Government decree will modernize Brazilian ports and infrastructure
Brazil’s President of the Republic, Michel Temer, has recently signed-off on new laws in relation to the operation and regulation of the country’s ports. It is hoped that reductions in red tape, as part of the new rules, will attract fresh investment in the sector, bringing “last century’s Brazil straight to the 21st century”1.
Mr. Temer said on the announcement that, “The expansion of contract terms provisioned for in the decree will help to attract new investment opportunities and create new jobs – two of our dearest goals. Currently, it may take up to three years to obtain a permission to install a new terminal. We expect the decree to reduce such time to 180 days” 2.
Although the Brazilian economy in still recovering from the worst recession it has experienced in recorded history, the country’s ports are forecasted to have a record breaking year in 2017. Brazil’s largest port complex, the Santos Port, has predicted it will move a record 120.6 million tons of cargo in 2017 3. In line with this, officials from CODESP estimate that exports and imports will increase by 8.2 and 1.3 percent respectively.
PORTS AND AGRICULTURE
A key driver of this expansion is the predicted growth within the country’s agriculture for 2017. Brazilian crops are expected to grow 21.8 percent in 2017, according to data released by the Brazilian Institute of Geography and Statistics 4. Of the twenty-six products surveyed, sixteen are expected to record increased yields, including caster bean, cocoa, soybeans, corn and rice. The majority of produce is expected to come from Southern and mid-west regions.
This rise in produce will put greater pressure on transport routes and infrastructure as producers look to get more crops onto national and international markets. Historically, Brazil has struggled with access to its ports, due to underdevelopment of cargo container terminals and related systems. This has caused a ‘bottle-neck’ effect on access and storage, delaying trade and generating unproductive periods for the sector. This has been heightened by poor supporting road and rail systems, adding time, cost, and difficulty to the movement of produce for farmers.
For agriculture then, this announcement may be a major opportunity for expansion and development of the sector into international markets. Data published by the Transport Ministry indicates that the port sector has already seen growth in 2017, with port movements increasing by 4.4 % in the first quarter, compared to 2016. Time will now tell, if the new legislation will bring in the desired investment and growth needed in the ports, to support agricultural growth and the development of Brazil more generally.
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