Page 50 - InvestmentGuideBrasilEng

EMBRAPA: THE BRAZILIAN NEW INFRASTRUCTURE BRAZIL’S FARMING MODEL 150 kilometers of Brazil’s national territorial
? Where the rural property is located within
AGRICULTURAL RESEARCH INVESTMENT WILL FURTHER Farming in Brazil is immensely diversified, ranging borders, which are called border areas, the
foreign investor also needs to apply to INCRA,
CORPORATION SUPPORT AGRICULTURE from family small holdings to huge commercial ru- which will submit an application to the National
Defense Council for a decision on whether
ral estates. The actual area of farms varies deeply
depending on the region they are located. A con- the sale or rental is to be authorized, before
Advances in farming techniques and technolo- New transportation and logistics infrastructure siderable part of Brazilian agribusiness is organized being sent to INCRA for a final decision.
gy have been pioneered by the Brazilian Agricul- networks currently being built under federal into cooperatives, mainly in the south region. Fam-
tural Research Corporation (EMBRAPA), whose investment programs such as the Accelerated ily farming also plays a strategic role, producing ? A non-Brazilian national cannot purchase
research is responsible for the internationally Growth Program and the Logistics Investment almost half of the corn crop and over a third of the land in excess of 50 MEIs (i.e. between 250 to
renowned opening of Brazil’s Midwestern cerra- Program will further drive growth in new agri- coffee crop consumed in Brazil each year. However, 5,000 hectares depending on the locality).
do region to farming soybean, cotton, corn and cultural regions by enabling producers to effi- large international groups such as ADM, Agrium, In the case of foreign entities, this cap is
other crops. Today, EMBRAPA is on course to re- ciently transport their crops to consumer centers Bunge, Cargill, Louis Dreyfus and Syngenta have es- 100 MEI (from 500 to 10,000 hectares).
peat its success by opening up a new agricultural in Brazil and to ports for export to international tablished strong operations in Brazil. Irrespective of these two caps, the law stipulates
frontier in a region called MATOPIBA, which is the markets. Brazil’s main export markets for agricul- that no more than 25% of a municipality’s
name given to new agricultural production in the tural products are the European Union, China, the territory can be under foreign ownership.
states of Maranhao, Piaui, Tocantins and Bahia. United States, Russia and Japan. INVESTMENT IN RURAL
EMBRAPA is a public company whose mission As a result of innovation and excellent grow-
is to provide feasible solutions for the sustainable ing conditions, farming in Brazil does not depend REAL ESTATE COMMITMENT
development of Brazilian agribusiness. Since its on government subsidies to be competitive. Ac-
creation in 1973, EMBRAPA has supported the cording to the OECD-FAO Agricultural Outlook TO SUSTAINABLE
creation of over 9,000 technological products for 2010-2019, “Brazil is the fastest growing agri- In order to ensure the effective administration of ru-
for use in Brazilian agriculture. From its national cultural sector by far, growing by over 40% up to ral areas and regional development policies, there
headquarters in Brasilia, EMBRAPA operates a 2019, when compared to the 2007-09 base peri- are certain restrictions on the size and nature of real AGRICULTURAL
countrywide network of 47 research centers and od.” Brazil is already the top global supplier for a estate that foreign investors can purchase or rent. It
participates in cooperation activities with a wide wide range of agricultural commodities, includ- is important to note that Brazil’s Constitution does DEVELOPMENT
range of international partners. ing beef, orange juice, soybeans, sugar, tobacco, not prohibit the acquisition or leasehold of rural real
www.embrapa.br/english coffee, ethanol, poultry and cellulose, despite the estate by non-Brazilian nationals. What is unique about Brazil’s agricultural devel-
fact that approximately 70% of production is tar- The main restrictions on rural real estate ac- opment is that it is compatible with sustainable
geted at the domestic consumer market. quisition and rental by non-Brazilian nationals development and environmental conservation.
and foreign entities are: The Government of Brazil is committed to sus-
BRAZIL’S GLOBAL PRODUCT PRODUCTION GLOBAL EXPORTS GLOBAL tainable economic development, with special
AGRICULTURAL DOMINANCE SHARE SHARE ? Where the rural property in question is attention being paid to illegal deforestation. As a
IN KEY PRODUCTS (2012/13) Soybeans 82 million tons 31% 38.4 million tons 39% greater than 3 MEIs (Modulo de Exploracao result of government action to preserve the Ama-
Indefinida), a unit of measurement that varies
zon Rainforest, in 2009 Brazil recorded the lowest
in size depending on its location in Brazil and rate of deforestation in the past 20 years. The Bra-
Corn 71 million tons 8% 17.5 million tons 19%
ranges from 5 to 100 hectares, the foreign zilian Forestry Code, which consolidates relevant
55.9 million 60 32.95 million 60 investor needs to apply to the National Institute federal legislation, is one of the most rigorous in
Coffee 38% 28%
kg bags kg bags for Rural Development and Land Reform the world. The Code was updated in 2012.
37.5 million (INCRA) for authorization. The authorizing Brazil has the lowest carbon emissions among
Sugar 28% 25 million tons 45%
tons document must be produced along with the world’s largest agricultural producers.
20.3 billion other required documentation in order to
Ethanol 24% 1.1 billion liters* 16% register ownership or leasehold of the land
liters*
13.005 million 3.582 million with the competent Land Registry Office.
Poultry 16% 36%
tons tons
9.375 million
Beef 16% 1.45 million tons 16%
tons
3.3 million
Pork 3% 645,000 tons 9%
tons
1.26 million
Orange juice 57% 1.23 million tons 82%
tons
* Refers to 2011/12 harvest.
Source: PwC Agribusiness Research & Knowledge Center.
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