March 21, 2012

Subsidies Offered for Irrigation Expansion in Southern Brazil

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

The ongoing drought in southern Brazil has increased the interest in expanding the amount of irrigation in the country. Droughts during the growing season are becoming more common in southern Brazil especially in the state of Rio Grande do Sul where irrigation is already being employed for full-season soybean production. Further north in the states such as Mato Grosso, Goias, and Bahia, irrigation is being considered for supplemental crop production during the dry season.

Last week, the state of Rio Grande do Sul launched a program to increase the amount of irrigated agriculture in the state. The program, called The State Program for the Expansion of Irrigated Agriculture - More Water, More Income, is intended to increase irrigation in the state by offering subsidies for the purchase of irrigation systems and reducing the time needed for approval of irrigation projects.

For small family farmers who qualify for the program, the state will pay 100% the first and last payment for financing the purchase and implementation of irrigation systems. For medium size producers, the state will pick up 75% of these two payments and for larger producers, the subsidy will be 50% of these two payments.

The program also intends to lessen the time and the amount of paperwork it takes to be approved for irrigation projects. Under the new program, holding ponds of less than 10 hectares or irrigation systems of less than 100 hectares will no longer require an environmental license before they are approved by the state. In the past, obtaining the environment permits has traditionally been a key obstacle for farmers wishing to increase their irrigation capabilities.

Further north in Brazil, irrigation is being promoted as a way to double crop production by continuing to produce crops year round including during the dry season, which generally runs from May to September. In Mato Grosso for example, producing crops during the dry season would be ideal due to the warm temperatures and abundant sunshine, but without supplemental irrigation, continuous crop production is not possible.

Currently, only a small fraction of row crop production in Brazil is irrigated. The vast majority of irrigation in Brazil is devoted to more value intensive crops such as coffee or horticultural crops.