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Corn+Soybean Digest

Brazil's Biotech Challenges

A lot of producers — American and Brazilian — have aerial photos of their farms on their office walls. It's a different perspective on the familiar ground they work every day at eye level. Sometimes, being able to understand both the short view and the long view together allows for a better perspective on what's going on overall.

At eye level, the soybean situation in Brazil is a flurry of fleeting challenges and concerns. Take the biotech controversy. It's not currently legal for Brazilian farmers to grow biotech crops. There could be benefits to that, some say. After all, Europe is the biggest market, and its consumers seem to prefer non-biotech foods. But, it appears, the non-biotech position taken up by Brazil's courts seems to be causing more problems than it solves.

For example, China's purchases account for about one of every five rows of soybeans grown in Brazil. Or at least it did until this year, when the Chinese government began demanding safety certificates on imported biotech soybeans, issued by the government of the country where the beans were grown.

Biotech beans cannot be grown legally in Brazil for commercial purposes, so the Brazilian government can't issue safety certificates. At the same time, China knows that Brazil — legally or otherwise — grows a lot of biotech beans and wants the certificates. The impasse is either solved or not solved depending on who you listen to. But the net effect is that $1 billion worth of soy complex exports from Brazil to China are at risk.

And then there's Europe, where Greenpeace is distributing brochures to food associations and companies, urging them to buy Brazilian because biotech is not legal in Brazil. This is like saying there is no drinking in dry counties.

Still, this little pamphlet would seem like a real plus for Brazilian farmers, a sort of free advertising for their product. The problem is that Brazilian producers don't generally get more for non-biotech beans, because it is not yet legal to grow any other kind in Brazil.

In the meantime, those who are growing them claim they are reducing input costs and increasing flexibility. In short, there is no reward for a Brazilian farmer to forgo those benefits.

In spite of short-term bumps in the road, Brazilian soybean production is rolling ahead.

Experts say that, even with early problems in this year's plantings, the soybean harvest taking place in early 2003 will be 15% greater than the 2002 harvest, which would make the coming crop more than double the size of the 1996 harvest.

A lot of that growth has come from new land entering production in the states of Mato Grosso, Mato Grosso do Sul and Goiás. In the 1970s, those states accounted for just 2% of Brazil's soybeans. Today they account for more than 60%. And there's also some new production in unlikely areas, like tropical or thirsty regions where it was hard to imagine soybean production at all just a few years ago.

This adds up to a soybean export industry that will generate more than $7 billion dollars, surpassing Brazil's automotive sector in foreign income earned. This is part of the reason for the development of new roads, railroads and ports in Brazil's soybean expansion regions — and with them, jobs.

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