Is food the new oil? Fertiliser wars and Brazil as food superpower

Brazil combinesIn the Financial Times, Javier Blas gives us the back-story to the attempt by the world’s largest mining company, BHP Billiton, to buy its largest fertiliser company, PotashCorp. Suddenly fertiliser is big business: in the first eight months of the year, deals valued at $61bn have been announced by companies in the industry, a high that more than doubles the peak hit in 2008. Why? “Countries are starting to see potash much as they see crude oil: as a hunted, strategic commodity. But, as with oil, potash deposits are not evenly spread. A handful of nations – led by Canada, Russia, Belarus and Israel – command the bulk of the reserves. Eight companies control more than 80 per cent of global supply. Two marketing groups – Canpotex for North American producers and BPC for the Russian and Belarusian groups – dominate the global trade.” And just as with oil, China is getting worried: “[It] has to import about half of its needs, a dependency that “may become a major threat to China’s fast-developing national economy and long-term strategic needs”, according to the Chinese Academy of Social Sciences, a think-tank that advises the government. Little surprise, then, that its primary importer of the mineral, Sinochem, says it is paying “close attention” to the PotashCorp battle, suggesting the group could launch a counterbid.” And Blas thinks this is just the start. “The bid for PotashCorp is a litmus test for how companies – and nations – view the prospect of a world with tighter food supplies. In the past century, anguish over who will feed the world has always been answered with breakthroughs that have more than compensated for growing populations. But if a Chinese state-owned company should plant its flag on the potash industry, it could indicate the introduction of a more cut-throat edge to the geopolitics of agriculture.” Meanwhile, this week’s Economist focuses on the transformation of Brazil into the world’s first tropical food giant (see chart), without Brazil ag exportsdeforesting the Amazon (the action has been 1,000km away from the rainforest). It’s all down to the transformation of the cerrado, the Brazilian savannah, from scrubland to breadbasket. How? Embrapa, the Brazilian Agricultural Research Corporation, set up in 1973. Embrapa shows what publicly-funded R&D can achieve, transforming the cerrado’s acidic soils by mass application of lime, importing and adapting African grasses to make cattle ranching feasible, developing nitrogen-fixing bacteria suitable for cerrado soils and most important of all, turning soyabeans into a tropical crop through ‘old-fashioned crossbreeding’, and now GM. It has also pioneered ‘no-till’ agriculture, in which the soil is not ploughed and so retains its nutrients (and its carbon): in 1990 Brazilian farmers used no-till farming for 2.6% of their grains; today it is over 50%. ‘Can the miracle of the cerrado be exported, especially to Africa?’, asks the magazine? Here’s its answer: ‘Brazil’s agricultural miracle did not happen through a simple technological fix. No magic bullet accounts for it—not even the tropical soyabean, which comes closest. Rather, Embrapa’s was a “system approach”, as its scientists call it: all the interventions worked together. Systems are much harder to export than a simple fix. “We went to the US and brought back the whole package [of cutting-edge agriculture in the 1970s],” says Dr Crestana. “That didn’t work and it took us 30 years to create our own. Perhaps Africans will come to Brazil and take back the package from us. Africa is changing. Perhaps it won’t take them so long. We’ll see.”’ What’s missing from these two articles on food? The people who grow it. The Economist dismisses Brazil’s millions of small scale farmers as ‘hobby farmers’, incapable of improving yields or playing a useful role. But countries like Vietnam have shown that given the right support, small farmers are perfectly capable of driving agricultural take-offs. Small farmers also constitute many of the world’s poorest communities. Will they benefit or lose as food becomes the new oil?]]>

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5 Responses to “Is food the new oil? Fertiliser wars and Brazil as food superpower”
  1. Claudia Bjørgum

    Few things to be considered when discussing Brazilian agriculture:
    1. Brazil has a cruel history of land concentration. It ranks as the 2nd most land concentrated country in the planet. Around 50% of the total agricultural land in Brazil belong to only 1,6% of the land owners.
    2. The Economist’s article reproduces the discourse of those who for 500 years have managed to stop the agrarian reform. Brazil is in urgent need to effectively change its extremely concentrated structure of the land, but the reform doesn’t interest the rich and powerful land owners friends of The Economist.
    3.Between 1st-7th September (this week) Brazilians will vote (yes or no) to answer a public consultation to decide whether or not the government must put a limit on the size of land properties. See campaign video:
    4. This public consultation is the worst nightmare of the modern agribusiness-export-monoculture-latifundium owner, the former slave master of the colonial times.
    5. The expansion of the commercial agriculture for export, like those behind the soy project supported by Embrapa, is the new excuse the modern land masters have to keep their obscenely huge properties intact.
    6. The agriculture census published in 2008 by IBGE have showed that the micro and small farmers of family agriculture have higher yields than the large units of commercial agriculture. They use less pesticide and produce up to 70 percent of the staple food of the Brazilian people.
    7. The expansion of the large farms of commercial agriculture threatens the feeding of the Brazilian population and this is what NGO’s (Oxfam included) all over Brazil are trying to tell the world but no one seems to listen.
    8. The Cerrado is not as simple a the Savannah, it is a complex natural environment, it has one of the highest biodiversity among the environments of Brazil, the destruction of Cerrado for the expansion of the commercial agriculture threatens Brazi’s biodiversity and is pushing the animal farms toward the Amazon region.
    9. It is a great mistake to assume that the expansion of soy around the Cerrado doesn’t put the Amazon at risk. The Cerrado survived hundreds of years mainly occupied by non agressive grazing farms which are now being pushed North, toward the Amazon after the forest have been cleared. A port is being expanded to export the Amazonian beef through Maranhão, together with alumina and iron…
    10. The Cerrado is home to some of the most traditional indigenous populations outside the Amazon region. The expansion of soy and cane around the Cerrado have forced the displacement of many of those traditional people.
    11. The three Americas have some the most violent cities in the world. South, Central and North America have sad records of violence never seen in any other place in the world without a war going on, it is due to the heritage of the land concentration, inequality and political violence. The expansion of commercial agriculture threatens the rural areas, force migration and create worse living conditions for the urban poor.
    12. The large commercial agriculture of monoculture unit is also home to severe and persistent cases of contemporary slavery, where workers are trapped by debts in remote areas, left to the mercy (none) of the land owner, not allowed to quit their jobs living in eternal debt.
    13. The monoculture farm destroy the biodiversity of the environment and threatens the future generations.
    14. According to INCRA, the small farms in Brazil (those with 200 ha or less) respond for 84% of the jobs in the rural areas: 14,4 million jobs while the large units (those with more than 2.000 ha of land) responds for 2,5% of the jobs, around 420 thousand jobs. The middle sized properties respond for what is left out.
    15. According to INCRA 92% of the rural properties in Brazil are considered small and they occupy only 30% of the 420 millions ha of land officially registered.
    In my opinion, Brazil is definitely not a good example for Africa right now. Maybe soon.
    My friend, I dream of the day The Economist will be part of your past only.

  2. I worked with one of the Embrapa engineers, back in Nicaragua. The approach is really interesting to the degree where industrial agriculture normally replaces knowledge of the ecosystem and soil by blanket application of chemical inputs and always heavier machines. Instead the “new approach” is very much based on detailed localized knowledge generation.
    Knowledge of the local ecosystem and soil is normally more typical for small scale, traditional agriculture.
    I am convinced that small scale attention is capable to better integrate the different aspects needed to reach maximum sustainable land use per area unit.
    The “NGO-approach” to agriculture was in those days heavily focused on a few “alternative practices”, such as the use of Mucuna Pruriens, and ignored or even refused to take into account solid facts (such as the amount of work needed to make compost or the nutrient balance that could not be solved only relying on recycling).
    Taking the small farmers on board when improving agriculture requires more specific localized research. NGOs will have to abandon some principles on (hyper)organic farming to stand by the small farmers so they get their share of extension and research budgets.

  3. Jeffrey Ashe

    Oxfam America’s Community Finance department has contracted world expert in green manure Roland Bunch to essentially what Brazil has done in desperately poor Mali staring with women subsistence farmers who are part of savings and lending groups (Saving for Change), not commercial farmers.
    With the more the tripling of Mali’s population in 60 years the time land is left to fallow to recover its fertility has decreased from 15 years to two years or none. The result is collapsing soil fertility and consequently rapidly declining production which Roland believes will lead to famine in the region in the next few years.
    The solution, plant nitrogen fixing cow peas which also build organic material in the soil, plant rows of fertility boosting bushes that strain out the topsoil laden Harmatan winds that kick up dust storms for months each year and plant up to 60 trees per hectare to provide some shade to the fields (about 15% coverage) to lower soil temperature.
    The outcome doubling or more soil fertility within four years, increasing production by a factor of two to four times, increasing soil moisture thereby extending the growing season and raising the water table and providing a source of firewood as the trees are trimmed so they do not provide too much shade.
    The spread of the technology is based on the same mass-scale, low cost, virally self replicating approach used to train savings groups with the hope that this technology will spread across Mali in the next decade hopefully staving off the famine that Roland predicts.
    For more information contact Jeffrey Ashe, Director of Community Finance Oxfam America.