Leader predicts explosive growth - Truth About Trade and Technology

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Monday, 29 November 1999 18:00

SAO PAULO, Brazil - The recent explosion in Brazilian agricultural production is just the tip of the iceberg, says a Brazilian farm leader.

"There is no limit," said Luiz Marcos Suplicy Hafers, past president of Brazil`s largest conservative farmers group and a key government adviser.

"We are hard workers. This is not a manana country. We are very, very hard workers."

Hafers said Brazilians` willingness to doggedly break new land, embrace new technologies and adopt new production methods will mean that neither domestic nor international problems affecting farmers will stop the country`s agricultural growth.

Those problems are significant, and Hafers was blunt in condemning what he considers American hypocrisy in trade policy, which has offended Brazilian farmers and cost them money, but will not discourage them.

He said many Brazilian farmers like him feel betrayed by the United States` failure to live by the rules of free and fair trade that it claims to champion.

"Suddenly we felt cheated," Hafers said about U.S. domestic subsidies and tariffs against imported sugar cane, orange juice and other agricultural products.

America has demanded that the world move toward free trade, and many developing nations have followed its advice, but after opening their markets to American products, they find the U.S. market closed to them.

"When it came to our turn, it`s not that way. You must understand - we are bitter," Hafers said.

"My model is cheating me."

Hafers said Brazilian farmers can produce orange juice for about seven cents US per litre, but Florida producers are given a 22 cents per L subsidy, which keeps Brazilian orange juice out of its market.

"What is the last name of the governor there?" he said. "Is it Bush?"

He said many Brazilian farmers who are ardent free enterprisers are now cynical about American trade policy.

"So much for free trade. So much for level ground. So much for free enterprise."

Hafers said the U.S. shouldn`t try to hold back Brazilian agricultural growth because more wealth in Brazil will create a large market of 170 million people for the expensive consumer goods that it produces but that few Brazilians now can buy.

"We don`t want to produce more to just put in the banks," Hafers said.

"We want to spend more."

He said the banking system is another factor that is slowing, but in no way stopping Brazil`s agricultural growth.

Unlike North American farmers, who can often get bank loans with interest rates less than 10 percent, the going interest rates in Brazil are 100 to 150 percent per year, which stops Brazilian farmers from investing as much in equipment and inputs as they like and from being as productive as they should be.

"Land is not the problem here, capital is," Hafers said.

It also holds back Brazilian consumers, who can`t buy anything on credit.

"If our interest would be high, but just not obscene, my secretary could buy three times as much."

Once consumers have more money, they will eat up much of Brazil`s agricultural production.

"As the poor population gets richer it will eat more and different," he said.

"The market here, it`s explosive. What we don`t have is money."