Jan 19, 2023

Brazil's Ag Minister to Emphasize Pasture Conversion to Row Crops

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

In recent interviews, Brazil's new Minister of Agriculture, Carlos Favaro, has expressed his intension to emphasize the conversion of degraded pastures to row crop production as a sustainable way to increase crop production in Brazil. His ideas will be incorporated into Brazil's 2023/24 Harvest Plan (Plano Safra 2023/24) due to take effect on July 1, 2023.

Brazil's Harvest Plan is an annual program that outlines the government's farm policies for the following year. The main component of the program are lower interest production loans for Brazilian farmers. The plan has numerous programs addressing crop production, capital investment, crop insurance, rural issues, etc. Generally, the more favorable loan terms are geared to the smaller producers.

In an interview with Reuters, Favaro indicated that Brazil has 150 million hectares of pastures (370 million acres) with 40 million of those hectares (99 million acres) being degraded pastures. These are poor-quality pastures that are low in fertility, eroded, and have a low carrying capacity.

He believes that some of these degraded pastures could be converted to row crop production as a sustainable way to increase Brazil's row crop acreage 5% per year for many years while decreasing the pressure to clear more land. Brazil currently has approximately 77 million hectares (190 million acres) in crop production.

This conversion could be encouraged in the 2022/23 Harvest Plan by using low interest subsidized production loans with favorable repayment terms.

President Lula and the Minister have expressed their desire to promote more sustainable, low carbon agriculture. Zero deforestation is the ultimate goal, but that is not possible because landowners are allowed to clear a percentage of the land under Brazil's Forestry Code, but they believe landowners should also be compensated if they decide not to clear some of their land.

Everyone wants to reduce greenhouse gas emissions and the quickest way to achieve that goal is to reduce deforestation, which is one of the largest sources of greenhouse gas emissions in Brazil.