Brazil’s $10 Billion Partnership | Brazilian-Russian Agricultural Trade Flow Agreement
A recent announcement from the Brazilian Ministry of Agriculture, Livestock and Food Supply (MAPA), has confirmed that “Brazil and Russia are working to bring bilateral agricultural trade flows from US$ 5 billion to US$ 10 billion over the next five years”. The Brazilian Government is focusing on dairy and meat (poultry, pork and beef) as core trade resources with its fellow BRICS country.
This is not simply an exporting deal, however, as Russia are keen to expand their own exports of agricultural products back to Brazil, with a special focus on fish. Brazil has already approved three Russian establishments for imports, with Russia pushing to raise this figure to 108 accredited fish suppliers.
Outside of agriculture;
Brazil has also been developing its links with Spain, recently signing five cooperation acts covering four key areas: diplomacy, economic cooperation, trade cooperation and transport infrastructure. Trade flows between the two countries totalled upwards of $5 billion in 2016, with Spain having already injected a further $819.4 million into the Brazilian economy this year.
Further positive news for Brazil has also come with recent announcements made by the U.S. Government over the future of NAFTA. In 2016, it is reported that “Mexico imported US$17.9 billion in American agricultural products: US$2.6 billion in corn, US$1.5 billion in soybeans, US$1.3 billion in pork and US$1.2 billion in dairy products.”
In line with the doubt cast over NAFTA’s future, Brazil have sensed a long-term opportunity for development with Blairo Maggi, Brazil’s Agriculture Minisiter, stating that the country is “back in the game.” Brazil is a major exporter of prized US products such as beef, wheat and soybean; food-stuffs that Mexico currently relies heavily on imports for. There is therefore a huge opportunity for Brazilian agriculture to further develop into a large market.
What is clear from the recent examples highlighted above is that imports and exports are critical for defining the growth and stability of the Brazilian Agricultural sector, and related economy. Over the last twenty years, Brazil has experienced substantial growth in both agriculture and food processing, helping it to secure its position in global trade. The OECD reports that Brazil is currently “the world’s second largest agricultural exporter and the largest of all exporters of agri-food to the European Union.” It goes on to state that “Brazil is poised to become the foremost supplier in meeting additional global demand.”
Despite the examples and quotes highlighted above, the country’s Agricultural sector and economy still faces a number of serious challenges moving forward. Official data released by the Brazilian Government in March confirmed that the country is still in the grips of the longest and deepest recession in its history. Although the agricultural sector has remained relatively stable during this period, it has not experienced anywhere near the annual growth rate previously achieved of 5% (2003-2012).
Predictions expect a modest economic and agricultural sector rebound in 2017, with a greater role for BRICS states on the global market in general. Although this in itself is a good sign, there are a number of challenges and issues that need to be addressed for these growth rates to be achievable and sustainable for Brazil. Key questions remain for Brazilian Agriculture over infrastructure deficiencies, finance / subsidy access, tariffs, diminishing labour forces, and access to reliable energy sources for farms. These issues are holistic, covering economic, social and environmental variables in local, national and international contexts.
Imports and exports are critical for defining the growth and stability of the Brazilian Agricultural sector and related economy ”
To tackle these issues, and many more affecting Brazilian agriculture, Challenge advisory have developed the Sustainable Intensification series, in partnership with the Brazilian Government. These summits are designed to explore the key themes and issues affecting Brazilian agriculture, and examine and present relevant solutions to these challenges. Topics of discussion include: Labour shortages, IOT, traceability in the supply chain and low carbon technologies.
Now in its second year, we are currently in the process of developing Sustainable Intensification 2017, with key stakeholders such as Embrapa, MAPA, CEBDS and WBCSD. To find out more about the event, and the challenges that will be tackled at this year’s summit, follow the link below, or email us at email@example.com