This year in Brazil, October was the cruelest month. Soybean planting usually starts then, timed to the first downpours that mark the start of the rainy season.
The problem? Federal powers in Brasilia were playing a game of chicken over the approval of biotech soybeans as planting season approached and farmers here were caught in the middle.
The administration here had temporarily approved the planting and harvest of biotech soybeans at least twice before. But this year it stubbornly refused to issue a new decree as farmers checked weather forecasts and some put off buying conventional seed.
Back in February, the administration sent a bill to the Brazilian House of Representatives, which would put an end to the need for constant one-year decrees and lay the legal groundwork for approval of agricultural biotech.
But the administration's bill effectively made it nearly impossible for a biotech product to gain approval. What's more, the Brazilian House slapped on amendments that complicated its approval, including a ban on stem cell research.
When the biotech bill went to the upper house last February, senators put off voting until October. Then the bill they approved — in a 52-2 vote — was different from the House version, streamlining the biotech approval process and handling the stem cell issue. The two versions would have to be reconciled.
By then it was October, and farmers worried about how to make planting decisions. A thoroughly clogged House agenda meant there was no way the House would take up the Senate version before farmers started planting.
And farmers, especially those in southern Brazil, made it clear they would plant biotech with or without congressional approval. So President Lula was forced to issue yet another temporary decree allowing producers to plant and sell biotech soybeans.
Greenpeace was disappointed. The Green Party threatened to take the decree to the Supreme Court. But what was done was done, and farmers planted. It's estimated that 90% of all soybeans in Brazil's southernmost state of Rio Grande do Sul are biotech.
Despite radical claims by interested parties, Brazilian farmers see biotech as more important now than ever. With falling prices and rising input costs — fertilizer costs here have shot up nearly 40% since last year — savings attributed to planting Roundup Ready soybeans are needed more than ever.
In southern Brazil, Paulo dos Santos farms a small plot and is planting biotech soybeans this year, as he has done since 2001. He says going back to conventional beans would be suicidal.
A thousand miles north, Blairo Maggi, reportedly the world's largest soybean farmer, says, “I firmly believe in the competitive advantages biotech may bring.”
Meanwhile, Monsanto is doubling its tech fee for Roundup Ready technology, and reportedly expanding the area over which it is charging the fee. Last year the Monsanto royalty effort was largely confined to the southernmost state of Rio Grande do Sul. Sixty centavos (about 20 U.S. cents) were charged for each 60 kg bag of soy (a little more than two bushels) harvested.
The temporary presidential decree allowing planting of biotech beans doesn't permit seed multiplication or sales, and some in the Brazilian House are urging an amendment to allow just that.
The soap opera continues and the rains keep coming.
Brazil Invests In Infrastructure
Brazil will invest $570 million to rebuild 11,000 kilometers (6,800 miles) of roads by March, when the 2004-05 soybean harvest begins, according to an article from usagnet.com.
It's an attempt to bring down farmers' freight costs, which amount to $34/ton — about twice that spent by U.S. farmers. The higher transportation costs add $864 million annually to Brazil's soybean industry. Soybean producers in Brazil count on roads for 60% of their transportation needs, on rails for 33% and on waterways for 7%.
In related news, an article from Ageñncia Estado (Brazil) predicts Brazilian agribusinesses will suffer low profit margins, leading to a financial crisis in the next two years. Experts say investments in transport and storage haven't kept pace with increased production and may be reduced further.