Wow. Brasil was as expected an absolute eye-opener. This country has the reputation as being the next big thing in agriculture and everywhere we looked you could see enormous potential.

Agriculture makes up 30% of GDP (compared to Australia’s 2.8% in 06/07) and they export about 12% of their produce – with a commodity-based economy, the last ten years have treated them pretty well. In fact they feel they are shielded from sub-prime woes to their north, although recent good times may have masked the requirement for continual reform and improvement – probably the most striking need at the moment is for more investment in transport infrastructure.

If you’re thinking Australia needs to start investing into Brasil well you’re not the only one – there are currently about 450 Aussie companies there, including National Australia Bank just opening and Wellard Rural Exports. The largest problem is what’s known as ‘custo Brasil’ – the cost of doing business in the country. We found everyday things certainly weren’t as cheap as we expected and this extends to the sort of investment and outlays an Aussie company would have if they were to head to Brasil. In addition general red-tape and labour laws provide some frustration.

Before visiting Brasil I had thought once they got their act together they could provide some pretty stiff competition in the global marketplace, and while they do have great potential, what I hadn’t considered was this. Brasil needs to produce huge amounts of food to keep up with its expanding population - estimates are they will go from 190 million people to 240 million by 2050. Even more importantly are the stats on its expanding middleclass – those that earn at least AU$800/month. While 10 years ago 34% of Brasilians were in the middle class, that’s now at 50% (100 million people) and growing, therefore demanding greater quantities of better quality nutrition.

I think their ability to achieve this will come in two ways – there is great potential for land to be converted into cropping land from pasture – 10 million ha just in Sao Paulo state alone – and secondly from improvements in cropping technology. This last point is where I think there are some real possibilities for Australian investment, selling our knowledge and equipment to send yields through the roof in a traditionally labour-intensive production system. The downside locally of course is less jobs on farms for Brasilians as technology improves.

From a media perspective the food vs fuel debate is certainly in the public arena – ie when crops like soybean or sugarcane are diverted into biofuels/energy to the extent it starts impinging on the country’s ability to produce enough food... This issue will continue to grow!

Politically it was interesting to learn that out of 600 politicians there is a block of 200 who are aligned with agriculture – that is, they represent the interests of agriculture in federal parliament when issues are up for debate – wish we could say the same at home!

There’s still so much more about Brasilian agriculture I could tell you about – we had long sessions with political advisors on management of the Amazon forest, the pioneering work they’ve done on bioethanol and much more, but I need to leave something for presentations at home!

Canada next!