Agro: the vector of Brazilian recovery

“Evil winds are blowing on the blue planet". The phrase from sociologist Manuel Castells could not be more current given the sequence of negative events in recent years. In 2022, when production chains were reestablishing themselves and the logistical order was being reorganized, the strength of labor and capital when the armed conflict breaks out in Ukraine.

In this unstable scenario, challenges are imposed on all countries unequally and over an indefinite time horizon. In the post-pandemic/war environment, a new order will certainly emerge marked by disputes over international resources, which seek investment opportunities based on the acronym ESG (Environmental, Social and Governance). Numerous actors and groups of countries with interests and agendas focused on resuming growth will require complete examinations of business models and the strengthening of sectors that can contribute in a sustainable way to the prompt recovery of social life. But, how does Brazil fit into the equation of the new order that will emerge? The country has all the conditions to become a powerhouse in generating wealth from 'green' production systems, however, the path to follow is not as simple as it seems.

Among the 'green' investment options, despite some environmental distortions, more associated with waste than with production systems, there is no doubt about the potential of the Brazilian agricultural sector. Due to the availability of natural resources, particularly land and water, business capacity and technology for production in the tropics, Brazil is one of the few candidates for power in the global food supply. The trajectory of Brazilian agriculture in its various cycles (Brazilwood, Sugarcane, Rubber, Coffee, Yerba Mate) was not trivial, being marked by the use of technology and insertion in the world market. From the sugarcane economy in the colonial period, considered a precursor model of current agribusiness by integrating agricultural and industrial activities, to the recent expansion of grains, with emphasis on soybeans, whose share in the Gross Value of Agricultural Production went from 13 in 2000 to 27% in 2021, and meat, transformations have guaranteed a pace of technological innovations with an emphasis on the mechanization of agricultural production and the modernization of activities 'after the gate'.

The point is that, despite the various agricultures existing in Brazil and the timid increases in the shares of peanuts and grapes in the Gross Value of Agricultural Production, for more than two decades, the so-called Brazilian agribusiness has been based on a few production systems with a tendency to concentration. in grains, meat and cotton. It is important to note that important products for both wealth generation and job creation, such as sugar cane and coffee, tend to lose importance. This is an important warning since agriculture, one of the most important historical vectors for the country's development, tends to lose momentum in generating employment.

The job market in Brazil, in line with global trends, tends towards the services sector. The issue is that, unlike more developed economies, the Brazilian services sector is quite heterogeneous in terms of company size, average remuneration and intensity of technology use. Even though there is a group with higher productivity (R&D and marketing) and which adds value to the product, with salaries and more favorable insertion of people employed in the job market, the predominance is of 'cost services', such as logistics and infrastructure, which operate as a production cost with much less favorable results than 'value-adding services'.

The dynamics of innovation and specialization in Brazilian agriculture were not in vain as they enabled the country to scale its production and occupy a prominent place in several products on the world market. The issue is that, despite the virtuous dynamics in wealth generation, the agricultural sector has been losing importance in the job market, being the only one that has reduced (2,3 million vacancies) jobs when compared to the years 2000 and 2015. Because On the other hand, spillovers from agricultural production are considerable. In 2021, approximately 45% of jobs generated by agribusiness occurred within the primary sector, 32% in the services sector and 21% in industry.

Employment data in agribusiness suggests the importance of the sector for the resumption of economic growth, in addition to its importance as a food supplier. The point is, even considering the links in industry and services, the income from employment generated by agribusiness is low when compared to other sectors of the economy. Even though the production of inputs offers the best income to agribusiness personnel, the qualification of the workforce is below that observed in similar activities in other sectors of the economy. When comparing agroindustry with other manufacturing industries, agroindustry workers have lower wages. Part of this difference is attributed to the fact that the average level of education in this segment is 14% lower.

In this scenario, it is important to remember that, due to the particularities and challenges (climate, incidence of pests and diseases, etc.) for the practice of agriculture in a tropical climate, the assertiveness provided by Agriculture 4.0 and the use of 'green' inputs, notably biological, are central to sustainable productivity gains.

Agriculture 4.0, based on data management and the use of bio-inputs, is a promising alternative to stimulate the generation of qualified jobs in national agriculture and must be pursued vigorously. However, there is still a long way to go to harvest the fruits and it is necessary to overcome the challenges of a deficit in infrastructure and qualified labor. In other words, despite the potential of agriculture 4.0 and bio-inputs to generate jobs, it is necessary to stimulate consolidated agricultural production, which has the capacity to respond in a short period of time and requires a smaller volume of investments, such as fruit growing.

Fruit farming’s capacity to generate jobs, including qualified services, is relevant. It is estimated that, for every job generated by fruit growing 'inside the gate', which on average employs more than five workers per hectare, another seven are generated outside the gate. In 2021, fruit growing employed 11,5% of total jobs in agriculture, an increase of 9% compared to the previous year. Brazilian fruit production exceeded 40 million tons, occupying less than 0,5% of the national territory, an insignificant fraction when compared to the 7% occupied by grains. There are more than 940 thousand agricultural establishments distributed in all regions of the country, of which 81% are family-owned. Fruit exports generated almost US$2 billion in 2021 with a predominance of just seven fruits (mango, melon, grape, lemon, apple, watermelon and papaya). The excellence and diversity of the Brazilian fruit basket (more than 40 species) has the potential to greatly expand participation and the period of supply on the international market, with almost immediate repercussions for employment. Fruit growing is 'failing to mature' to contribute to Brazil's recovery, however, public authorities need to build bridges connecting the national producer to the international market.

By Pedro Abel Vieira, Antonio Marcio Buainain, Roberta Dalaporta Grundling e Elisio Contini, Embrapa researchers