Missing the Target: Brazil's Agricultural Policy Indirectly Subsidizes Foreign Investments to the Detriment of Smallholder Farmers and Local Agribusiness
Currently there is controversy about the effect of direct foreign investment in the Brazilian agricultural sector, mainly due to the impact it has on small farmers, land use, the environment, and food security. In this context, Brazil finds itself in an even more delicate situation, since in order t...
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| Format: | Article |
| Language: | English |
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Frontiers Media S.A.
2022-01-01
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| Series: | Frontiers in Sustainable Food Systems |
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| Online Access: | https://www.frontiersin.org/articles/10.3389/fsufs.2021.796845/full |
| _version_ | 1818754651342766080 |
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| author | Graciella Corcioli Gabriel da Silva Medina Cristiano Alencar Arrais |
| author_facet | Graciella Corcioli Gabriel da Silva Medina Cristiano Alencar Arrais |
| author_sort | Graciella Corcioli |
| collection | DOAJ |
| description | Currently there is controversy about the effect of direct foreign investment in the Brazilian agricultural sector, mainly due to the impact it has on small farmers, land use, the environment, and food security. In this context, Brazil finds itself in an even more delicate situation, since in order to remain a bulwark of the economy, Brazilian agribusiness depends heavily on public policies that directly impact its treasury. This suggests there is an indirect transfer of public resources to transnational companies involved in agribusiness production chains. This paper assesses the allocation of agricultural credits in Brazil and the market share held by Brazilian groups, vis-à-vis multinational corporations in the agribusiness supply chains. The study was carried out analyzing the three largest supply chains established in the country: soybean, corn, and cattle. Results reveal that 75% of the operating credit (crédito de custeio), which represents 60% of the total government credit in Brazil, goes directly to soybean, corn, and cattle farmers. Most of this subsidized credit budget goes to the soybean farmers, which are mostly encompassed by large farmers. Results also reveal that 76.1% of the soybean supply chain in Brazil is controlled by foreign multinational corporations. These findings suggest that resources invested in large farmers that take part in supply chains controlled by multinational foreign groups end up indirectly financing foreign companies to the detriment of local smallholder farmers and domestic agribusiness. This highlights the need for restructuring Brazilian agricultural policy in favor of family farmers and domestic agribusiness. |
| first_indexed | 2024-12-18T05:26:38Z |
| format | Article |
| id | doaj.art-c44a7e8508dc4e25889bca4b55091db6 |
| institution | Directory Open Access Journal |
| issn | 2571-581X |
| language | English |
| last_indexed | 2024-12-18T05:26:38Z |
| publishDate | 2022-01-01 |
| publisher | Frontiers Media S.A. |
| record_format | Article |
| series | Frontiers in Sustainable Food Systems |
| spelling | doaj.art-c44a7e8508dc4e25889bca4b55091db62022-12-21T21:19:31ZengFrontiers Media S.A.Frontiers in Sustainable Food Systems2571-581X2022-01-01510.3389/fsufs.2021.796845796845Missing the Target: Brazil's Agricultural Policy Indirectly Subsidizes Foreign Investments to the Detriment of Smallholder Farmers and Local AgribusinessGraciella Corcioli0Gabriel da Silva Medina1Cristiano Alencar Arrais2Faculty of Agronomy – Rural Development Sector, Universidade Federal de Goiás, Goiânia, BrazilFaculty of Agronomy and Veterinary Medicine, Universidade de Brasília, Brasília, BrazilFaculty of History, Universidade Federal de Goiás, Goiânia, BrazilCurrently there is controversy about the effect of direct foreign investment in the Brazilian agricultural sector, mainly due to the impact it has on small farmers, land use, the environment, and food security. In this context, Brazil finds itself in an even more delicate situation, since in order to remain a bulwark of the economy, Brazilian agribusiness depends heavily on public policies that directly impact its treasury. This suggests there is an indirect transfer of public resources to transnational companies involved in agribusiness production chains. This paper assesses the allocation of agricultural credits in Brazil and the market share held by Brazilian groups, vis-à-vis multinational corporations in the agribusiness supply chains. The study was carried out analyzing the three largest supply chains established in the country: soybean, corn, and cattle. Results reveal that 75% of the operating credit (crédito de custeio), which represents 60% of the total government credit in Brazil, goes directly to soybean, corn, and cattle farmers. Most of this subsidized credit budget goes to the soybean farmers, which are mostly encompassed by large farmers. Results also reveal that 76.1% of the soybean supply chain in Brazil is controlled by foreign multinational corporations. These findings suggest that resources invested in large farmers that take part in supply chains controlled by multinational foreign groups end up indirectly financing foreign companies to the detriment of local smallholder farmers and domestic agribusiness. This highlights the need for restructuring Brazilian agricultural policy in favor of family farmers and domestic agribusiness.https://www.frontiersin.org/articles/10.3389/fsufs.2021.796845/fullforeign direct investmentsagro-industrial crop productionagricultural policydomestic market shareagriculture supply chain |
| spellingShingle | Graciella Corcioli Gabriel da Silva Medina Cristiano Alencar Arrais Missing the Target: Brazil's Agricultural Policy Indirectly Subsidizes Foreign Investments to the Detriment of Smallholder Farmers and Local Agribusiness Frontiers in Sustainable Food Systems foreign direct investments agro-industrial crop production agricultural policy domestic market share agriculture supply chain |
| title | Missing the Target: Brazil's Agricultural Policy Indirectly Subsidizes Foreign Investments to the Detriment of Smallholder Farmers and Local Agribusiness |
| title_full | Missing the Target: Brazil's Agricultural Policy Indirectly Subsidizes Foreign Investments to the Detriment of Smallholder Farmers and Local Agribusiness |
| title_fullStr | Missing the Target: Brazil's Agricultural Policy Indirectly Subsidizes Foreign Investments to the Detriment of Smallholder Farmers and Local Agribusiness |
| title_full_unstemmed | Missing the Target: Brazil's Agricultural Policy Indirectly Subsidizes Foreign Investments to the Detriment of Smallholder Farmers and Local Agribusiness |
| title_short | Missing the Target: Brazil's Agricultural Policy Indirectly Subsidizes Foreign Investments to the Detriment of Smallholder Farmers and Local Agribusiness |
| title_sort | missing the target brazil s agricultural policy indirectly subsidizes foreign investments to the detriment of smallholder farmers and local agribusiness |
| topic | foreign direct investments agro-industrial crop production agricultural policy domestic market share agriculture supply chain |
| url | https://www.frontiersin.org/articles/10.3389/fsufs.2021.796845/full |
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