Dec 05, 2014

Sao Paulo Ranked First in Brazil in Rural Business Environment

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The Brazilian Agriculture and Livestock Confederation (CAN) conducted an evaluation and ranking of all the Brazilian states as to their rural business environment. Each state was judged on what CAN calls the Agribusiness Competitive Index which is based on six criteria including: infrastructure, education, health, macroeconomic environment, innovation, and workforce.

The top three rated states in the recently released study were Sao Paulo, Santa Catarina, and the Federal District. On a scale of 0 to 1, the state of Sao Paulo came out on top with a rating of 0.752. The state was strong in all categories and especially strong in infrastructure with some of the best roads in Brazil as well as Latin America's largest port at Santos. The state is the leading producer of sugarcane and oranges as well as one of the top producers of cattle, grain, oilseeds, fruits and vegetables.

Second place went to the state of Santa Catarina in southern Brazil with a score of 0.611. The infrastructure in the state was rated very high due to the four ports located within the state. The state also came in first in education due to its rural schools and rural education. The state is a leading producer of hogs and poultry.

Third place went to the Federal District where the capital Brasilia is located with a rating of 0.608. The Federal District was a leader in innovation and health with intermediate ratings in infrastructure, education, and macroeconomic environment.

The state of Mato Grosso is Brazil's largest producer of soybeans and corn, but it came in only in tenth place with a rating of 0.425. The state came in first in agricultural productivity and second in macroeconomic environment, but its ranking was dragged down by its poor infrastructure. Its inland location makes the state highly dependent on primarily highways in getting its agricultural products to distant ports. Even within the state many of its roads are not paved making travel very difficult especially during the rainy season.

CAN cited the study as an important tool in the formation of public policy. Each state's advantages and challenges needs to be recognized before appropriate policies can be formulated to improve a state's agricultural competitiveness.

The study also looked at the quality of rural life by analyzing such factors as: home construction, access to public services such as water, electrical energy, sewers, trash collection, as well as twelve essentials such as telephone, stoves, refrigerators, clean water, etc. The top three states in rural life were also Sao Paulo, Santa Catarina, and the Federal District with the lowest ranking going to three states in the Amazon Region – Amazonas, Acre, and Amapa.