Dec 07, 2009
Farmers In Mato Grosso Awaiting Completion Of The "Soybean Highway"
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Soybean farmers in Mato Grosso have long contended that the lack of adequate infrastructure to move their products into export channels puts them at a disadvantage compared to soybean farmers in southern Brazil. That is why there are anxiously waiting the completing of the construction of highway BR-163 between northern Mato Grosso and the Amazon River port city of Santarem. Once the highway is completed, their soybeans could then be moved north to a port on the Amazon River, which is more than 3,000 kilometers closer to their customers in Europe and Asia.
Highway BR-163, which is sometimes called the "Soybean Highway", runs north-south through the center of Mato Grosso and it serves as the major thoroughfare for some of the best soybean production in Brazil. Mato Grosso accounts for about one third of Brazil's soybean production and approximately half of Mato Grosso's production lies on either side of BR-163. Currently, soybeans exported from Mato Grosso must travel 2,000 kilometers to the Port of Santos in the state of Sao Paulo or 2,500 kilometers to the Port of Paranagua in the state of Parana. Once completed, the new highway will put the soybean fields of central Mato Grosso at least 1,000 kilometers closer to a grain export facility.
Transportation costs are a major concern for soybean farmers in Mato Grosso and its reflected in the price they receive for their soybeans. Currently, soybean prices in central Mato Grosso are approximately R$ 37 per sack of 60 kilograms, whereas in western Parana the price is R$ 44 per sack and in Rio Grande do Sul, its R$ 45 per sack. The difference is a reflection of the transportation costs.
As anxious as they are for this new highway to be completed, the earliest possible completion date is scheduled for the end of 2011 and that would be barring any additional delays. A 300-kilometer stretch of the proposed highway within the state of Para is still awaiting approval from the Brazilian EPA. Construction cannot begin on the stretch until approval is granted.
Environmental groups have long opposed the construction of this highway, which cuts through the lowland Amazon Forest. They contend that asphalted highways are responsible for 75% of the deforestation in the Amazon. They point to other highways in Brazil that opened up areas to increased deforestation by loggers, farmers, and ranchers. In order to counter this criticism, the Brazilian government set aside much of the land on either side of the highway as protected areas where deforestation would be prohibited. The government joined together with grain companies and meat packers in pledging not to purchase any agricultural products from areas that were illegally deforested. The hope is that if there is no financial incentive to clear the land for agricultural pursuits, there will be less pressure for deforestation.