Wednesday, September 1, 2010

Brazil's Farming Revolution

The Economist ran with a great feature story last weekend on the tremendous growth of the Brazilian agriculture economy (“The Miracle of the Cerrado”). While it is a fairly in-depth article, one of the more fascinating takeaways is highlighted in the chart below. With only 50 million of its 400 million hectares of arable land currently being utilized, Brazil has significant spare farming capacity to help feed the world’s growing population. In fact, Brazil has as much spare farmland as the next two countries together (Russia and America). Given that the world’s population is anticipated to rise from 7 billion to 9 billion by 2050 (in addition to a doubling of the urban population over that timeframe), Brazil’s agricultural economy will play a vital role in feeding this growing population, which will require a 50% increase in grain output and a 100% increase in meat production.

In addition to being blessed with significant spare farmland, Brazil is awash in fresh water. According to the UN’s World Water Assessment Report of 2009 highlighted in the article, Brazil has more than 8,000 billion cubic kilometers of renewable water each year, more than any other country. Brazil alone (population: 190m) has as much renewable water as the whole of Asia (population: 4 billion).

I would encourage everyone to follow the link to the article (see above) to get a more comprehensive overview of the topic since my amateurish summary leaves a lot to be desired.

1 comment:

  1. Again, thanks for the post. I read the article and BrasilAgro seems like a great long term investment - what do you think?

    Also, an interesting side - despite the spare farmland (7/8 of the total arable land, as you noted), economist Delfin Netto estimates that 90% of the agricultural success in the past 30 years was due to factor productivity, and only 10% from use of the spare farmland.

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