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Corn+Soybean Digest

Argentina's Acreage Closes In On Brazil's

Mounds of lime lie ready at the edges of prepared fields along rural roadways in the Brazilian state of Minas Gerais. Farmers are just finishing planting the new crop, and only a few dark clouds mar an optimistic future.

Let's face it, things look pretty good right now for Brazilian soybean producers. The U.S. crop is down due to dry weather in the Midwest, putting a little upward pressure on prices. The local currency has lost 60% of its value since the start of the year, making Brazilian beans good business.

Planting time this year coincided with elections in which leftist presidential candidate Luiz Inacio Lula da Silva, known simply as Lula, has been elected. That's after years of government by a center-right coalition that provided economic stability if not growth.

A leftward shift toward Lula scares a lot of soybean farmers because of his past relationship with the radical Landless Movement. That movement has occupied large farms in the past, and spilled more than a little blood in its effort to redistribute property.

Lula has also spoken out against biotech, which some observers reckon has cost Brazil a bundle in terms of competitiveness. With Lula in office, Brazil's final approval of biotech beans for commercial scale planting could be slowed.

Former Argentine Secretary of Agriculture Marcelo Regunaga says Brazil's delay in approving biotech has already cost the country's farmers a lot. To prove his point, he notes that in 1996, when Argentina approved Roundup Ready soybeans, Brazil produced 90% more soybeans than Argentina. Last year, Brazil was producing only 42% more. Not all of that catching up is due directly to the fact that Argentina adopted biotech while Brazil delayed. But, says Regunaga, it was a factor.

Meanwhile, China weighs in with its confusing and oft-changing demands on government certificates regarding soybeans. In short, the Chinese are demanding that soybean shipments to their country from anywhere in the world be accompanied with government certificates attesting to the safety of the biotech beans.

Considering the batteries of tests GMOs have undergone, the U.S. and Argentine governments have no problem issuing such certificates. But the Brazilian government cannot make the same offer, because Brazilian farmers are not permitted to grow them in the first place.

The Chinese know that many Brazilian soybeans are biotech, even if illegal, but are demanding the certificates from Brazil anyway. Iwao Miyamoto, president of Aprosoja, the Brazilian soybean producers association, estimates that a quarter of all Brazilian soybeans are genetically modified.

At this point, the Chinese government has granted a reprieve on its demands for the certificates until September 2003. But many Brazilians are confused about what the rule will mean to the Brazil-China soybean trade, which accounts for one of every five rows of beans Brazil plants.

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