Dec 16, 2014

Brazil Corrects a Glaring Flaw in their Infrastructure Development

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

Brazil is aggressively perusing the construction of dozens of hydroelectric dams in the Amazon River Basin as a way to produce clean and affordable electricity for its developing economy. One glaring error in the legislation authorizing these hydroelectric dams was the omission of the construction of locks at the dams allowing the river to remain navigable around the dams. That omission is now being addressed with new legislation.

The Agriculture and Livestock Federation of Brazil (CAN) worked closely with the Brazilian Congress to draft legislation requiring that locks and other amenities that would make the river navigable for barge traffic be required with the construction of new dams as well as dams currently under construction. (As a side note, the President of CAN, Senator Katia Abreu, is scheduled to be the new Brazilian Minister of Agriculture.)

The locks and their operation would be publicly owned and maintained and the navigability of the rivers would be considered equally as important as electrical generation when new dams are being considered.

Only in recent years has there been a serious effort put forth to use barging operations in Brazil to move agricultural products to export facilities. These new efforts are the result of agricultural expansion into central Brazil and the southern Amazon Region. The new agriculture production is closer to the Amazon River and its tributaries and even further away from the major Brazilian ports in southern Brazil. The high costs of moving grain to export markets is a major concern for Brazilian farmers and they have been pressuring the Brazilian government to do more in the way of promoting barging as a way to reduce those costs.

Barging operations in southern Brazil was never feasible because few rivers in southern Brazil run to the Atlantic Coast. The Atlantic Coast Mountain Range, which parallels the southern coast of Brazil, forces most of the rivers in southern Brazil to run west (away from the coast) toward the Parana River which eventually empties into the Atlantic Ocean at Buenos Aires.

A good example of this westward sloping topography is the city of Sao Paulo which is only about 50 miles from the Atlantic Ocean. The rainfall which falls on this largest city in South America runs west (away from the coast) and travels over 3,000 kilometers before reaching the Atlantic Ocean at the city of Buenos Aires. On the approach to the international airport in Sao Paulo, you can see the Atlantic Ocean, yet the runoff from that very airport must travel through half the South American continent before reaching the ocean!