the prospects of global population growth, the forecasts for the global agribusiness are promising. The Brazilian cerrado and the African savanna have physical space to expand food production.
During the Minister of Agriculture’s visit to China two weeks ago, he tried to attract investment in restoring and planting degraded land for agriculture. China’s Cofco International has already expressed an interest and is due to send a mission to Brasília next month to start negotiations. The operating model has yet to be evaluated and one possibility is to involve the National Bank for Economic and Social Development (BNDES).
Larissa Wachholz, director of Vallya Agro, which works to attract Chinese capital into Brazil’s agribusiness, believes Brazil’s investment in Africa’s grain export potential presents more opportunities than risks. It is essential that the state participates pragmatically and wellcalculated in the spaces that will open up in the next 15 years. “It is better not to be absent from this process, which will take place anyway, and to run after others,” he said. She recalls that China, as a major agricultural producer, has also made progress, with significant increases in productivity of up to 4% per year.
“It is natural that the world’s second largest economy and largest population, about 20% of the total population but owning only 8% of the arable land and 5% of the water resources, should be concerned about the diversification of its food suppliers. It is a road of no return, especially after the disruptions to international trade caused by the pandemic, the ChinaUnited States trade conflict and the war in Ukraine, which also affected fertilizer supplies,” she explained.
For this reason, the specialist, who has closely followed transactions between Brazil and China for 15 years and has advised former Minister of Agriculture and current Senator Tereza Cristina (PPMS), believes that Africa should become a grain producer, but it has still done overcoming land difficulties and lack of technical and administrative knowledge. Brazil can benefit from this last point by helping to build African capacities.
“I find Brazil’s strategic positioning interesting because Asia as a whole, on its path of accelerating economic growth with the rise of the middle class, tends to increase its consumption of animal proteins, requiring greater amounts of soy and corn production. This is a great opportunity and Brazil should be at the forefront of this process,” he noted.
Other experts estimate that Brazil needs to invest in more trade deals with other countries to reduce surpluses and thus avoid a likely scenario in which China slows the pace of Brazilian soybean purchases.
Another option would be to divert soy to the national meat herd diet, a growing item in the export basket that has four to 10 times more added value per ton than soy.
Russian and Chinese attack on the African continent
China and Russia Brazil’s partners in the BRICS economic group, which also includes India and South Africa are increasingly competing for political and economic influence in Africa as the West reduces its presence on the continent. China in particular has invested heavily in Africa, including infrastructure and economic cooperation projects. Meanwhile, Russia is trying to rekindle its historic ties with former Soviet allies on the continent, such as Angola and Mozambique. Despite competing for the same markets, the two countries are enjoying evercloser ties.
According to the latest consolidated data, AfricaChina trade increased by 35% to a record US$254 billion in 2021, while AfricaRussia trade was US$18.5 billion in the same year.
In a recent article for People’s GazetteCongressman Luiz Philippe de Orleans e Bragança (PLSP) classified the Chinese attack on developing countries as a new colonialism through ambitious investment plans in infrastructure works, especially of the New Silk Road.
“Many countries in Asia and Africa that have signed this agreement are effectively becoming colonies of China because they do not comply with the payment terms. It’s reasonable to guess that Brazil is taking the same risk,” he said. The New Silk Road has 145 countries, 44 from Africa, 42 from Asia, 29 from Europe, 20 from Latin America and the Caribbean and 10 from Oceania. However, the initiative stalled after causing shocks to the Chinese economy and corruption scandals around the world.
Chinese companies have been aggressive in buying land in different parts of the world, especially in Africa. According to Land Matrix, a European agricultural surveillance organization, from 2011 to 2020, the Chinese acquired 6.5 million hectares dedicated to agriculture, forestry and mining. This process of conquering territories also involves loans to countries made by Chinese banks.
Fearing the Asian giant’s increasing control over food sources and natural resources, analysts defend legal restrictions like Brazil’s in place to prevent these attacks.
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