FEBRUARY 27 th DE 2021.

By Fernanda Buharb – Business Developer_ Brazil Asset Brokers

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The President of France, Emmanuel Macron, continues his campaign to impose sanctions on Brazilian agricultural products using fictitious arguments as always, the most worrying is that in this case the repeated lie often begins to sound true. These are isolated events that everyone involved in Brazilian agribusiness condemns and demands the application of the law with all its rigor, but specially in this case the Brazilian agribusiness chain is succeeding for the investment in technological and science during years ago. The scientific advances and awareness of producers that have managed to achieve a technology cutting edge, obtaining greater productivity without having to increase the area of ​​crops. What began with a criticism of soy production in deforested areas in Brazil may now extend to other products. However, this argument that “buying from Brazil is the same than endorse deforestation”, is not true and unfair. Macron is still using Amazon to sensible the world and taking advantage of the lack of knowledge of someone else. This false argument based on political and economic interests can affect Brazilian agribusiness and Brazil needs to have a clear and well-defined strategy of how not lose market and credibility conquered through a hard work or it will have your commodity traded at an unfair price.

 

Currently, the Brazilian cerrado region produces 50% of the grains. Brazil is the world's largest exporter of coffee, sugar, orange juice, ethanol, beef, chicken and soy at the expense of technological advances, a cultivation system that makes agriculture and the environment move forward together and not as empty arguments and without support that insist on claiming the cost of deforestation.

 

To affirm that the Brazilian super-harvest is the result of planting in deforested areas is even an old and criminal market strategy. As well as sensitizing the world to justify trade sanctions, echoing the fact that the consumption of Brazilian agricultural products endorses deforestation, based on untrue information to obtain political and commercial advantages can be  at least unfair not only for the Brazilian economy but also a disservice to the society. Although, we know that the information is unfounded, this is something that the Brazilian government needs to be concerned about, as such untrue information has been gaining strength in the foreign market. Brazil needs to consolidate itself with diplomacy and intelligence, because the cards are on the table and everyone has no need to repeat what we all know already how Brazilian agribusiness value the earnestness of agribusiness services.

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Brazil produces 350 products for 180 countries, not because of deforestation, but because it has become a great partner of the environment. Having the largest commercial herd of cattle in the world, more than 200 million animals. It is a major producer of pigs, poultry, eggs and milk, so we can understand the discomfort of many external competitors. What worries me most is having the doubt whether we are really prepared for this moment, which one the Brazilian government should already know that it would face, the moment of sanctions that they want to apply to Brazilian agribusiness for reasons that go beyond deforestation in the Amazon. What is the answer that Brazil will give to the world? Does Brazil is prepared to argue with self-respect without begging? Is Brazil aware about your importance and place in the agribusiness scenario worldwide?

 

We know that Brazil is the largest exporter of soybeans in the world, we also know that Brazil is the leader or is the vice-leader of many other products linked to the agribusiness chain. However, what need to be emphasized here is that Brazil's main competitor is Brazil itself when it comes to agribusiness, and it is for this reason that in some products Brazil does not appear in a leading position when it comes to exports, such as banana production that Brazil is the fourth largest producer in the world, but this product is all consumed domestically. To make it clearer, the Brazilian domestic market consumes most of what is produced within Brazil.

 

Last Week, the Ministry of Agriculture released a note denying that Brazilian soy is grown on deforested land and claiming that local production is sustainable in response to Macron's Twitter, where he said that "continuing to depend on Brazilian soy is endorse deforestation in the Amazon "and continued:" We are consistent with our ecological ambitions, we are struggling to produce soy in Europe? " and continued "when we import soybeans produced at a rapid rate from the destroyed forest in Brazil, we are not consistent" with European ecological ambitions.

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It is not enough to just say that the statement by the French President, Emmanuel Macron, on Brazilian soybeans shows complete ignorance about the cultivation process of the product imported by the French, the problem is the chaos that this generates in the sector, the problem is economic instability and commodity prices plummeting in the foreign market, the problem is that Brazil has constantly experienced the case of the Amazon that a repeated lie often becomes a 'truth'. The aim is to speculate and place the prices of Brazilian products below the market, as it is already known that EU industries will not reach the proposed global sustainability target for 2050.

 

Of four agribusiness products in circulation on the planet, one is Brazilian. 250 million tons of grains that Brazil produces today is the result of investment in science reflected in technological advances achieved and competence of the Brazilian farmer and not deforestation.

 

Currently, 12 million Brazilian farmers work with family farming. Family farming in Brazil is responsible for 1/3 of the agricultural GDP. In the forestry scenario, for those who know the agribusiness and environmental incentive policies in Brazil, they know exactly why Brazil occupies a leading position in agribusiness worldwide, being aware that the Ministry of Agriculture created and implemented new public and environmental policies with the in order to promote partnership with agribusiness entrepreneurs, which is reflected and justified the expansion of Brazil in the foreign market when it comes to agribusiness.

Half of the Brazilian land today is a green area, and I am talking about 512 million hectares of natural forests; 9.8 million forested hectares of planted forests, concluding, advances that allow biological nitrogen fixation in soybeans, that is, savings of 22 billion reais per year without polluting the environment.

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Focus on producing an increasingly healthy food in a sustainable way and meeting international requirements, Brazil stands out through the Integrated Pest Management system, which reduces the application of thousands of liters of pesticides throughout the year, which endorses a sustainable, safe, quality production that does not causes damages the environment. Another point worth mentioning is the Integration-Livestock-Crop-Forest System, where grains, meat, milk and wood are produced in the same area, resulting in more sustainability, more production and less CO2 emissions.

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On the other hand, Macron statement sounds so contracditory according to the LSE article (London School of Economics and Political Scence), Dr. Samuel Fanhauser, one of the medical researchers and deputy director of the Grantham Reseach Institute, explains about a carbon emission rate that the The United Kingdom is considering applying and he points out that as long as there is a European emission limit, everything the UK does unilaterally will only remove greenhouse gases and further stresses that the accounting may look good, but the reality is not, that is , if the EU does not cooperate, the expected results will not be achieved.

 

The euronews newspaper emphasizes the importance of the EU being more engaged and committed to reducing carbon emissions. The Euro News newspaper reports that European companies spent 124 billion euros in reducing their carbon footprint in 2019, but a report says that this is only half of what they would need to spend if the EU wants to reach its net zero carbon target by 2050 CDP, a UK-based organization specializing in environmental reporting, revealed in its latest report that Europe's largest 882 companies that have emissions equivalent to 75% of the EU total reported having invested only 12% of their capital expenditures in reduction of carbon emissions in 2019. Another important point to note is that in both matters they bring to the table all high-emission sectors, including materials, energy and transport, which boosted investments by 5%, 38% and 50% respectively. According to the CDP, more investments are needed in the materials sector, which brings together companies in the sectors of cement, chemistry, metals and mining and steel. These companies are responsible for 38% of the reported emissions of scopes 1 and 2 or of the direct and indirect emissions that the companies control.

While Brazil has a lot to contribute and improve, and it has clearly been working on these aspects, and motivating its businessmen to reduce carbon emissions, the agrarian sector is one of the main sectors that joined and achieved good results working as environment partners.

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In conclusion the main purpose of Macrom is in fact to create a speculation in the market causing the price of Brazilian commodities to fall in the global market. Because if it keep going in this way the EU will not reach its goal of contributing to carbon reduction by 2050.

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