Industrialized soy generates GDP 107% higher than unprocessed – 05/10/2023 – Vaivém

The soybean chain advances in the country. It has one of the main GDP (Gross Domestic Product) growths, remunerates workers in the sector better than the agribusiness average and has 2 million employed persons. The sector differs, however, when it comes to opening jobs for women, mainly in rural production.

The industrialization of the product has generated an income well above the result of the sale of unprocessed soybeans, but, both for internal and external reasons, the industry has not been able to keep up with the rapid development of production in the field.

Last year, the soybean and biodiesel chain generated a GDP of R$ 674 billion, a financial volume 58% above that of 2010. In these 12 years, agribusiness accumulated an 8% increase, and the economy, 12%.

The main product of Brazilian agriculture, soy generated a GDP of R$ 192 billion inside the gate last year, but it was outside the gate that the largest share of revenues occurred. The agroservice, which incorporates transport, commerce and other links in this chain, was responsible for an aggregation of R$ 363 billion. The rest of GDP came from agribusiness, with R$77 billion, and from the inputs segment, with another 42 billion.

The data are from Cepea (Center for Advanced Studies in Applied Economics) and Abiove (Brazilian Association of Vegetable Oil Industries) and were presented this Wednesday (10) by Nicole Rennó Castro, a researcher at Cepea.

For the researcher, the evolution of soy production has a greater rhythm than that of oilseed processing. In 2010, soy accounted for 23.8% of the chain’s total; agribusiness, with 14.3%. Last year, the share of soy was already at 28.5% and that of agroindustry dropped to 11.4%.

The evolution of internal processing is important because it adds value to the product. Last year, a ton of processed soy added R$ 5,608 to GDP, 107% more than soy produced in the field and not processed.

André Nassar, CEO of Abiove, says that the industry has been growing, but the rhythm of evolution of the planted area in the field is greater year after year, with growth of 1 million to 1.5 million hectares annually.

For Daniel Furlan Amaral, Director of Economics and Regulatory Affairs at Abiove, the difficulties for greater industrialization in Brazil occur both for internal and external reasons.

Internally, the problems come from tax issues, competitiveness of logistics and public policies. As for this last point, he mentions the change in the percentage schedule for mixing biodiesel with diesel that occurred last year.

Externally, the big importers, like China, want to promote the industrialization of the product in their territory. In addition, Brazilian exports are hampered by trade barriers and the need for more trade agreements.

In fact, there is a worldwide irrationality when it comes to processing, according to Geraldo Sant’Ana de Camargo Barros, Cepea’s scientific coordinator. Processing has to be done in the producing region, but everyone wants to industrialize and this represents a net loss for the world economy. “Countries don’t put into the costs how much they are paying to take the grains”, he says.

The soy chain, which last year brought in US$ 61 billion in exports and accounted for 38% of the foreign revenues of Brazilian agribusiness, is more formalized and has an average education level higher than that of the rest of agribusiness, according to Rennó.

The study’s data show that 45% of the population employed in the soy and biodiesel chain have secondary education, 25% have higher education and only 2% have not studied.

The researcher points out, however, that it is a predominantly male labor market. Women make up only 34% of the workforce, down from 43% of the national average. In the soybean production sector, the participation of female labor is reduced to just 17%.

The average monthly income is BRL 2,912 in this chain, 29% more than the agribusiness average. In soy production, income is R$ 3,417, 115% higher than in this sector.

Camargo, from Cepea, says that there is a stigma against agro and soy. The research seeks to increase the productivity of soybeans, beans, rice and wheat. In the case of cereals, there is a lack of demand, due to poverty and the globalization of all commodities. They are influenced by the exchange rate, which is quite unstable in the country. An income transfer program is needed to raise domestic demand, he says.