The treasuries of the US and European Union were engaged in a battle that
appeared it would not end. Over-production of agricultural products meant that
markets did not exist, and prices in the world market had fallen below the cost of
production. While both entities maintained they were not subsidizing their
farmers, prices continued to fall while farmers were receiving more of their
revenue from government treasuries than from the market.
I had utilized my Nuffield Scholarship studying the European Market and
did not believe these alliances were ready to step back from encouraging farmers
to produce.
I had interviewed US Agriculture Secretary Mike Espy and asked him
about market distortions. His reply: “America is the market.” At the time the US
was consuming about 80% of its Ag production and had to find an international
home for just 20%. This ratio was reversed for Canadian farmers.
Ken Goudy, a farm activist from Saskatchewan came up with a strategy that
would return sanity to the grain markets: cut production. He had developed a plan
that would reduce the amount of grain produced in the world by about 8,000,000
bushels annually, and the result would be better return from the market place. His
scheme included a $250 sign up fee that would be used to administer the program
through a non-profit corporation. His main targets for reducing acres were Canada,
the US and Australia, but he also saw the potential in Brazil. That country was just
coming on line as a soybean producer.
Goudy’s idea seemed a bit farfetched but he did have a proven record with
Focus on Inputs, a company that was instrumental in having farmers get access to
generic Trifluralin; notably the price of the product had dropped to about a third of
what it was earlier.
Ken invited me and another farm broadcaster from Chatham, Dennis Guy,
to join the group travelling to Brazil. There was some confusion as to how much
of the costs Ken would cover but the mix-up was as much my fault as his because
we did not clear up what ‘out of pocket cost’ included. In the end the trip cost me
more than expected, but I learned much more than expected. I thought I would
accept the invitation just to see Brazilian agriculture; I got that and a whole lot
more.
We visited several states in southern Brazil where soybean acreage was
expanding; the whole concept of three crops a year takes on different meaning
when you are talking about millions of acres being opened up.
The land being cleared in the interior of the country provided enough
mahogany to pay for the clearing. Regulations in place required a percentage of
land to go into nature preserve; that number changed from a 20/80 split to 80/20 as
you moved northward. Additionally, farmers were not required to reserve a piece
on each individual farm; instead they were allowed to bank larger plots, resulting
in wider areas of untouched preserves.
We toured several farms and Dutch communities in the states of Mato
Grosso and Mato Grosso do Sul (more on that in the other Brazil chapter) and we
had a meeting with the Brazilian minister of agriculture. Goudy and a few of his
key people were at the table with the Minister, while Dennis and I were seated
safely in the back of the room where a grouping of chairs had been arranged for
just such an occasion. Clearly, we represented the gallery.
Goudy explained to the Minister: “If Brazil continues to expand its bean
production it would drive the current price of $6.00 a bushel down to $5.00.” She
nodded. He continued in the same vein, speculating that further expansion might
bring that price down to $4.00, adding he was not sure she understood the impact
of her country’s capacity to produce.
“No you do not understand,” she said. “We are a developing country, and
my farmers can make money at $3.75 bushel.” Shortly after that the meeting
concluded.
While the subject did not come up at this meeting, GMO soybean
production was a concern. Brazil was marketing their production at non-GMO on
the world market. Farmers refused to test beans for Roundup Ready (the Monsanto
trademark for its patented line of genetically modified crop seeds, resistant to the
herbicide Roundup), explaining why GMOs were not used: “GMOs are illegal in
our country. There in no need to test the crop. “
Visits to farms showed extensive use of Roundup for other practices. Added
to that, the use of brown bag seed meant Brazilian farmers did not have the
expense of the Technology Use Agreement that farmers in Canada and the US
were paying for. Essentially, this practice gave them the advantage of cheaper
seed, sold as a premium crop.
I would not go so far as to say there were no environmental concerns in
Brazil; their placement of forested areas in land banks would disprove that.
However, lack of environmental regulations, resulting in reduced production costs
gave Brazilian hog farmers a decided advantage over Canadians.
The trip taught me so much more than Brazilian agriculture. A visit to the
capital of Brazil was an eye-opening experience. The site for the city of Brasilia
was selected and the city built in less than four years, with tradespeople being
offered free apartments if they would take jobs in the developing city.
While most development in the country had taken place along the coast,
Brasilia was located in the interior of the country. Transforming green fields into a
capital city in 41 months meant everything was built with very similar
architecture, i.e. the concrete block, plastic statue architecture of the 1950s.
Planning had begun much earlier but construction began in 1956 and was
approaching completion in 1960. Because of its modernistic architecture
(everywhere), in 1987 Brasilia was named a UNESCO World Heritage site. It was
an unusual city—you just do not expect every building in a city to be of the same
period.
This time period was also the height of the American automobile industry.
Main Street in Brasilia stretched across 10 lanes, with five identical buildings on
each side of the street to house various government departments. No favouritism,
they were all located in identical buildings.
The design of the city was patterned after an airplane with a wide Main
Street appearing as they usually do, and the cross streets going off on an angle like
the wings would on an airplane.
While not delivered by the government we also got a lesson in South
American politics using Brazil as an example. Eighty percent of the country’s
wealth was concentrated in the hands of six extended families. The power and
influence of these families showed up in most decisions made by the government.
Uneven distribution of wealth was as amazing as anything we saw. The
poverty in Sao Paulo was shocking. The city’s population was approaching ten
million. The change from financial districts to residential was overwhelming, and
the change of atmosphere at nightfall was equally dramatic. The line was: ‘When
the rich get a new fridge, somebody in the slums gets a new house.’ Yes, we saw
people living at the dump and their only shelter was a cardboard box.
It was a decade later when the Olympics were coming to Rio that stories
surfaced of the efforts undertaken to rid the streets of the poor and the homeless
children—they were picked up by trucks, taken to the dump and shot. It did not
surprise me in the least. I had observed few if any social programs and even less
concern for the poor.
A visit to a Dutch community spoke volumes about the education system.
Our host told us, “We cannot wait for the government schools. They are too slow
and not good enough. We have our own education system.”
I pressed him about the training they provided for their young people.
What about trade schools, and to what level did they take their responsibility?
“We train our own Dr. of Veterinarian Medicine,” he said matter of
factually. And again, “We cannot wait for the government.” You can learn so
much, not in schools, I found.
It was not only the descendants of Dutch immigrants who were hungry for
information. A look at proportional usage of time on the Internet shows Brazil far
ahead of the curve. It is estimated that about 3.2 % of the world speaks
Portuguese. Portuguese being the first language of the majority of Brazilians,
Brazil ranks highest by far as contributing to this number. Brazil placed 9 th in
percentage of Portuguese speaking, ranking 5 th in usage of Internet, accounting for
4.1%. The country was punching well above its weight class when it came to
usage of the Internet, and their advanced approach to technology showed in other
areas as well.
Travelling with a group of US farmers was a learning experience in itself,
lessons that Dennis and I would discuss when we got back to our room at night.
The best example: at the end of the trip Goudy asked for our input on what we had
seen and how he might take his message of Focus on Sabbatical to North
American farmers—and have them buy it. (He believed that Brazilians had already
been convinced to comply.) The focus was to reduce grain production by eight
billion bushels in one year and create enough of a shortage to drive up world grain
prices. It is not often that I am viewed as the discerning voice of reason, but this
time Dennis assured me of that place with his comment: “You are viewed as the
Lunatic Fringe at this time,” he said right out loud, “You need to speak to the
average farmer and come across as one of them, having a common goal and
common sense approach. The idea is not going to fly, when you ask a farmer to
buy into your group and take land out of production.”
I nodded.