Brazil: Lunch with the Ag Minister

We are wrapping up a whirlwind tour designed to showcase Brazil's dynamic agriculture and growing export capability. As Rossi (left) greets each of us with a warm handshake and pat on the back, I quickly realize: He's the right man to be preaching this gospel. In a week we've met a lot of charismatic folks, but Rossi tops them all. His charm and sincerity could cut through a mountain of political mumbo jumbo. For a journalist, he's a quote machine.

No doubt this quality helps Brazil immensely as it works through delicate decisions on how to grow and yet preserve its vast natural resources. The topic today is foreign investment. Brazil needs capital, but it is mulling limits on foreign speculators. It wants to avoid land grabs.

"What we don't need is land transfers, but rather, partnerships," Rossi says. The answer may come in the form of long-term leases. If the government goes in that direction the law could be modified even this year. Foreign buyers could still buy up to 12,500 acres, depending on the region.

American ways

In the '70s Rossi spent time in America, getting a Ph.D in Business Administration at Bowling Green State University. He also studied in Michigan.

"At the time, I enjoyed seeing how American farmers in the Midwest worked," he says. "That was very impressive for me. At the time the production gap between Brazil and the U.S. was large. Today it's much closer. The technological gap is lower. But, we always look to the U.S. as our mirror, the way we want to be. We want to arrive where you are, and now we are arriving."

"In soybeans we are very close; in corn, we are low compared to the U.S., but we want to be close to the American level of yields. We are doing very well in many different products. That's what makes the Brazilian system of production different. We are not only experts in traditional foods like coffee, orange juice and sugar. Now we have a very important place in the market for soybeans, beef, poultry, and pork."

Sugar cane ethanol

The rapid ascension of Brazil's sugar cane-derived ethanol industry stumbled since the 2008 global financial crisis. Output failed to rise fast enough to meet demand mainly from the country's large fleet of flex-fuel cars that can run on either gasoline or ethanol.

Brazil is the world's No. 1 exporter of sugar and higher prices for the sweetener since last year made it far more profitable to produce and export than ethanol, which is produced mainly for the domestic market. Domestic demand continued to rise even as supply went stagnant.

"We need to increase our investments in ethanol because demand is so fast growing," he says. "We need to grow our investments. We are leaders in sugar cane ethanol, but our thoughts are to expand it and transform ethanol to a world level commodity."

'The future is now'

As our lunch wrapped up, Luiz Carlos de Oliveira summed up the week. Oliveira is a farmer and secretary of animal and plant health for the Ministry of Agriculture.

The secret to Brazil's vast and dynamic export capability, he says, is that the country has made many technical adjustments to meet specific import requirements. That includes certification demands, slaughterhouse specifications, and requirements for religious purposes, or traceability measures that ensure food products are produced in the proper region and not in the Amazon. He says the country is set up for around 150 of these export specs, but it could easily grow to 300 or more as export volume grows.

"When I was a child I heard that Brazil was the country of the future," he says. "The future is now. We are ready to produce. No other country can achieve so many different requirements. No other agriculture has the same flexibility to produce in so many different ways."

This nimble ability to meet export demand, he adds, is thanks to streamlined communications between levels of government.

"No other country has such a short distance between the President, Ag Minister and technical staff in order to accomplish all these export requirements," he says "This is the difference Brazil can make to the world."