This month’s Fortune Magazine has an interesting article about Brazil, this time on agriculture. The article talks about Brazil’s long term agricultural strategy strategy and how they have emerged as a major supplier of Soy Beans on the world market, now surpassing the U.S.
Not only are they out-producing the US, they are doing it at lower prices. The expectation is that this gap will continue to grow, forcing the US into lower volume specialty sectors of the market. All this and at the same time going green.
Strategically, they took a very long term approach to the market. Beginning over 40 years ago, the Brazilian government went to great length to build out their transportation infrastructure to give farmers access to vast amount of fertile and undeveloped land. They built roads and cities. There were hiccups along the way but they stuck with the strategy.
In parallel, knowing that there were problems with the soil and climate for producing major cash crops, they sent many students to Universities (many in the US) to learn modern farming and agricultural techniques. This investment paid off big time, as these PHDs came back and developed new varieties of Soy and other crops that could flourish in their soil and climate.
As of right now, the country enjoys a relatively low cost product infrastructure and is becoming an agricultural powerhouse. Not only are they big in Soy, but they are getting very large in cattle, pigs, chicken, and a variety of cash crops.
Certainly a model that many other developing nations will be following.
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