Missing the target: Brazil's agricultural policy indirectly subsidizes foreign investments to the detriment of smallholder farmers and local agribusiness
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2022
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Currently there is controversy about the effect of direct foreign investment in the Brazilian
agricultural sector, mainly due to the impact it has on small farmers, land use, the
environment, and food security. In this context, Brazil finds itself in an even more delicate
situation, since in order to remain a bulwark of the economy, Brazilian agribusiness
depends heavily on public policies that directly impact its treasury. This suggests
there is an indirect transfer of public resources to transnational companies involved
in agribusiness production chains. This paper assesses the allocation of agricultural
credits in Brazil and the market share held by Brazilian groups, vis-à-vis multinational
corporations in the agribusiness supply chains. The study was carried out analyzing
the three largest supply chains established in the country: soybean, corn, and cattle.
Results reveal that 75% of the operating credit (crédito de custeio), which represents
60% of the total government credit in Brazil, goes directly to soybean, corn, and
cattle farmers. Most of this subsidized credit budget goes to the soybean farmers,
which are mostly encompassed by large farmers. Results also reveal that 76.1% of the
soybean supply chain in Brazil is controlled by foreign multinational corporations. These
findings suggest that resources invested in large farmers that take part in supply chains
controlled by multinational foreign groups end up indirectly financing foreign companies
to the detriment of local smallholder farmers and domestic agribusiness. This highlights
the need for restructuring Brazilian agricultural policy in favor of family farmers and
domestic agribusiness.
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Foreign direct investments, Agro-industrial crop production, Agricultural policy, Domestic market share, Agriculture supply chain
Citação
CORCIOLI, Graciella; MEDINA, Gabriel da Silva; ARRAIS, Cristiano Alencar. Missing the target: Brazil's agricultural policy indirectly subsidizes foreign investments to the detriment of smallholder farmers and local agribusiness. Frontiers in Sustainable Food Systems, Lausanne, v. 5, p. 73-102, 2022. DOI: 10.3389/fsufs.2021.796845 . Disponível em: https://www.frontiersin.org/journals/sustainable-food-systems/articles/10.3389/fsufs.2021.796845/full. Acesso em: 23 jul. 2024.