Brazil, Overview 2023 agricultural sector
Below some key developments in Brazilian agriculture
The agricultural sector in Brazil reached several records in 2023. Despite lower prices and higher costs for inputs than in previous years the production of especially grains (cereals, legumes and oilseeds) increased by over 16 percent (323,8 million tons).
With continued high international demand, exports of grains grew by almost 25 percent (compensating for Argentinian lower production and opening up new markets in as much as 39 new countries). The agribusiness now accounts for almost half of Brazilian exports, thus contributing substantially to the overall trade surplus in 2023. Next to continued demand and technological advances, favorable weather conditions in the major regions contributed to the high yields. With El Niño and the Mato Grosso drought at the end of 2023 the production forecasts for the coming year are more uncertain but still over the last years’ average.
Dairy sector
At the same time other sectors struggled. The dairy sector saw demand fall (as was the case in 2022) and supply from Argentina and Uruguay to Brazil continuing to come into the market, with lower domestic prices as a results. Especially small farmers suffered. The sector lobbied for government interventions which led among others to additional tariffs on cheeses from Europe. Also tax measures were introduced for fresh milk. Neither measures are very effective as they don’t address the current low competitiveness of the sector (due to scale and low technology adoption).
EUDR
The EUDR was and will remain an important topic for debate between Brazil and Europe in the past and coming year. Subsequent to the political discussion, talks on the technical preparations are taking shape. One initiative of MAPA is the AgroBrasil+Sustentável. Both the delegation and several EU members are actively engaged to facilitate the discussion on implementation (i.e. through the Amsterdam Declarations Partnership).
Despite a critical sector and agricultural parliamentary caucus the agenda on sustainable development of the Lula government found its way into new policies in the Brazilian Ministry of Agriculture and Livestock (MAPA). The agricultural plan 2023/2024 outlines the priorities of the government for the coming years focusing on sustainability, productivity, competitiveness and food security. In addition MAPA came out with an ambitious plan to restore 40 million hectares of degraded pastures in 10-15 years, with the goal to avoid the necessity of expanding land use, enabling the country to produce more food within the existing areas. Lastly the most important agricultural finance instrument, the Plano Safra of 2023 has more focus on sustainable practices, CAR compliance and technology adoption. The percentages of the total budget are still limited so there is room for further improvement in the years ahead.
Food security
The 2023 State of Food Security and Nutrition in the World Report (SOFI) signaled the continued challenge for Brazil in the field of food security following the impact of Covid on the years of progress in this field. 4,7 percent of Brazilians are undernourished, 10 percent face severe food insecurity and 23 percent face moderate food insecurity. The renewed attention and policies of the Lula government should reverse these statistics in the years ahead.
2024
For 2024 the record harvests of the past year are not expected to be repeated. A main cause of uncertainty is the return of El Niño which will impact rainfall in the major agricultural areas in Brazil. Brazil has put food security high on the G20 agenda which will generate momentum and support for the Brazilian efforts in this area. And with the COP30 in Belém, Pará, the sustainability of agricultural growth will remain under international scrutiny strengthening the commitment to stop deforestation.