Facebook
Twitter
YouTube
Linkedin
800-622-7628
02

Brazilian Farm Life 08-02-19: Deforestation in Brazil

posted on
Brazilian Farm Life 08-02-19: Deforestation in Brazil

The New York Time’s article on deforestation and the new Brazilian government has reignited old controversies. We’ve all seen pictures like the one in the article. It is not hard to find people with very strong opinions on this subject. Have you ever wondered how Brazilian farmers feel about this?


Deforestation and agriculture are sensitive subjects in Brazil. This topic is like a family feud that the whole world feels entitled to weigh in on. On the one hand are environmentalists who believe all deforestation is bad. On the other hand, are farmers who want to use their land. Before jumping in to farmer sentiment, it is important to understand a bit about history and law in Brazil.


Fifty years ago, Brazil was not the global force in row crop production that it is today. In the 1970s, the military government in Brazil was concerned about losing possession of their vast cerrado lands, so they offered tax exemption options to people willing to invest in possession of areas like Mato Grosso. Deforestation was one of the criteria for showing possession. In hind sight, the ability to buy and clear cerrado land with tax exempt money may have been one of the best economic investments of the last 50 years. However, it also had environmental repercussions. As the economics of row crop production pushed expansion in this area, deforestation became a global concern.


Over the decades, the pendulum has swung strongly in the opposite direction. Currently, a property in the rainforest must preserve 80% of its land, and a property in the cerrado (smaller, less dense trees) must preserve 50%. Licensing to get permission to use land is a bureaucratic nightmare. It typically takes 6-18 months to get licenses. Fines for clearing unlicensed land are abusive, and sometimes farmers are fined even when they have licenses.


Generally speaking, farmers have come to accept that they cannot clear acres designated by law as reserve. When they buy a farm, they include reserve acres as part of the cost of land. To be certain, every country has some bad apples. Some Brazilian farmers break the law, just like some American farmers do, but most farmers are concerned with best practices.


One Brazilian farmer was brought to tears when he picked his daughter up from school and she asked him why he was a bad guy. He was distraught to learn that the school had taught her that farmers who clear land to raise crops are bad guys. Picture how a farmer in Brazil feels. He works hard to get the paperwork needed to legally use the land he is entitled to. Then he works hard to farm it. His enterprise along with that of thousands of other farmers supports ¼ of the national economy. At the end of the day, the reward he gets for his efforts, is to pick his daughter up from school (that he pays for) and be seen as a bad guy through her eyes.


It has been a long time since farmers in Brazil have felt like they had a president with their best interest in mind. Jair Bolsonaro was elected President of Brazil in October 2018. He ran as an outsider and a supporter of family values. Bolsonaro says that the Brazilian rainforest belongs to Brazil. He argues that whatever can be legally cleared should be cleared and this land should be used to boost the national economy. Furthermore, bureaucratic hassles should be minimized to streamline the licensing process and reward legal operators. Brazilian farmers appreciate this attitude and his concern for their plight. But the New York Times did not tell this side of the story.

Categories: | Tags: | Comments: (0) | View Count: (764) | Return

Post a Comment

 
Quotes are delayed at least 10-minutes. Market Data provided by Barchart.com
These data and comments are provided for information purposes only and are not intended to be used for specific trading strategies. This commentary is written as a daily marketing tool to help farmers sell the grain they raise. Although all information is believed to be reliable, we cannot guarantee its accuracy or completeness. Past performance and testimonials are not necessarily indicative of future results. Commodity trading involves the risk of loss, and you should fully understand those risks before trading. This material should be construed as market commentary, merely observing economic, political and/or market conditions, and not intended to refer to any particular trading strategy, promotional element or quality of service provided by Roach Ag. Marketing, Ltd. Roach Ag. Marketing Ltd. is not responsible for any redistribution of this material by third parties, or any trading decisions taken by persons not intended to view this material. These materials do not necessarily reflect the viewpoints and trading strategies employed by Roach Ag Marketing, Ltd. All forecasts of market conditions are inherently subjective and speculative, and actual results and subsequent forecasts may vary significantly from these forecasts.