By Silvio Ribas
President Luiz Inácio Lula da Silva (PT) wants to accelerate the transfer of technologies created by the Brazilian Agricultural Research Corporation (Embrapa) to maximize production in Africa.
The idea is to boost projects in this direction that Brazil has carried out for two decades since the PT’s first mandate, which began in 2003.
But there is a controversial issue: will Brazil invest in training countries to become competitors of Brazilian agribusiness?
And will it do this when its main importer, China, indicates continuity of growing demand and seeks to diversify its grain suppliers in the same African territory?
The issue adds to crises distancing Lula from the agribusiness sector.
Among them is the distribution of strategic positions to the Landless Movement and the lenient way the government has been treating the invasions, boundaries of indigenous lands that threaten producers, and the pressure to withdraw support from state companies to the sector, as happened with Agrishow.
Lula stated in January that Brazil owes its culture to Africa and believes that “this debt can be paid with science and technology”.
This task will be the responsibility of the future president of Embrapa, Silvia Massruhá, starting in May when she takes office.
The government has not yet defined which nations to target with Embrapa’s technology.
But the initial attempts are expected to be directed at Mozambique and Angola, where Lula should travel soon. Another potential target is Ghana, on the west coast of the continent.
Embrapa completed 50 years last week.
The current president of the state-owned company, Celso Moretti, is leaving. He was appointed in former president Jair Bolsonaro’s (PL) government by then-minister of Agriculture Tereza Cristina at the end of 2019.
The replacement follows governance procedures created in adaptation to the dictates of the State Law.
Before this change, the Minister of Agriculture, Carlos Fávaro, had already met in Brasilia on April 5 with the Minister of Foreign Affairs of Angola, Téte António, to discuss cooperation in favor of agricultural activity in the African country.
Fávaro said that Embrapa’s contribution would include technologies and advice to design public policies.
Experts heard by Gazeta do Povo evaluate that China’s strategy to reduce dependence on its largest suppliers of soybeans – Brazil and the United States – should indeed put the African savannah to compete with the Brazilian cerrado.
The Chinese effort occurs in a general scenario in which the country tries to become self-sufficient in grain production.
It is a strategy of preparation in case of an eventual armed conflict against the United States over the island of Taiwan.
But analysts also ponder that this process creates opportunities for large Brazilian agribusiness companies in Africa.
LULA BASES ACTION ON IDEOLOGICAL MOTIVATION, BUT THE IDEA CAN GENERATE NEW BUSINESS
Lula’s emphasis on recognizing Brazil’s “humanitarian obligation” towards Africa is part of the Workers’ Party (PT) diplomacy focused on the progress of emerging countries.
“But this speech by the president and the agricultural sector for fighting hunger opens, on the other hand, pragmatic ways to contemplate the interests of Brazilian companies that are set up in Africa.”
“It is important to emphasize that technology transfer involves long-term contracts and commercial counterparts between participating countries and the private sector,” emphasizes Gustavo Bernard, senior analyst at Dominium Consultoria.
In this sense, the Ministry of Agriculture wants to review the performance model of Embrapa and redesign the National Agricultural Research System (SNPA), formed by Embrapa, other state research organizations, universities, and institutes, aiming to improve connections between national technology creation and its private use.
As part of the Brazilian government’s More Food International Program (PMAI), Lula’s first terms in office implemented an agricultural development project in Mozambique, financed by the governments of Brazil and Japan, as a showcase of Brazilian foreign policy in Africa.
The Cooperation Program for the Agricultural Development of the Savannas (Prosavanas) was executed along the lines of the successful Brazil-Japan partnership from the 1970s to develop the Cerrado.
With it, including the creation of Embrapa, over five decades, the country went from being a food importer to becoming one of the exponents of global agribusiness.
Through agreements implemented from 2009 to 2013, the Brazilian Cooperation Agency (ABC) also provided technical assistance to Benin, Burkina Faso, Mali, and Chad to sophisticate cotton production.
Embrapa was designated as the support agency, and the project involved agricultural research organizations from the beneficiary governments.
In the chapter on sugarcane ethanol, Lula advocated the inclusion of Africa to secure volumes for the biofuels market.
In 2010, at the end of his second term, Lula issued a provisional measure, approved without changes the following year, the first of former President Dilma Rousseff’s (PT) administration, to allow the government to open Embrapa offices abroad.
The goal was to give the state-owned company flexibility to supply technologies to countries with which Brazil had made agreements.
An example was the memorandum signed with Ghana in 2006 to open a local Embrapa office in the African country, which did not occur due to legal limitations.
TECHNOLOGY TRANSFER CREATES RISKS FOR BRAZILIAN COMPETITIVENESS
Opening company branches outside the country was an important part of the foreign policy of the PT governments.
Before the approved provisional measure, Embrapa created virtual laboratories (Labex) focused on advanced research in Europe and the United States.
In parallel, the state-owned company also maintained partnerships with African laboratories to transfer technology.
At the time, Senator Edison Lobão Filho (MDB-MA), then rapporteur in the Senate of the provisional measure, which became Law 12,383 in March 2011, warned of “risks involved in the transfer of knowledge that is fundamental to national competitiveness.”
These risks may come from the long-term displacement to Africa of the soybean supply axis to China, currently concentrated in the United States and Brazil, in similar volumes for each.
A reminder of this was the soybean purchase agreement between China and Tanzania, signed in October 2020.
About 70% of the 130 million tonnes of annual soybeans harvested in Brazil are exported to China, while Tanzania exports 6 million.
Although the volumes indicate little change, it is the advance in the diversification of agricultural partners by the Chinese within a strategy to reduce dependence on major suppliers.
Since 2000, China has signed dozens of agreements under the Forum on China-Africa Cooperation (FOCAC) to strengthen trade relations, especially involving soybeans and other grains, via billion-dollar investments.
Tanzania was the last African country without an agricultural treaty with China.
THE AGRICULTURAL MACHINERY AND IMPLEMENTS INDUSTRY MAY BENEFIT
During Bolsonaro’s government, Embrapa presented technologies in tropical agriculture to ambassadors from 32 African countries in an event promoted by Itamaraty in October 2021.
The meeting proposed cooperation to disseminate the Brazilian model in that continent.
The then-minister of Agriculture, Tereza Cristina, pointed out at the time that Brazil’s technologies could indeed boost African production systems.
And one of the biggest stakeholders in this initiative is the Brazilian industry of agricultural machinery and implements, in addition to exporters of various agricultural genres.
Researchers have dedicated themselves to answering whether Africa could become a competitor of Brazil in soybean exports, considering the profile of the African continent and the chance that Embrapa’s technology could be used in its production.
Although soybean production in Africa is insufficient to supply even its demand, the continent has a large area with climate and soil characteristics similar to those of the Cerrado.
This could allow the region to become a major producer through tropical agriculture technology, of which Brazil is a leader.
But before that, specialists point out that the countries in the region would need to solve environmental, social, and political conflict issues to boost soybean production.
Meanwhile, there are areas in Brazil itself capable of being integrated into production.
Differently from Europe and the United States, which no longer have room to expand agricultural borders, the country also has the largest freshwater reserve in the world, with 15% of the total, which signals the capacity to increase the irrigated area.
The projections for global agribusiness are favorable because of the prospects for a global population increase.
The Brazilian Cerrado and the African Savanna have physical space to expand food production.
During the Minister of Agriculture’s visit to China two weeks ago, he sought to attract investment in recovering and planting degraded areas for agriculture.
The Chinese company Cofco International has already shown interest and will send a mission to Brasília next month to start negotiations.
The operation model is still being evaluated, and one possibility is to involve the National Bank for Economic and Social Development (BNDES).
Larissa Wachholz, director of Vallya Agro, which is dedicated to attracting Chinese capital to Brazilian agribusiness, believes that Brazil’s investment in the African potential to export grains brings more opportunities than risks.
The essential thing is the country’s pragmatic and well-calculated participation in the spaces that will be opened over the next 15 years.
“It is better not to be absent from this process that is going to happen anyway, being towed along by others,” she said.
She recalls that China has also been achieving advances as a large agricultural producer, with significant productivity gains of up to 4% per year.
“It is natural that the second largest economy and largest population on the planet, about 20% of the total, but with only 8% of arable land and 5% of water resources, is concerned about diversifying its food suppliers.”
“This is a path with no return, especially after the disruptions suffered by international trade due to the pandemic, the trade conflict between China and the United States, and the war in Ukraine, which also impacted the supply of fertilizers,” she explained.
For this reason, the specialist – who has followed the transactions between Brazil and China closely for 15 years and advised the former Minister of Agriculture and current Senator Tereza Cristina (PP-MS) – believes that Africa should become a grain producer but still has to overcome land difficulties and lack of technical and administrative knowledge.
In this last point, Brazil can profit by helping in the African qualification.
“I find Brazil’s strategic positioning interesting because Asia as a whole has, in its trajectory of accelerated economic growth with the rise of the middle classes, the propensity to increase its consumption of animal protein, which demands larger volumes of soybean and corn for its production.”
“This is a great opportunity, and Brazil should establish itself as a vanguard leader in this process”, she observed.
Other specialists evaluate that Brazil needs to invest in more trade agreements with other countries to dispose of surpluses and, thus, avoid a probable scenario in which China reduces the purchase pace of Brazilian soybeans.
Another option would be to redirect the soybeans to feed the national meat herd, a growing item on the export agenda with four to ten times more added value per tonne than soybeans.
RUSSIAN AND CHINESE INVESTMENT IN THE AFRICAN CONTINENT
China and Russia – Brazil’s partners in the BRICS economic group, including India and South Africa – are increasingly competing for political and commercial influence in Africa as the West reduces its presence in the continent.
China, in particular, has been investing heavily in Africa, including infrastructure projects and economic cooperation.
Meanwhile, Russia seeks to reactivate its historical relationship with former Soviet allies on the continent, such as Angola and Mozambique.
The two countries have increasingly close relations despite competing for the same markets.
In the most recent consolidated data, Africa-China trade jumped 35% in 2021 to a record US$254 billion, while Africa-Russia trade was US$18.5 billion in the same year.
In a recent article for Gazeta do Povo, Congressman Luiz Philippe de Orleans e Bragança (PL-SP) classified as new colonialism the Chinese onslaught on developing countries through ambitious investment plans in infrastructure works, especially from the New Silk Road.
“Many countries in Asia and Africa that signed this agreement effectively became colonies of China by failing to honor the terms of payments.”
“It is reasonable to estimate that Brazil runs the same risk,” he opined.
The New Silk Road has 145 countries, of which 44 are in Africa, 42 in Asia, 29 in Europe, 20 in Latin America and the Caribbean, and 10 in Oceania.
However, the initiative declined after causing tremors in the Chinese economy and corruption scandals worldwide.
Chinese companies have aggressively bought land in various parts of the world, especially in Africa.
According to Land Matrix, a European organization for agricultural monitoring, from 2011 to 2020, the Chinese will acquire 6.5 million hectares for agriculture, forestry, and mining.
This process of conquering territories also involves loans to countries granted by Chinese banks.
Analysts fear the advance of the Asian giant’s control over food sources and natural resources and advocate legal restrictions to prevent these investments.
With information from Gazeta do Povo