August 18, 2011

Large Agro-industrial Groups Control More Land in Mato Grosso

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Studies conducted by the Mato Grosso Institute of Agricultural Economics (Imea) indicated that 20% of the productive land in Mato Grosso is owned by 20 large agro-industrial groups. The study shows that 5.12% of the state or 328,000 hectares are owned or controlled by individuals or companies that reside outside of Brazil. During 2010, the percent of land in Mato Grosso devoted to production agriculture increased 3.15%, but the amount of agricultural land owned by foreigners increased by 14%.

Between 2004/05 and 2010/11, these large agro-industrial groups increased their agricultural land holding in the state by 130% while at the same time the total number of hectares devoted to production agriculture in the state held steady or declined slightly. In other words, these groups are not interested in opening new lands for agricultural production; rather they concentrate their purchases in areas where the land is already under cultivation.

According to the director of Imea, the concentration of agricultural production into the hands of fewer and fewer individuals does not adversely affect agricultural production because these individuals usually have the resources needed to produce crops more efficiently. Rather, the biggest impact of this concentration is on the social fabric of the rural communities. These large absentee landowners do not live in the small rural towns and they do not spend their earnings helping the local commerce. Their children do not attend the local schools and they are not involved in improving the local communities.

This concentration of agriculture into the hands of foreigners has many in Brazil starting to rethink the country's policies concerning foreign purchases of Brazilian farmland. The Brazilian Congress and the state legislatures have been struggling recently trying to put together new regulations that restrict the amount of land foreigners may purchase in Brazil while at the same time allowing needed foreign investments in the agriculture sector.