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Brazil investment in agriculture sector and its
impact
The world's 11th largest economy, Brazil has been strongly consolidated its status as the leading agro food producer and supplier in international arena. With an aim of boosting the agricultural sector, the Brazilian government has come up with its planning of investing 40 billion U$D in respective sector. Agriculture Minister Mr. Reinhold Stephanes, states that the investment plan has been drafted for supporting the agriculture and livestock, which is presumed to be increase by 12 per cent making it 40 billion US dollars. The investment figure was decided followed by the meeting with President Lula da Silva and it will be set into force in the 2008/09 harvest season. The government projects include the recovery of pastures and degraded soils, which is dealt with the soft loans and it is less than the inflation rate. The package structure has extended from actual output to its marketing, credit facility for small and poor farmers, an insurance cover for reducing the risk or covering losses arise due to the climatic changes. Brazil and Agriculture Over the years, Brazil's agriculture sector has registered a massive increase in its overall form. In the year 2005, agriculture production was 10% of the nation's gross domestic product(GDP) but in time period the sector has witnessed a rapid growth with the export now is contributing 27% in total country's export and the sector is providing livelihood to nearly 18 million people, which accounts to 37% of the total labor force. Brazil has been characterized as the prowess in the agro business and contributes to nearly 25 per cent in nation's GDP, which was 390 billion US dollars(approximately) in 2007. The export of agriculture products stood to 38 per cent of the total Brazilian export. The agro sector has recorded 2.81 per cent growth rate in the first quarter of the 2008 as compare to 0.74 per cent of the same period in 2007. Brazil is known as the leading exporter of beef, soybeans, poultry, hogs, coffee, orange juice, sugar, tropical fruits and ethanol from sugar cane and it is supplying in major markets of the USA and European Union(EU). Brazil's increasing global income and availability of productive land, water and labor have driven the export to new heights. Brazil's soaring agriculture export rate has given a powerful competition to USA farmers. Agriculture sector plays a crucial role in the prosperous Brazilian economy. The country's farm exports have reached to the new height of 27 billion US dollars. The government has registered an escalation in the contribution made by the agriculture and livestock towards the Gross Domestic Product(GDP) in first 3 months of year. It has been increased to 4.35 per cent from previous year 1.49 per cent of the same quarter. The total agribusiness exports have reached to US$ 27.2 billion within the duration of january to may. The figure is equivalent to 37.8 per cent of the total export done by Brazil. Brazil has positioned itself as the world power in the agriculture sector and global food sector. But the long term growth of said sector could be dampen by several facts active on supply side. Rising food demand in the domestic sector and the changing demand composition could hamper the growth rate of the progressed agro food exports. Similarly there are many factors which are acting as a catalyst in showing their impact on demand side. Such as increasing consumer demand for higher value of food along with the growth rate of Brazil's bio fuels sector could hamper the surplus export. Why Brazil?
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