is part of the Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

  • American Agriculturist
  • Beef Producer
  • Corn and Soybean Digest
  • Dakota Farmer
  • Delta Farm Press
  • Farm Futures
  • Farm Industry news
  • Indiana Prairie Farmer
  • Kansas Farmer
  • Michigan Farmer
  • Missouri Ruralist
  • Nebraska Farmer
  • Ohio Farmer
  • Prairie Farmer
  • Southeast Farm Press
  • Southwest Farm Press
  • The Farmer
  • Wallaces Farmer
  • Western Farm Press
  • Western Farmer Stockman
  • Wisconsin Agriculturist

Brazil's GMO soybeans 'unfair advantage'

The analysis, prepared for Sen. Charles Grassley, R-Iowa, says 10 percent to 20 percent of Brazil’s 2003 soybean crop is Roundup Ready varieties, “even though these varieties are not legally authorized.”

With about 40 million acres of soybeans, illegal plantings could total from 4 million to 8 million acres.

By not paying the technology fees associated with those acres, Brazilian farmers have an unfair advantage over U.S. farmers, Grassley said.

In recent months, concerns about the illegal planting of these herbicide-tolerant varieties “have escalated,” the report says.

“While the battle over the approval and use of biotech products in Brazil has been on hold for the past five years, producers in the southern state of Rio Grande do Sul are smuggling genetically enhanced soybean seeds from Argentina.”

The use of herbicides on soybeans “has been dramatically reduced” by the introduction of Roundup Ready varieties, the report noted, as has been the case for the number of herbicide applications.

Monsanto, the owner of the technology, has estimated, the FAS report said, that if the Brazilian Congress approves the use of Roundup Ready soybeans, close to 50 percent of the plantings will be of those varieties by 2004/2005, continuing to increase to 70 percent within the next 10 years.

U.S. producers planted 80 percent of their soybean acres to Roundup Ready varieties in 2003.

“For Brazilian farmers, the use of herbicide tolerant varieties will result in higher yields and lower herbicide and weed management costs,” the report said. “But they will have higher seed costs due to licensing fees.”

Monsanto is attempting to recoup its losses on the licensing fees for the illegally planted soybeans from multinational companies that buy soybeans in Brazil. It has not said how successful that effort has been.

In an attempt to minimize producer losses earlier this year, the Brazilian government approved the export of 6 million tons of harvested biotech soybeans, the equivalent of 12 percent of the country’s annual harvest.

Brazil’s beans, the FAS report said, have another advantage over U.S. beans in being exempt from a 13 percent tax, which “greatly contributed to the competitiveness of Brazilian agribusiness.”

Contrary to reports circulating in the United States, the analysts said they “are not aware” of policies by Brazil’s government that would give producers sharply lower prices for inputs or farm machinery in comparison to prices paid by U.S. growers. Nor, they said, did they find evidence that high technology inputs were available to Brazilian growers at discounted prices due to rampant soybean seed piracy.

Brazilian farmers may pay less for herbicides and fungicides, the analysts said, because of exchange rate benefits, lower import tariffs for inputs, and local competition among companies and exclusive contracts with farmers. “In addition, major manufacturers like John Deere assemble farm machinery in Brazil; therefore, final equipment sales prices would reflect lower input and labor costs.”

Access to transportation is “one of the most important factors” in determining the value of agricultural land in Brazil, the report said, with about 65 percent of the country’s soybeans transported by truck.

“Clearly, when it comes to moving crops from farm to processing facilities or ports, the U.S. is more efficient than Brazil. Though the government has recognized the need to improve its rail, barge, and roadway systems, it has not been able to allocate the funds needed to markedly improve infrastructure.”

Because of the profitability in Brazilian soybean production, “many firms and individuals are willing to invest…and producers are able to secure financing from a large number of sources, including input/equipment suppliers, traders, soybean processors, banks, landowners, and the government of Brazil.”

While the soybean industry uses some international capital to finance expansion, the report said “much of the capital comes from the sale of soybeans and products. The U.S. is likely the primary international origin for private investment in Brazilian soybean production, followed by the European Union and Japan.”

Though still limited, U.S. farmers have directly invested in Brazilian production and there are discussions about setting up investment funds to allow them to indirectly invest in Brazilian agriculture. Japanese firms have also made significant investments in northern Brazil for production of identity preserved soybeans.

Brazil has a restrictive tax system that penalizes land not in production, the report notes. Depending on location, from 20 percent to 80 percent of a producer’s land must remain forested. If a farmer doesn’t prove that the remaining land is in production, he is taxed at a prohibitive rate. “This discourages the use of land as an investment and encourages the expansion of production.”

While the expansion of crop acres has resulted in some damage to existing natural ecosystems, loss of biodiversity, and extinction of plant/animal species, the report says there is “no evidence that USDA is aware of” that native soil nutrient values are being mined by soybean production.

“In current practice, Brazilian soybean farmers radically increase their attention to soil conservation…and optimum fertilization and liming. Their investment in the land and its care increased dramatically as they increase investment and expectation of commercial returns.”


Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.