Nov 03, 2010
Farmers Want Brazil's New President to Focus on Infrastructure
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
When Ms. Dilma Rousseff assumes office as Brazil's first female president on January 1st, the number one issue the agricultural community wants her to address is the improvement of the country's infrastructure. According to Joel Naegele, vice president of the National Agricultural Society, their most urgent need is to reduce the cost of transportation by improving the infrastructure.
Brazilian farmers are just as competitive as their counterparts in the Unites States or Argentina, but as soon as their crops leave the farm, they start to lose out due to the high cost of transportation. Most of the grain moves by trucks along poorly maintained roads and it takes an inordinate amount of time for the grain to reach its destination. According to Naegels, one of the biggest impediments to expanded agricultural production in Brazil is inadequate logistics.
As far as agriculture is concerned, probably one of the most well known railroads in Brazil is the Ferronorte Railroad which has just barely managed to make its way into the southeastern corner of Mato Grosso. Construction on the railroad has resumed after an eight year delay, but it remains more than a decade behind schedule. A lesser known but equally as troubled railroad is the North-South railroad which will pass through the states of Goias and Tocantins heading north to ports on the Atlantic Coast. Construction on the railroad started in 1987 and 23 years later, it's still not completely built.
Infrastructure improvements are needed for all forms of transportation in Brazil: highways, railroads, barge, and marine, if Brazilian farmers are to remain competitive. Improving the infrastructure is the quickest way to improving the farmers bottom line without the need for higher commodity prices.