The reinvention of agriculture in Rio Grande do Sul – 09/29/2024 – Market

Natural cycles and events remain connected to primary activity, even though technical advances and productivity have reached significant levels in recent decades: in parallel, extreme occurrences have become more frequent and affect, above all, regions of climate transitions, such as the southern region of Brazil.

For Rio Grande do Sul, national leader in the production of rice, wheat, grapes and oats, as well as being relevant in soy, beef, chicken and potatoes, farming has always been a vocation that characterized the state. Therefore, the impact on Brazilians’ food basket due to climate problems is relevant and difficult to replace in the event of crop failures and crops becoming unviable.

The problem posed by successive occurrences, which have been accumulating for at least a decade and which have led to a growing need for investment in the use of new techniques, currently adds up to: (1) higher insurance payments; (2) a general decline in commodity prices; (3) significant increases in input prices and, therefore, lower profitability margins; (4) in addition to resources for the Safra Plan in a smaller volume than desired; (5) and unfavorable interest rates in public and private agricultural financing.

These challenges are added to existing ones, such as the difficulty in logistical flow in the east of Rio Grande do Sul, with roads that are comparatively worse than those of national or international neighbors, making access to ports difficult and more expensive. As an additional example, the port of Rio Grande, in the south of the state, usually closes its activities due to stormy conditions on the coast, hindering the productive performance of the terminals.

Therefore, it is not difficult to map the strategic actions necessary for the primary sector in Rio Grande do Sul to establish increasing levels of productivity. It is complicated to do so in a context in which there is no sensitivity on the part of the authorities to the urgency in resolving these problems and resources are scarce or in a state budget context in which investments are low, due to the pressure of civil service expenses accumulated over the years. of decades.

Therefore, a new financing “door” is needed for actions to adapt to the new, more competitive reality. Possibly, with the expansion of trade with countries in the Pacific basin, already predominant in the state’s trade balance, external capital should be attracted to works.

To list the priorities for action, which reach the entire Brazilian economy, we can list: reinforcing the agricultural machinery industry, present and dynamic in RS, as an instrument for increasing agricultural productivity is an imperative to offer solutions for the whole of Brazil; making a concentrated effort in logistics on roads and ports is a way of delivering cheaper food to all Brazilian consumers on their tables; and redesign financial resources aimed at agriculture, insurance and financing, in light of new climate parameters and price volatility of products and inputs in international commodity markets.