1
AN APPROACH TO BRAZILIAN
AGRIBUSINESS1
Prof. Dr. Samuel Ribeiro Giordano2
structured in Brazil. In order to do this, some data about the country
will b
-food
1
Based on a paper also prepared by author and by Neves, M. ; Zylbersztajn, D. ;
Spers, E. the for presentation at the “VII IAMA International Congress”, in
Jakarta, Indonesia, 1997.
2
Professor Samuel Ribeiro Giordano is Executive Courses Coordinator of PENSA,
The Agribusiness Program of the University of São Paulo. PhD in Regional and
Economic Geography by the University of São Paulo, Post-Graduated in Business
Administration by Fundação Getúlio Vargas and Graduated in Agricultural
Engineering by Escola Superior de Agricultura Luis de Queirós - USP.
He is a LEAD FELLOW from the 2nd COHORT-Brazil.
Email: [email protected]
An approach to Brazilian Agribusiness- Dr. Samuel Ribeiro Giordano- Specially prepared for
LEAD International Session in Brasil-Y2K
2
1. GENERAL INFORMATION ABOUT BRAZIL
Brazil is the fifth biggest country in the world with an area of 8.5 million square
kilometers and a continuous coastline of more than 7.500 kilometers on the Atlantic. The
population is around 163 million inhabitants, concentrated mainly in the southeastern
region. The population growth rate has been declining over the last years, to a rate of
1.6% / year for 1995 (IBGE - Brazilian Institute of Geography and Statistics). Table 01
shows some general indicators concerning Brazil.
Table 01 - General Indicators Concerning Brazil
Gross Domestic Product 1998
US$ 917 billion
Estimated Population 1998
163 million
Value of Agricultural Production 1998
US$ 35.28 billion
Global Exports 1998
US$ 51,5 billion
Global Imports 1998
US$ 57.8 billion
Sources: Brazilian Institute of Statistics and Geography-IBGE, Brazilian Central
Bank
On the institutional and economic levels, Brazil has been going through a stabilization
process since 1994, which dropped the inflation rates from 40% per month in 1994 to 8
% for 1999. The GDP is expected to grow between 1 % and 1,5 % in 2.000. There is
also political stability and a solid democracy. Projections show an expected per capita
income of US$ 5.700 in 2001. The average domestic income grew 38% in three years
(1992 to 1995). Within four years Brazil, Korea and China will be the emergent countries
with the double of the population with more than US$ 10,000/year of income (Ernst &
Young, in Exame, April 1997). Table 02 shows the expected growth of GDP:
An approach to Brazilian Agribusiness- Dr. Samuel Ribeiro Giordano- Specially prepared for
LEAD International Session in Brasil-Y2K
3
Table 02 - Brazilian Gross Domestic Product( in US$ billion). For 2001:
projections
1993
436.5
1994
564.8
1995
717.2
1996
779.7
1997
870
1999
917
2001
1000.6
Source: IBGE and Macrométrica
Agriculture
Brazil has importance and potential in the world’s agri-food business. The country has
547 million ha of plowable lands of the total 850 million ha. That is almost 70% of arable
land (the second highest percentage is in Europe, with 44%). Almost 19% of world’s
arable land is in Brazil (FAO/ONU), but the country is using just 10% of this area,
which is more than enough to produce three times as much grain as is produced today,
according to the graphics below.
There is a clear trend in productivity gains in Brazilian Agribusiness system mainly due
to technological improvements at the field level. The genetics play a very important role
in this process, as seen in the graphic to follow.
The size of the Brazilian Agribusiness is around 38,5 % of its GDP, around US$345
billio n. This sector is responsible for 40% of the export income, considering not only the
commodit ies but also the industrialized products, originated in the Agribusiness System.
In terms o f jo bs the whole Agribusiness system absorbs around 21 millio n people,
meaning 40% of the economically active populat ion.
The productivit y enhanced substant ially since 1992. In 1999 the Brazilian grain harvest
surpassed 85 millio n tons . This performance was based upon the new paradigms such as
classic techno logy and classic genet ics, precisio n agriculture in so me crops and some
limited regions.
An approach to Brazilian Agribusiness- Dr. Samuel Ribeiro Giordano- Specially prepared for
LEAD International Session in Brasil-Y2K
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GRAPHIC 1 AVERAGE PRODUCTIVITY GROTH OF SOY BEAN IN BRAZIL
35.000
30.000
25.000
20.000
15.000
10.000
5.000
9
19 7
98
*
96
19
95
19
94
19
93
19
92
19
91
19
90
Area in Millions of ha
19
89
19
88
19
87
19
86
19
19
19
85
0
Production in Millions of tons
SOURCES: CONAB, DERAL, FNP CONSULT.
An approach to Brazilian Agribusiness- Dr. Samuel Ribeiro Giordano- Specially prepared for
LEAD International Session in Brasil-Y2K
5
Table 3 below shows the recent data of agricultural products gross income without
processing.
Table 3 Agricultural Products Gross Income in Brasil (in US$
Billion)
Product/Year
1995
4,559
Soy-bean
4,159
Sugar-cane
4,507
Maize
2,388
Coffee
2,205
Rice
2,811
Oranges
1,567
Dry Beans
1,148
Tomato
0,831
Tabacco
0,862
Potato
0,849
Cotton
0,312
Cocoa
0,297
Banana
5,925
Others
27,706
Total
Fonte: FGV , IBGE e FNP
1996
5,002
4,504
4,498
2,325
2,202
1,800
1,649
1,108
0,978
0,604
0,571
0,287
0,207
6,045
26,769
1997
7,224
5,745
4,497
2,094
2,203
2,552
1,874
0,907
1,271
0,828
0,494
0,447
0,169
6,195
36,500
1998
5,74
5,1
3,55
3,31
2,19
2,534
1,608
1,23
1,3
1,16
0,581
0,436
0,149
6,4
35,288
Brazil is one of the fastest growing consumer markets in the world, in areas such as precooked frozen food, fresh meat, industrialized meat, frozen vegetables, cookies, juices,
fresh fruits and others.
There is a privatization process of electrical, telecommunication services, mining
companies and infrastructure (harbors, high-ways and subway). There is a restructuring
of the public sector in course that will change tax regulations.
There is great farming potential in the “Cerrado” (Savannah) region, in the Midwestern
part of the country, even though there are severe constraints at the environmental
An approach to Brazilian Agribusiness- Dr. Samuel Ribeiro Giordano- Specially prepared for
LEAD International Session in Brasil-Y2K
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The yearly production of agri-food business is estimated to be more than US$ 160
billion, approximately 30% of the GDP. The composition of this total shows 6% to the
input sector, 28% to the agricultural sector and 66% to processing and distribution
sectors.
Brazil has a privileged position in the world scene, not only by the volume produced, but
also by the volume exported. However it has still a poor performance for resourceful
country. The lack of a stable agricultural policy causes a large number of problems to the
production sector. Problems with financing, taxes and poor logistics infrastructure also
hinder competitiveness.
With the recent stabilization process, larger amounts of resources are being invested and
with the privatization of infrastructure, big increases are expected in grain production
(mainly in the Midwestern region ), meats (the poultry and pork sectors are following the
grain production towards the Midwestern and fruits (Brazil is the largest fruit producer in
the world, but the exports are just around US$ 100 million/year), mainly in the northeast
of the country, where large investments are being made, some of them by multinational
companies. These are already market-oriented investments, trying to apply supply chain
management strategies.
Brazilian Agricultural Frontiers and Competitiveness
Brazil is the biggest producer of fresh oranges and fruits in general as well as
concentrated frozen orange juice with 1,055 million of metric tons. Brazil is the second
biggest soy-bean producer following the United States with 23,2 million tons. Brazil is
also the third biggest corn producer behind the United states and China with 33 million
tons. The second biggest tobacco producer behind the United States with 0,427 million
tons. The second in sugar cane and raw sugar production following India, and the first in
coffee and alcohol. Besides that, the planted areas have stabilized since the beginning of
the 80’s. Productivity is growing. From 1980 to 1995 it grew more than 35%.
In order to have a better idea of the Brazilian production numbers table 18 shows the
production of selected crops and table 19 shows the gross income of selected crops in the
last two years.
Other competitive advantages are that Brazil still has a stock of plowable land situated on
good rainy areas. There is still a lot of cerrado (Savannah) land to be utilized. Of the total
area of cerrado areas, around 2.1 million km2, only 33% are occupied by agriculture and
An approach to Brazilian Agribusiness- Dr. Samuel Ribeiro Giordano- Specially prepared for
LEAD International Session in Brasil-Y2K
7
cattle growing. These areas will act as buffers to the exploitation of the rain forest, in the
Amazonian region. The experiments of cattle growing and agriculture in the rain forest
areas were such a great disaster that almost nobody thinks of exploring it in the
traditional way anymore. The slash and burn practices in Amazon has proven
unsustainable to farmers.
In terms of deforestation Brazil is ranked in the 5th place in Latin America according to
EMBRAPA, the State Agricultural Research Company data. In first place comes
Paraguay with 4% of deforestation over the total of its natural forests. Then comes
Equador with 2,6%, Venezuela with 0,9%, Colombia with 0,6% and Brazil with 0,4%.
Regional Competitiveness and Globalization
In the modern world it is necessary to understand the region concept in order to
comprehend the changes caused by the globalization process of the economy. After the
fall of Berlin wall in 1989, the concept of nation-state went down along with the political
borders of countless countries. One good example of this problem are countries whose
borders simply disappeared, due to the formation of the EEC, Nafta, Mercosul and other
blocks.
Discussing the concepts of competitiveness it is possible to link these concepts to the
regional processes inside the larger process of globalization.
In the present process of globalization there is a pulverization and an incitement of the
competitive spaces. In the XIX century Ricardo said, formulating the comparative
advantages law that: “ ...comparing two products A and B produced in two distinctive
countries,1 and 2 expressed the production cost of A in relation to the cost of product B.
The comparative advantage would be in the country in which the smaller relation of
production of A to B would be achieved.”
According with Porter (1993) the idea of comparative advantage, based upon Hecksher
and Ohlin, was that, if all nations had equivalent technology, they would differ in the
production factors such as: land, capital, labor and natural resources.
The examples are: electronic assembly in Korea (with low cost of labor), the Swedish
steel (with very little impurity indexes in the iron ore) the Brazilian soy bean meal (with
abundance of plowable lands). These ideas were later dislodged by the concept of
transnational companies (with production bases in several countries), global sourcing
(with multiple sourcers producing for multiple plants in the world), world products (like
the Ford Escort, Fiat Palio, and many Volkswagen and General Motors models of cars).
An approach to Brazilian Agribusiness- Dr. Samuel Ribeiro Giordano- Specially prepared for
LEAD International Session in Brasil-Y2K
8
The specialization then would not be in a determined country but in a product. The
United States started to produce goods in the form of software, while the hardware was
produced first in Japan and then in the so called Asian Tigers (Hong Kong, Taiwan,
Malaysia and Korea).
In Brazil the example of poultry growing can be cited. This activity is competitive in
determined regions inside the national territory. Genetics is not a problem because it can
be easily bought in the international market. This activity is showing growing
productivity (conversion of meal into meat) with the consequent reduction in the
termination period.
Land in Brazil, as natural resource, is still abundant and cheap when compared to
European countries or Japan. Brazil produces a variety of poultry products ranging from
frozen carcasses (with very little added value) to very sophisticated cuts (taylor made) to
the Japanese market. Other specialty produced in this area are ethnic poultry products
exported to the Muslim countries. These products are supervised by religious ministers
inside the plants to guarantee the tradition and ritual procedures.
Brazil is a "sui generis" case, because the country is also very competitive in the
production of raw materials such as corn and soy bean, used in the meal industry. There
are no problems to expand or to horizontalize the territorial production base of these
crops. In a general way the rains are well distributed in Brazil and, where is not,
irrigation techniques have been used against dry season. These two activities have had an
enhancement in productivity along the last 15 years, through technology acquisition in
genetics and management. These actions guarantee companies situated in the southeast
and south competitive and comparative advantages in relation to other countries.
The biggest problems in Brazil's performance in agribusiness as a whole still remains in
governmental interference, lack of policies, lack of roads and harbors infrastructure (high
operational costs). According to GIORDANO (1995), the inefficiency of these systems
have struck the operations of exports of the whole Brazilian industry, specially those who
depend upon refrigeration, such as the animal protein. Besides that there is a long way to
go until the bureaucratic procedures change.
As can be seen, some times due to other factors, the comparative and competitive
advantages lose their value or diminish in relation to the real margin attained. In Brazil it
can be said that there are various regions inside the national territory apt to expand
horizontally and produce several different products. With a wide range of latitudes and
reasonably well distributed rains around the year Brazil is able to produce a wide range
of products varying from coffee and soy bean to apples, pears, melons, grapes, and
others.
An approach to Brazilian Agribusiness- Dr. Samuel Ribeiro Giordano- Specially prepared for
LEAD International Session in Brasil-Y2K
9
Brazilian Agricultural Frontiers
With a vast territory still to be occupied, mainly in the cerrado region and without
threatening the Amazon Ecosystem, Brazil is expanding its frontiers mainly in three
regions named: Barreiras-Ba; Balsas-Ma and Parecis-MT as shown in the map bellow.
The occupation of these regions occurred more then 15 years ago and now they are
booming with affluence from external financing and the good prices of the soy-bean in
the international markets.
There are important projects financed by JICA-Japan International Cooperation Agency
called PRODECER (Cerrado Development Program). These projects of colonization are
concerned with environmental care and select a specific profile of technified settlers.
In order to understand the importance of these places the Balsas (PRODECER III) region
jumped from 1986 to 1996, from a planted area of 8.8 thousand hectares3 to 89,127
hectares. The corresponding production increased from 13,881 tons to 192,229 tons
averaging an yield of 2.15 tons/ha.
Barreiras in Bahia (PRODECER II) jumped from 250 thousand tons in 1987 to more than
1 million tons in 1996. Ceval Industries is located here with a milling plant which adds
value to grain. There are plans for the construction of a plant with capacity to mill
600.000 tons/year, next to the harbor of São Luis, in the State of Maranhão. With a
railway connecting the Balsas region to the harbor, and having competitiveness in the
production cost besides high productivity, turns this area into one of the most important
soy bean production regions of the world.
The Parecis region in the State of Mato Grosso jumped in ten years from 2.7 million tons
to more than 5,5 million tons in 1996.
The map shows the brazilian "cerrado" (savannah) and more details of the localization of
these regions in Brazil.
3
1 hectare = 10.000 m2 or 2,46 acres
An approach to Brazilian Agribusiness- Dr. Samuel Ribeiro Giordano- Specially prepared for
LEAD International Session in Brasil-Y2K
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An approach to Brazilian Agribusiness- Dr. Samuel Ribeiro Giordano- Specially prepared for
LEAD International Session in Brasil-Y2K
11
The Brazilian Competitiveness
There are a lot of advantages and also disadvantages in the Brazilian Agribusiness
System. In the poultry Agribusiness System, Brazil has a very significant advantage.
High genetic technology was introduced, as well as high management standards. The
meal is very competitive and corn is abundant in the production areas. The practical
result of this efficiency were shown in the fall of the chicken’s meat price for the final
consumers during the implementation of the stabilization plan. Now a considerable
portion of the low income population have included chicken meat in their menus.
Of the total meat produced in Brazil, according to Jank (1996), it is exported 6% of the
beef, 12% of poultry meat and 3.5 % of the pork produced.
2. - A BACKWARD SYSTEMIC VIEW IN BRAZILIAN
AGRIBUSINESS
2.1 - THE CONSUMERS MARKET
The consumer behavior is different among social classes and among the regions of the
country. The cultural influences of european colonization, mixed up with african
immigration and indian culture furbished a peculiar and diversified behavior and
consumption habits to this population.
All kinds of market segments join together in the Brazilian market. There is an A and B
market whose demands characteristics are: high quality, convenience, health and brand
consciousness, light/diet products (growing segment), low cholesterol and fats, more
vegetables and fruit diets and other trends related to the food consumption in USA and
Europe. This is a market that has low restrictions in the income for food expenditures,
and is always demanding new products. Companies like Perdigão are adapting to this
trend, launching a new product every 25 days.
There is also a market for D and E classes, which have a high percentage of income spent
on food, and high income elasticity for meat products, milk derivatives, and other value
added products. This is a market that grows at high rates and is mostly enhanced with
low price products, attracting some companies to develop specific products to reach this
segment. It is a market that has potential to grow due to the high sensitivity of a large
base of low income consumers that change consumption patterns whenever they are
subject to income gains. The so called “income effect” happens when consumption
increases with income increase.
An approach to Brazilian Agribusiness- Dr. Samuel Ribeiro Giordano- Specially prepared for
LEAD International Session in Brasil-Y2K
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Some Consumption Data
The per capita consumption of Beef in 1994 was 32,6 kg reach a level of 35 kg. in 1998.
Yogurts sales were more than US$ 700 million in 1996. The per capita consumption of
Chicken presented a good growth rate in this decade. It jumped from 19,1 kg. 1994 to
24,6 liter in 1998.
Evolution of Meat consumption
per capita-Brasil
In kg/inhab/year
40
30
Beef
Chicken
20
10
0
Beef
Chicken
1994
1995
1996
1997
1998
32,6
19,1
34,5
23,2
35,6
22
36
23,8
35
24,2
Source: CNPC/CONAB
An approach to Brazilian Agribusiness- Dr. Samuel Ribeiro Giordano- Specially prepared for
LEAD International Session in Brasil-Y2K
C o n s u m p tio n O f R ic e a n d D r y
B eans
13
In K g /in h a b /y e a r
80
60
R ic e
D ry B e ans
40
20
0
1994
1995
1996
1997
1998
R ic e
75,4
74,6
74,3
73,3
72,3
D ry
B eans
21,5
20,9
20,4
19,7
18,2
S o u r c e : N a tio n a l S u p p ly C o .
On the other hand the consumption of rice and dry beans are falling due to to the
substitution effect. As the average population income grow the consumption of
carbohidrates fall and the proteins grow.
Other examples are: the domestic market of vegetable oils, which reached US$ 2,3
billion, margarines which reached US$ 600 million, cookies which reached US$ 2 billion
and snacks which reached US$ 900 million. These numbers indeed show a fast market
growth.
Related to the trends of health care and convenience in food consumption, the frozen
ready to eat food market grew 41% in two years in classes C, D and E. In diet products
the market grew 10% from 1995 to 1996, reaching US$ 600 million/year of gross
income.
Food away from home
This is also a very fast growing market, fitting the world’s trends. In 1969, The
Brazilians use to spend around 20 % of their total food expenditures in food away from
An approach to Brazilian Agribusiness- Dr. Samuel Ribeiro Giordano- Specially prepared for
LEAD International Session in Brasil-Y2K
14
home. This number is growing quickly. In 1998 the total expenditure of Brazilians with
this item was US$5.3 billion. Most of this is related to franchise investments in food
away from home. Brazil was, in 1996, the fourth country in number of franchises, with
more than 60 thousand operation points, after the USA (250 thousand), Japan (140
thousand) and Canada (65 thousand) (Source: Arthur Andersen).
2.2 - Supply Sector
The supply sector is, in general, growing very fast. It can be said that the main
characteristics of the stucture of this market is the economical concentration degree, the
diferentiation of the products, barriers to entrance and individual action in a competitive
basis.
In the last seven years the planted area diminished in relation to the productivity that
showed a significant 35% growth. The input sector in Brazil is quite advanced. Due to
the policy of Import Substitutions that began in the middle of the 60s, the country
acquired an industrial base that supported the internal demand for inputs for more than
three decades. The dimensions of the sector can be seen in the above table below :
Table 04 Sales of the Supply Sector in Brazilian Agribusiness. Data in US$, tons, or units
Year Fertilizers
Seeds
Feed
Agricultur Agrochemica Veterinary
Limestone
US$
1.000 t
Stock
al
l
US$
US$ 1.000
1.000
US$1.000 Machinery US$ million
million
1.000 units
1992
1.749
1.516
2.050
16,2
947
515
225.000
1993
1.787
1.660
3.998
26,6
1.050
615
295.000
1994
2.234
1.761
4.387
40,7
1.094
691
306.000
1995
2.311
1.650
4.600
22,1
1.535
750
181.000
1996
2.960
1.700
5.200
13,3
1.762
800
240.000
Source: Anda, Abrasem, Anfavea, Sindam, Sindirações, Sindical. Authors Elaboration.
Due to recent acquisitions and merging, this sector is becoming highly concentrated in
Brazil as well as all over the world.
The veterinary products had sales of US$ 826 million in 1996, with a growth of 5,6%
from 1995. In fertilizers, the consumption in Brazil in 1996 was about 12,24 million ton,
13% larger than 1995. Brazil is the fourth biggest market in the world. The market has
around 250 companies, that also imported more than US$ 1,1 billion in 1996.
An approach to Brazilian Agribusiness- Dr. Samuel Ribeiro Giordano- Specially prepared for
LEAD International Session in Brasil-Y2K
15
The agrochemical sector grew 14,7% in 1996, reaching almost US$ 1,8 billion in sales.
The feed sector also grew, at a lower rate (2,75%), with sales of almost US$ 5,2 billion in
1996.
The agricultural machines market grew 10% in 1996. This is one of the sub-sectors that
suffered most with the short supply of credit lines and the competition promoted by
imported products that happened with the liberalization of the economy.
The Seeds market is a growing sub-sector inside the input sector. The demand for grain
seeds as well as for horticultural products is increasing. There are new corn varieties and
new hybrids in the market. With the approval of the patent law for genetic rights it is
expected to have an enhancement in the the supply of seeds. Sales in this sector
decreased from 1,41 million ton in 1995 to 1,31 million ton in 1996. The main reductions
were in beans, rice and cotton seeds.
3 - CONCLUSIONS
Brazil has been going through a big “quiet revolution” in the last few years. The
consolidation of democracy in the 1980’s, the maturity observed in the 1992 President
impeachment process, the economic stabilization with a new currency since June 1994,
the fast opening of the economy and the election of a president known worldwide for his
academic work, started this very difficult process of change of Brazil’s foreign image.
Besides these aspects there is still a long way to search for competitiveness in Brazil.
The restrictions that may cause some kind of problems in the development of the
Brazilian Agribusiness systems according to Giordano (1996), are:
• Domestic X International Market. Without despising the international markets Brazil
ought to take better care of its domestic market. The general process of inclusion of
consumers in the market in the last two years, due to the raise of the income will not stop
and this factor may be the key to reach surplus to international markets.
• International competition. The opening of the Brazilian economy has forced the
agribusiness systems inside the country to adjust themselves to this new reality,
becoming more efficient, at reducing costs and bettering quality.
• The infrastructure of roads, is still one of the major problems, even though there are good
perspectives to privatize these roads in the long run making them more operational and
efficient.
An approach to Brazilian Agribusiness- Dr. Samuel Ribeiro Giordano- Specially prepared for
LEAD International Session in Brasil-Y2K
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• The cost and efficiency of the Brazilian harbors are still causing problems to exports and
imports. All the competitiveness may be lost when the product is on board.
• Other problems are: lack of strategic vision, lack of coordination, tarifary and nontarifary barriers and taxes.
• The environmental problems and low technology used in vast portion of the Brazilian
territory constitute a serious challenge to surpass in order to reach a good degree of
sustainability.
• The international subsidies given by the USA, EEC, Japan, Korea, and other countries to
their farmers constitute a source of problems for the Brazilian competitiveness.
Examples of restrictions to Brazilian Agribusiness products
Products\Country
USA
Concentrated Frozen Specific Tariff of US$
434/ton
Orange Juice
EEC
Tariff of 17,5%
Anti-dumping Tax of
US$ 0,54/galon of
alcohol
Quota per year of 280
mil t in the sugar
program
Fruits and vegetables Previous Licenses
prohibitions to imports
Prohibition of fresh meat
Beef
(foot and mouth disease)
Preferential agreements
to Africa, Caribean,
Pacific countries
Proibição de Importação
de Carne in natura e
derivados(Mal de New
Castle)
Subsídios à exportação
Proibição de Importação
(Peste suína e Febre
Aftosa)
Restrições a imp.carne
in -natura, e derivados
não cozidos.
Sugar and Alcohol
Poultry
Pork
Restrictions to
imports(Papaia)
Restrictions to imports of
fresh meat (foot and
mouth disease)
Japan
Tariff of 28,5%
Restrictions to
imports (Mango)
Prohibition of fresh
meat , live animals
and semen(foot and
mouth disease)
Restrições a
importação(resíduos
de Nicarbazina)
Proibição de imp.carne in Proibição de
-natura, e derivados não imp.carne in -natura,
cozidos (Peste Suína)
e derivados não
cozidos (Peste
Suína)
An approach to Brazilian Agribusiness- Dr. Samuel Ribeiro Giordano- Specially prepared for
LEAD International Session in Brasil-Y2K
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The scenario that is being designed is very good for the Brazilian agri-food business. The
room for enhancing grain, fruit and value-added processed products with technology,
infrastructure and foreign investments is very large and does not need to use Amazon
region or rain forest to produce. Recent incentives to exports, like tax reductions are
already increasing the production.
Most of the recent movements of the European food industry, related by Fearne (1996,
pag 304), ...food safety legislation, consumer concern of where and by whom food
products are produced, demand for chilled and fresh fruit products, decreasing life cycle,
grown of own label and incentives to squeeze costs in the supply chain to gain additional
margin and enhanced competitiveness...” can be observed in the Brazilian agri-food
business and consumers, as well.
The changing consumer habits towards shopping in big stores, where they can have
everything they need “under one roof”, is also observed in Brazil. The convenience,
comfort, safety and variety are meeting consumer needs. There are still big opportunities
for hypermarkets and discount stores, but only if they have “up-to-date” technology.
In this scenario, Brazil is a very attractive growing segment in the world’s agri-food
business. Multinational companies are entering this market, mainly through alliances
with local partners, in order to compete in an already highly competitive market.
4 - REFERENCES
ABIA (Associação Brasileira das Indústrias da Alimentação). 1995, A Indústria Brasileira da Alimentação Hoje (The
Brazilian Food Industry Today). 28p.
ABIA (Associação Brasileira das Indústrias da Alimentação) 1995, Investimentos da Indústria da Alimentação de 1995
a 2000 (Investments in the Food Industry from 1995 to 2000). Monografia. 29p.
ABIA (Associação Brasileira das Indústrias da Alimentação). 1997, O Ímpeto da Indústria da Alimentação e as
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18
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An approach to Brazilian Agribusiness- Dr. Samuel Ribeiro Giordano- Specially prepared for
LEAD International Session in Brasil-Y2K