Steve Jobs and I are both billionaires, if you average our two incomes.
Likewise, Brazil has long been a relatively wealthy country, among developing nations. One of the big problems has been a lopsided distribution of that national wealth—a whole lot of people destined forever to be stuck with incomes relatively like mine, and a small cadre of elites born into incomes that look more like those of Steve Jobs.
But strict adherence to economic orthodoxy has succeeded in developing a slightly flatter wealth distribution in this country, and a nascent middle class is rising up between the filthy rich and the appallingly poor. In fact, CNBC reports that, from 2003 to 2009, some 35 million people joined Brazil's middle class, with 20 million more expected to fill its ranks by 2014. And an economic study by a Brazilian researcher says Agriculture may be one of the principal drivers behind that transformation for the better.
Adriana Silva of Esalq, the Luiz de Queiroz College of Agriculture says that, as Brazilian agriculture increased its efficiency in the 1980s and 1990s, food costs went down. Agriculture passed much of the saving on to consumers, rather than pocketing the difference. As a result, the agriculture sector, Silva says Brazilian agriculture has contributed around $460 billion to the rest of society in the 13 years from 1995 to 2008, as inflation had been held at bay and incomes—especially for the poorest 10 percent of society—have gone up.
And, within the "agriculture sector," Silva indicates, the biggest group to transfer wealth to society as a whole was—you guessed it—farmers. The amount of wealth transferred from production agriculture, as opposed to other portions of the sector, like, say, processing, came to about $215 billion of that total. And that went a long way to helping Brazil finance its ongoing effort to build a middle class.
Silva's study concludes that farmers' and ranchers' ability to effectively transfer so much wealth to society as a whole was brought about by productivity gains. After all, in 1994-95, Brazil's national average soybean yield was 41.3 bushels per acre. By 2009-10, Brazil' national average yield had reportedly hit 43.6 bushels per acre. Back in 1997-98, that was more like 34¼ bushels per acre, according to National Development Bank officials.
Those kinds of gains would make even a Bill Gates or a Steve Jobs demur. But handing a big chunk of those gains back to society is an even bigger feat. So, newly-middle-class Brazilians: get into that new car you bought and head out to a farm or ranch. It's about time to hug a Brazilian producer.
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