The organization of agricultural production increases competitiveness

Man is par excellence a social being. Therefore, he lives in society, where the family is the first and perhaps the most important link in any society. In agricultural production, society is also extremely important, especially when thinking about the organization and scale of production. In Brazil, we have several successful cases of producer organization, including the majority of cooperatives, producer associations, among other forms of organization.

Typically, agricultural cooperatives provide inputs (seeds, fertilizers, insecticides, herbicides, fungicides, diesel oil), technical assistance, process, benefit and sell the production of cooperative members. Some cooperatives also provide the capital necessary for production in the form of a loan. The organization of producers in cooperatives makes the agricultural business more competitive, as it allows the producer to buy and sell better, due to scale. When the cooperative buys an input, it is making it for several producers, thus increasing its negotiating power with the manufacturer. When it sells the production of several producers, it substantially increases the volume of product, thus being able to negotiate much better. It provides scale to the producers’ business.

There are producer cooperatives that are fundamentally concerned with purchasing inputs and selling production. They also get better prices when purchasing and selling. Also, as an example, there are pig farmer cooperatives that provide piglets, feed and technical assistance and process the meat. In all examples, the producers, who are the owners of the cooperatives, are the biggest beneficiaries of the organization. In Mato Grosso do Sul, we have cooperatives that produce soy derivatives, from the crushing of soybeans, that produce cotton yarn and cassava derivatives, from pig meat, supply electricity, diesel oil and organize the purchases and sales of their cooperators. Organizing producers into cooperatives gives them greater competitiveness.  

Another form of organization, very important for strengthening rural producers, are producer associations. In Brazil, there are several success stories, such as the association of mountain coffee producers, in the interior of the state of São Paulo, and the state associations of cotton producers. In the case of the Mountain Coffee Producers Association, the organization is allowing increased productivity, reduced production costs and the production of quality coffee, allowing the export of special products, with significant added value.

In the case of cotton, the importance of producer organization is emblematic. In the mid-1990s, Brazil did not produce cotton to meet its domestic demand, it was a large importer of cotton. Based on the initiative of producers in Mato Grosso, with the creation of the Association of Cotton Producers of Mato Grosso, closely linked to agricultural research, especially with Embrapa and later with other producer organizations, cotton cultivation expanded in the state from Mato Grosso and then to other states such as Bahia, Maranhão and Piaui. Traditional states in cotton production, such as Minas Gerais, Goiás, São Paulo and Paraná, also created their state associations and subsequently the Brazilian Association of Cotton Producers – ABRAPA was created, which brings together all state associations.

Currently, Brazil is the fourth largest cotton producer in the world and the second largest exporter, thanks to the incorporation of new technologies and the work carried out by the producers' organization in the generation and transfer of technologies, in initiatives seeking the sustainability of Brazilian cotton, and in the rigorous classification standard used by state associations and audited by ABRAPA. Furthermore, strong work has been carried out to improve the image of Brazilian cotton and to create new market options, which is being achieved successfully.

Based on the examples presented in this text, there is no doubt that the organization of producers is essential for them to be successful in their activities. The organization of producers is the shortest way for farmers, especially small ones, but not only, to overcome one of the biggest challenges, which is access to the market.

By Fernando Mendes Lamas, researcher at Embrapa Agropecuária Oeste