Bolsonaro administration was marked by good relations and joint victories, some criticized by public opinion
12/27/2022
The four years of the Bolsonaro administration have been marked by a flagrant alignment between the president and a large part of Brazilian agribusiness, in a relationship in which both sides have reaped fruits. As seen in the elections, when Mr. Bolsonaro (Liberal Party, PL) won in the main “agricultural” states of the country, the return of Luiz Inácio Lula da Silva (Workers’ Party, PT) tends to end this period of harmony, and the expectation is that the sector will have more difficulties in implementing its demands, despite the great weight of the rural caucus in Congress.
The Parliamentary Agricultural Front (FPA), deputy Sérgio Souza (Brazilian Democratic Movement, MDB, of Paraná), assesses that the sector has been better accepted by society in general in recent years. “We have demonstrated that agriculture is good for human health, for the citizens’ pockets, and for the trade balance. We have mitigated the effects of urban legends that say that agriculture is not good for Brazil.”
Agribusiness is one of the most important sectors of the Brazilian economy. In addition to accounting for about 50% of the country’s exports, the sector is among the most innovative: agribusiness is the third sector with the most companies on the list of Brazilian startups with the greatest growth potential, according to a recent survey by business school Fundação Dom Cabral. Efforts to adopt good environmental, social and governance practices (ESG) are also on the rise, as attested by research such as that of the consultancy Michael Page on the demand from agribusiness for professionals specialized in ESG practices, which grew by 50% between January and May this year.
On the other hand, Mr. Bolsonaro had the rural caucus as a shield in Congress and in the formation of ministries to advance an agenda of measures that pleased the sector but generated strong criticism in public opinion in large urban centers. In this list are the facilitation of access to firearms, the recrimination of land invasions, and the paralyzing of the demarcation of indigenous reserves and the creation of agrarian reform settlements.
“This was the worst management in the environmental area since the end of the dictatorship,” says Eugênio Pantoja, director of Public Policies and Territorial Development at the Amazon Environmental Research Institute (IPAM). “The government lacked the leadership to structure an integrated and forceful action to reduce deforestation in the Amazon.”
Despite climatic adversities, pandemics and war in the last four years, it was a period of abundant harvests, high turnover and record exports, even with criticism from senior authorities against China, the main destination of the sector’s exports. And legislative changes favored private funding to the sector in times of budget tightening that hindered the increase of subsidies in rural credit.
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Tereza Cristina — Foto: Valor
In Congress, also under heavy criticism from society, the rural caucus managed to move forward with proposals on pesticides, environmental licensing, self-monitoring of agriculture and cattle ranching inspection, bio-inputs, and land tenure regularization. There were more difficulties for the agribusiness agendas in the Senate, where the FPA hopes to advance in the next legislature, with the election of congressmen like the former Agriculture Minister Tereza Cristina, a central name in the countryside’s support for Mr. Bolsonaro.
From 2023 on, one of the caucus’ missions will be to fight agendas such as the demarcation of indigenous lands. “We are concerned with the right to property and with the possibility of our sector not being heard”, said congressman Pedro Lupion (Progressive Party, PP of Paraná), who will head the FPA starting in February.
.But perhaps the main problem, with consequences that are difficult to reverse, is environmental policy. The growing deforestation in the Amazon has tarnished the image of agribusiness and has put a brake on trade agreements, such as those between Mercosur and the European Union. Because of the lack of control that has been established, the EU recently approved rules to restrain the importation of products originating from deforested areas.
The rural caucus achieved advances in historical agendas in the Chamber of Deputies, such as the approval of proposals on pesticides, environmental licensing, self-monitoring of agriculture and cattle ranching inspection, bio-inputs, and land regularization, also under heavy criticism from part of society. The obstacle was the Senate, where the FPA hopes to advance in the next legislature with the reinforcements elected in October, such as the former minister of Agriculture, Tereza Cristina (Progressive Party, PP, of Mato Grosso do Sul), who was instrumental in the countryside’s support for Mr. Bolsonaro.
The mission from 2023 on will be to approve these projects and combat agendas such as the demarcation of indigenous lands. “We are worried about the right to property and with the possibility of not having our sector heard,” said deputy Pedro Lupion (PP of Paraná), who will head the FPA as of February.
The possible lack of fertilizers due to the war in Ukraine, the sector’s greatest recent fear, was overcome without major problems, even without significant advances in the National Fertilizer Plan launched this year – now Russia is promising to tax exports of the input.
“It won’t be an easy year. The cost will fall, but not as fast as we would like, and there may be stagnation in the sector depending on the intensity of the drop in prices of agricultural products,” said Bruno Lucchi, CNA’s technical director. The concern is greater with the segments aimed at the domestic market, such as vegetables, fruit, dairy products and independent pig farming.
The future of the Ministry of Agriculture is another source of concern for CNA. “We had a strong, high level ministry, for having these sectors agglutinated. If it is split up, there will be an increase in fixed costs and there may be a loss of efficiency in processes,” said Mr. Lucchi. Family farmers and indigenous communities, among other groups, however, praise the division that will be made by Mr. Lula.
Family farmers and indigenous communities, among other groups, however, praise the division of the portfolio that will occur in the Lula government. “The current scenario is one of dismantling public policies and lack of incentive for the sector, with an increase in violence in the countryside, aggravated by the government’s policy of allowing weapons,” criticized Aristides Santos, president of the National Confederation of Agricultural Workers (Contag).
During the Bolsonaro administration, Brazil’s grain harvest went to 271.2 million tonnes in 2021/22 from 241.3 million tonnes in 2018/19, and the 300 million tonnes barrier is forecast to be broken in 2022/23. Agribusiness exports jumped to more than $150 billion this year from $101.1 billion in 2018.
“We cannot allow a regression. We used to have tremendous insecurity, which scared away investments,” said the minister of Agriculture, Marcos Montes, while highlighting the 450,000 property titles delivered during his administration, some of them provisional.
Among the current government’s disputes with the sector, one of the most important was with the biofuels area, which complained about the cuts in the biodiesel mix in diesel and the gasoline price policy, which affected the competitiveness of ethanol – although the direct sale from the mills to the service stations was approved.
By Rafael Walendorff — Brasília
Source: Valor International