The Modernization Of Brazilian Agriculture

As a topic for discussion, the modernization of Brazilian agriculture is especially interesting and important. In the first place, Brazil, together with Argentina, is rapidly becoming an important “breadbasket” for the world. It is competing exceptionally well with the United States for soybean and other commodity markets, and in a very short period of time has begun to export US$3 billions a year in beef, after having become the world’s largest exporter of frozen orange juice and poultry, and becoming increasingly important in other commodity markets. Even the New York Times refers to Brazil as the new breadbasket of the world. In the second place, it is important to understand how Brazil has become such an important competitor in international markets in such a short time. This story seems to be poorly understood, and for that reason I plan to concentrate my remarks on that issue. It is interesting that Brazil has often been referred to as a “sleeping giant.” Observers have always expected that Brazil could compete well in international market – both in agricultural and industrial products. In fact, Brazil became well known in the past as the “country of the future” by close foreign observers. Ironically, many Brazilians complained that Brazil could not compete in international markets, and for a long time that described its performance. What the record shows, however, is that once Brazil got its economic and science and technology policies in order, it could compete extremely well. The main elements of these policies include (1) trade and exchange rate policies, and (2) science and technology policy. Both are important, and both have important details that I want to consider. As a special third topic, I want to discuss the inter-sectoral labor market and the flow of labor out of agriculture as the sector has undergone a major transformation. Developments in that sector are an important part of the competitiveness issue.