​But agribusiness is doing well, right?

The title of this article is a question, in the form of a statement, that appears on the most different occasions, when discussing the situation of the Brazilian economy. To the affirmative, or rather, question, I usually respond with another: what agribusiness are we talking about? After all, there are many segments and different realities.

Without a doubt, the sector's macroeconomic indicators are doing well, especially when compared to the economy as a whole: in foreign trade, the last 12 months recorded a surplus of US$78 billion and, in the result of the Brazilian GDP in 2015, the activity registered growth of 1,8%, compared to a 3,8% decline for the country as a whole. Furthermore, the appreciation of the dollar significantly compensated, at least until the last harvest, the drop in international prices of the main commodities produced by Brazil. There is no doubt that this information derives from the common sense that, with agriculture, everything is going very well, thank you.

However, why in this scenario does agribusiness confidence show a clear and very well-defined downward trajectory, since it began to be measured by Fiesp and the Organization of Brazilian Cooperatives (OCB) in 2013, despite some periods of improvement in the middle of the year? path? At first, this may seem like a big contradiction, but I'll tell you: it's not.

Macro numbers do not show what confidence indicators can capture. These are expectations, based on concrete or emotional facts, that determine behavior and decisions related to the business. Observing the data carefully, if, on the one hand, the agricultural producer's assessment of his own business and the sector in which he operates remains high, on the other, the fear about the economy and politics is great to the point of making you act like any salaried consumer. Without any certainty about what will happen, put your foot on the brake and reevaluate your purchases, in this case, the costs and investments.

The result of this is a reduction in the technological package used in farming, with important impacts on agribusiness, more specifically in the input industries. The year 2015 was one of poor results for several segments: pesticides recorded a 22% drop in revenue; fertilizers saw a 6% drop in deliveries; and agricultural machinery and implements suffered a 30% drop in sales, compared to a negative percentage of 16% in 2014, whereas, in 2016, they already accumulated a 40% drop in the first four months of the year. In the latter case, we return to 2007 levels.

Thus, despite the enormous care taken by producers in the agronomic management of the property in the last harvest, the reduction in the use of inputs, combined with the climatic problems faced in carrying out the farming, led, after six consecutive years of increase, to a reduction in the harvest Brazilian grain production in relation to the previous cycle, according to the report released at the beginning of May by Conab (Companhia Nacional de Abastecimento).

At the other end, the food industry, recently hit by IPI increases, sees consumers changing their choices to less elaborate products. Despite this, even basic items, such as soybean oil and wheat flour, essential for preparing meals, are already showing a decline in sales. The most recent figures on the sale of food products in 2015, measured by IBGE, recorded a decline of 2,5%, which represents the worst result since 2003. It is clear that agribusiness is not oblivious to what is happening in the Brazilian economy. Right now, for example, the strong volatility of the dollar against the real raises doubts and uncertainties. We cannot lose competitiveness at an international level.

Therefore, care must be taken when analyzing such a complex sector. Mixing, in the same basket, soybeans, ethanol, oranges, agricultural machinery, pesticides and the food export industry with activities aimed at the domestic market is a guarantee of an evaluation error. It is possible that the direction of the political scenario and the beginning of the administration of the acting President of the Republic, Michel Temer, have the capacity to modify the low levels of trust. The increase in fertilizer deliveries in 2016 may be a good indication in this regard. Anyway, to complete my answer to the uncomfortable question, I always say: it could be better, much better.