| Agricultural Management

Climate risk management is fundamental to the competitiveness of Brazilian agribusiness

The numbers prove the importance of Brazilian Agribusiness for the local economy and its fundamental role in the distribution of food around the world.

09.11.2016 | 21:59 (UTC -3)

The industry represented around 21% of Brazilian GDP in 2015, generates 18% of total jobs in the country and its exports are equivalent to 46% of the total sold abroad.

Brazil is one of the largest agricultural producers and exporters in the world, and is among the leaders in the production and export of commodities such as oranges, sugar, coffee and soybeans.

The current situation is good and the prospects are even better. Brazil has the largest amount of arable land still available to be cultivated, there is potential to increase productivity with technological advances and commercial borders are being broken, we recently managed to negotiate the release of Brazilian meat on the American market.

However, this competitive condition may be threatened if the country does not effectively wake up to the climate issue. According to PWC studies, it is necessary for the “decarbonization” rate to be 6,3% per year until 2100 so that the temperature increase remains within the 2º ceiling as defined at COP21 in 2015. On the other hand, Brazil is still in the opposite direction, that is, we are increasing greenhouse gas emissions by 3,6% per year.

Agribusiness is among the sectors that most need to contribute to achieving the goal of reducing greenhouse gases. This consists of combating illegal deforestation, especially in the Amazon, greater incentives for reforestation and ABC (Low Carbon Agriculture) programs.

Climate management policy is fundamental to the competitiveness of Brazilian Agribusiness. Brazilian Agribusiness is an industry highly dependent on credit and more and more international financing sources are considering the issue of global warming and countries that are not committed to the climate agenda could be harmed.

Therefore, the climate will be very important in international trade, that is, the economic and climate agendas converge and, therefore, CO2 mitigation is essential so that the country is not exposed to monetary risks.