Successful Commodity Development and...

UNCTAD Secretary-General's High-Level Multi-Stakeholder Dialogue on Commodities

in the context of UNCTAD XII

28-29 January 2008

Successful Commodity Development and

Diversification Strategies – the Case of Brazil

By

Mr. Luis F. Vieira Coordinator, Embrapa Labex Europe, France

The views expressed are those of the author and do not necessarily reflect the views of UNCTAD

Embrapa Labex Europe

Successful Commodity Development and Diversification Strategies:

The Case of Brazil

UNCTAD Secretary-General’sHigh Level Multi-Stakeholder Dialogue on Commodities

in the Context of UNCTAD XIIJanuary 28-29, 2008

Geneva

Luis F. VieiraEmbrapa Labex Europe


Outline

• Industrial Development in Brazil

• Modern Agriculture Development in Brazil

• Implementation of the Green Revolution

• Integration to National, Regional and Global Supply Chains

• Scientific Intensification & Construction of aEnvironmentally and Socially Sustainable Platform


Industrial Development in Brazil

• First Industrial Censuses:

- Consumption goods for the internal market- Coffee exports still represented 70% of the total exports

• 1930- 1956 “Industrial Revolution”Natl. Council of Petroleum (1938)

- 1920 (2nd): 13.000+ companies- 1907 (1st): 3,000 companies

Natl. Steel Co. (1941)

Vale do Rio Doce (1943)San Francisco

Hydroelectric Co. (1945)

Natl. Bank for Economic(& Social) Devlpt. (1952)

PETROBRAS (1953)


• Internationalization: 1956 - …- Increase petroleum production- Increase supply of electricity- Development of transportation network

– Industrial Growth 1956 – 1964

- Metal and Steel (automobile makers- Chemical and pharmaceuticals- Ship building- Installation of several transnational groups

– Consolidation: from 1964 - …- Industry expansion supported by internal market growth- 1979: semi & industrial exports

Industrial Diversification in Brazil

37% Capital Goods; 63% Consumption Goods


Modern Agriculture Development in Brazil

• 1st Phase: late 60’s thru the 80’s - Implementation of the Green RevolutionNational Policy (mainly) & Economic Oriented

• 2nd. Phase: mid-80’s thru the 90’s- Integration to National, Regional and GlobalSupply ChainsNatl. & Intl. Policy (mainly), Market & Intl. Econ. Oriented

• 3rd. Phase: early 90’s thru …- Scientific Intensification & Construction of a

Environmentally and Socially Sustainable PlatformGlobal Market (mainly) & Intl. Economic Oriented


Implementation of the Green Revolution

- Food & agric. raw-material shortages

- Import substitution

- Urbanization & Industrialization: – The need for wage-goods (cheap food)

- Comparative Advantages– Land availability– Abundant natural resources (water, weather, …)– Industry potentially able to provide inputs– Some well established Ag. Research capacity


Policy and Development Strategy

- Institutional Development (New institutions and New Governance models)

- Strengthening Public Policy Capacity- Strengthening Public Ag. Research capacity- Strengthening Public Ag. Extension system- International cooperation in S&T

- Infra-structure development (electricity, roads, storage facilities, etc..)

- Credit, price support, public stocks, etc…


New Institutions & Governance Models

- CFP: Commission for Financing the Production

- COBAL: Brazilian Food Corporation

- EMBRATER: Braz. Corp. of Tech. Assistance & Rural Extension(SIBRATER System)

- EMBRAPA: Braz. Ag. Research Corporation (SNPA System)

- CEPLAC: Exec. Comm. of the Cocoa Crop Plan

- IBC: Brazilian Coffee Institute

- IAA: Braz. Institute of Sugar & Alcohol

- …


Strengthening Agricultural Research

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74 78 82 86 90 94 98 2000 2002 2004

BSc MSc PhD

CommodityCenters

EcoRegionalCenters

ThematicCenters

Agricultural Research was a powerful tool to boost Brazilian development through Agriculture, with the other policy support


S&T International Cooperation


Brazilian Savannah(CERRADO)

• Total Area - 204 Million Hectares• Well defined dry and rainy seasons• Water availability

• Until the 70’s considered inapt for Agriculture

CERRADO: A New FrontierThe invention of the “Tropical Agriculture”


Some Results and Impacts

• Import Substitution

• Auto-sufficiency

• New Agriculture Frontier

• Intense Diversification

• Productivity Growth

• Production Growth

• Solution for Shortages of Food &Raw- Materials


Traits and Costs

The negative side:

- Environmental Impacts

- Social Inequities

- Regional imbalances

- Pressure over fragile biomes

Main Traits:

- High Performance Genetics

- Input-Intensive Prod. Systems

- PS specialization (Low Diversity)

- Focus on Productivity


Integration to National, Regionaland Global Supply Chains

• External Debt Pressures

• Hyper-Inflation

• Escalating petroleum prices

• Globalization pressures

• Low competitiveness


Integration to National, Regionaland Global Supply Chains

• Opening of the Brazilian Markets

• Integration of the MERCOSUL

• Reform of the Ag. Policy:– Extinction of institutions– Lowered barriers to imports– Substantial reduction of support policies

• Consolidation of the Ethanol Program• Consolidation of the Agribusiness as a Global Player


Reshaping the Strategy of Ag. Research

• Research to support Exports

• Changing Goals of Genetic ImprovementPrograms

• Increase R&D for family-base farming and othersocial groups

• Understanding the markets

• Aiming at the overall productivity of Supply Chains

• Improving and Introducing Quality and SafetySystems

• Developing Post-Harvest Tech.



2006


Scientific Intensification & Construction of a Environmentally and Socially Sustainable Platform

- Food and Non-Food Agriculture (BioEnergy, Drugs, Raw-materials, Tourism …)

- Global Issues (Global Climate Change, Sustainability,Safety, Security, Emergent diseases, ...)

- Economic Issues (Competitiveness, Market Access,Economc Growth, Energy Cost, …)

- Social Issues (Wars, Stakeholders Involvement, Benefitdistribution, Jobs, Income, Integration to markets, …)


The need for a new knowledge-intensive revolution

-To address:

-The raising cost of energy and the pressure to reduce the use ofchemical inputs

- The need to increase the productivity of environmental servicesand natural resources, and to protect fragile biomes

- The multi-functional role of agriculture

- The growing social and technological divide between social groups & regions

- The need to reduce poverty

- The vulnerability of agricultural systems to Global Climate Change

- The growing demand for traceability and certified sustainableproduction


Will require in the next 10 to 20 years:

- New genetic materials, at a faster pace, and new tools for safety,diseases and pests monitoring and combating

- The widespread application of the concepts of precision farming

- The use of multi-product system (agro-animal-forest)

- The widespread use of IT as a production, but also as a trade tool

- Integration of small farmers to the supply chains

- The continuous overall increases in production and productivity

- New policies and new institutions to deal with inequalities andpoverty

The need for a new knowledge-intensive revolution


How to move forward?- Countries, even the poor, need to invest as much as possible to buildHuman Resource and infra-structure research capacity

- Investments will be necessary to provide the “side conditions” to promote Agricultural Driven Development (policy design, to buildmgmt. and institutional capacity, etc)

- International cooperation / partnership will be more than evernecessary to develop S&T, to provide expertise for institutional andcapacity building and to grant access to advanced research platforms

- International cooperation / partnership will be necessary to supportthe “side conditions” creation

- Low-tech and top-down ready-to-use packages will not be enough topromote sustainable development due to the complexity of the issues.At least local R&D capacity for technology adaptation is necessary


Thank you!

[email protected]


Commoditty Research Centers

Wheat

Soybean

Corn & Sorghum

Swine & PoultryCassava & Fruit

Southern Cattle & GoatVegetables

Southeastern CattleForestry

Dairy CattleCoffee

Beef CattleRice & Beans

GoatsCotton

Animal ResearchPlant Research


Eco-Regional Research Centers

Coastal Table Region

Tropical Semi-AridEastern Amazon

PantanalWestern Amazon

Mid-North RegionAmapa

Temperate ZoneRoraima

CerradosAcre

Western RegionRondonia

Other RegionsAmazon


Thematic Research Centers

Bioenergy R&D

Soil Science & Survey

Genetic Resources & Biotech

Satellite Monitoring

Environmental Management

Intellectual Property BureauTropical Agro-industrial Tech.

Publishing AgencyFood Science & Technology

Technology TransferAgro-biology

Special Service UnitsResearch Centers

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