Good times for Brazilian agriculture

Agriculture is already huge in Brazil. Soybeans compete with EMBRAER's airplanes for the top spot in Brazilian exports year on year, and the country is among the world leaders (if not the leader) in chicken and beef exports as well. And now, in addition to all this, comes a few new pieces of news.

For one, today Lula was awarded the World Food Award, given by the aptly named World Food Award Foundation in Iowa. It was founded by the famous Norman Borlaug of the Green Revolution fame. Lula won the award on the basis of the apparent success of initiatives undertaken or expanded by his government, including Fome Zero (literally Zero Hunger), and Bolsa Família (Family Grant), both welfare programs for the very poor. Lula has taken advantage of this to claim that Brazil represents a model for the developing world to follow, and to push his Brazilian choice for heading the UN's FAO.

In addition, Reuters launched a piece arguing that Brazil is poised to become a big deal in cotton and corn, in addition to soy, in which it is already the world's second exporter as a result of China's incessant demand. The article notes that there are technical impediment to reaching this goal, including the eternal infrastructure problem (such as clogged roads and ports), but also fertilizers, which for some reason are not an industry in Brazil. But in the medium term, high prices of these crops are leading farmers to invest in more acreage in the Brazilian savannah.

The analysis suggests that it will take time for Brazil to become a significant player in exporting these crops. But if it does, the addition of two more large exports means more diversification in the country's economy and further cementing of Brazil's status as a new leader in agriculture.

Petrobras sponsors parties, for some reason

In the neighboring city of Jaguarari, Brazilian oil giant Petrobras is sponsoring the famous São João festival. São João is a celebration specific to northeastern Brazil. In the old times, it was a harvest festival. Traditionally, it involves eating certain seasonal foods (oranges and peanuts, in addition to odd parts of the goat) while listening to forró music. Now, it involves wearing a straw hat and listening to music that is nominally forró, but in actuality is mostly (incredibly loud) pop songs about women's underwear, with an accordionist accompaniment. Anyway, the question I wanted to ask was: why is Petrobras sponsoring the party?

The answer is probably politics. Jaguarari is run by the Worker's Party, which also rules at the federal level. Although Petrobras is publicly traded, the Brazilian government is the largest shareholder and the company is accordingly subject to political whims. This means that the company can be used to manipulate politics. In the case of Jaguarari, it seems like it would be tempting to use Petrobras to sponsor parties that will make Worker's Party politicians look good and help them hold onto power. 133 cities in the state of Bahian are benefitting from Petrobras largess this year.

Petrobras is known to engage in politics. According to a recent Reuters article, Petrobras's stock has declined of late supposedly as a result of suspicion of political interference. Politicians rely on big companies of this type to create jobs. The social benefits they create are important for politicians to make sure it looks like they are running the economy well. In certain situations, the long-term health of the compnay and the needs of politicians may collide. When they do, Brazilian politicians almost surely win out.

Book Review: The New Brazil by Riordan Roett

Blessed are we lovers of books about Brazil in English, with both The New Brazil and Brazil on the Rise having come out around the same time in 2010.

But do you need to read both of them?

Having just done so, my answer is: probably not. I enjoyed doing so, partially because reading much of the same information twice in many cases helped me to absorb more of it (I am finally getting the dictators from '64-'85 straight: Castelo Branco, I forget the second one but I know it has "e" between the two last names, Medíci, Geisel, and I forget the last one again. But it's better than it was!). Of course, I could do that by reading the same book twice. And maybe some people can only afford one book. As a result, I am ready to announce the winner. And it is: Brazil on the Rise.

The New Brazil isn't bad. It's a bit longer than Brazil on the Rise, which gives it more time to discuss Brazil's history in more detail, which I certainly appreciated; Brazil on the Rise goes through Brazil's history at an incredibly fast pace. The New Brazil is more dedicated to politics and the Brazilian economy (there are none of the obligatory sections on soccer and carnaval), and I expected the book to seem more sophisticated and leave me feeling like I know a lot more about these things than Brazil on the Rise. But it didn't.

The major issue, I think, is that Larry Rohter, the author of Brazil on the Rise, is a long-time journalist in Brazil. Therefore, he is not only a very experienced writer and good at saying a lot with few words, but he also seems to have spoken to several important people in every important area of political, economic and social life in Brazil. Riordan Roett, on the other hand, is a... (wait while I look this up, because I have no idea)... professor of political science. He is clearly a smart guy. He has certainly read a lot. But his book is more clinical, with no personal touch. The book could have been written by someone who reads a lot and has never left the US, which is definitely not true of Rohter's book And though I figured that wouldn't matter to me before I read the book as long as the information was good, upon finishing it I find that the clinical approach was far less memorable.

The approach matters. Roett goes through Brazil's development in chronological order. Rohter organized his book into a number of arguments. In one section, he is claiming that Brazilians are wrong when they say their country is not racist. In another, he is questioning Brazilian strategy with their newfound oil deposits. He challenges and debates every step of the way. Roett is content to mostly provide a description of where things are going and why. It makes for a good reference, but not a great read.

Juazeiro and Petrolina: intro

About two hours north of where I live are two mid-sized cities separated by the mighty São Francisco River. One, Juazeiro, is in my state of Bahia, and the other, Petrolina, is in Pernambuco. My first introduction to them was unpleasant; Juazeiro is the home of the Federal Police station where I am periodically obliged to turn over various documents and fees. My original foray into Petrolina was made to get a stamp on the copy of my passport that the courthouse in Juazeiro refused to provide. The cities are dry, flat, fairly ugly and significantly hotter than where I live.

In the year 1867, fellow traveler Captain Sir Richard Francis Burton, on post as a diplomat from Britain, also visited Juazeiro during a voyage along the length of the São Francisco. His evaluation of the budding attempts at developing the region’s agricultural potential: “Grape growing will hardly be possible in this climate where the hot season is also that of the rains. The same bunch will contain ripe, half ripe, and unripe berries which make a good vinegar.”

Today, despite Burton’s prediction, the Juazeiro/Petrolina region is the country’s largest exporter of fruit, including 95% of grapes and mangoes. The region has established a (terrible Brazilian) wine industry. And despite the many strikes against these cities in terms of climate and location, Petrolina in particular has become very attractive to young people. Young students that I taught English to love to visit – it has a real mall (the only one within hundreds of kilometers) with a movie theater, as well as a McDonald’s. And the economic opportunities for adults are plentiful as well, making Petrolina one of few cities in the Brazilian interior that sees more people immigrating than leaving. And it is all, apparently, due to intelligent use of irrigation.

Movie Review: Lula, The Son of Brazil

This movie is a bit old already, having come out in the beginning of 2010. Nevertheless, I recently found myself recalling it, and asking myself, "Why did I hate that movie so much?" I was inspired to ramble in this blog while looking for an answer.

It’s not because I hate Lula. I became a pretty big fan after I read about him in the book A Death in Brazil as a college student, before he became president. These days, I might consider his accomplishments as president to be a bit overrated – but certainly not enough so to explain the revulsion I experienced while watching this movie. And besides, plenty of people that hate Lula liked the movie.

The acting might be part of it. But not necessarily because of the actors themselves. The actor who plays Lula’s father, is pretty terrible here. Yet, he comes across to me as an excellent actor in other films I’ve seen him in. It may be related to the fact that the role he plays mostly calls for him to stagger, bottle in hand, after Lula (in his boyhood form) and try to hit him, while bellowing “You can’t study! You have to work! You have to worrrrrrrrrk!” The mom has a similar lack of depth, though she is the polar opposite. Most of her utterances seem suspiciously designed for posterity, and are mostly very brief monologues about how she takes care of her own children (despite being poor!) or bromides about work first, fun later.

But even then, there are plenty of movies that have shallow, two-dimensional characters but that I enjoyed anyway. Like High School Musical II.

The plot, perhaps? Now we are getting closer to the mark. The story is told as a series of vignettes from Lula’s life, starting with his birth in Northeastern Brazil, jumping to his journey south to São Paulo, then to his childhood as an outrageously cute orange seller in São Paulo, them to the time that he had to borrow a jacket to get into a movie theater, then to the time his house flooded, then to the time he passed a test to become a trainee as a lathe operator, then to the time…. ZZZZZZZZZZZ

There in rarely a compelling reason for a scene to exist other than to show that “this really happened”. However, for perhaps the first time in movie history, a film has managed to show objectively pretty interesting information in a way that becomes less interesting than the same information written on a piece of paper.

The film is thin on conflict. Lula himself resolves his “conflict” with his father by moving out of bottle’s reach of him early on in the film. His relationship with his mother and other family members is perfect. Every negative element in his life, if the film is to be believed, is completely exogenous. Challenges come in the form of very evil people (his father and the police under the influence of the dictatorship), floods, childhood poverty, dictators, disease and death. And Lula can overcome all of this because his mother taught him to be pure of heart.

Tellingly, the film ends after the formation of the Worker’s Party, but before he becomes further involved in politics, and long before his history of presidential campaigning. The conflicts in his life that I am most curious about, regarding the moral and philosophical compromises he had to make to go from leftist radical out of power to a president that maintained intact the economic policy of his predecessor once in power, are conveniently left out, as are the scandals that plagued the end of his first term. In the end, Lula gets the same treatment as his parents – he is reduced to just about the most easily understood essence possible. The problem is that he is a fascinating, complex, and difficult to understand phenomenon.

What’s left? A series of out-of-context telenovela scenes that create a myth about how a poor Brazilian can go the distance by listening to mom. A good recipe for popular success in Brazil I suppose, but not a good movie.

Review: Brazil on the Rise by Larry Rohter

It might not be a good sign when you find that one of the things the author of the book you just bought is most known for is making a fool of himself in a debate with Hugo Chávez supporters. But good books about Brazil in English are few and far between. For the most part, they are severely handicapped by the need to explain very basic things to the public, meaning that anyone that wants to read more than one book about Brazil will be forced to read and re-read endlessly the same information about how Brazilians like the beach and samba music (notably, two things that I have almost never seen or heard in the last couple of years in the interior of Bahia).

Nevertheless, I greatly enjoyed Larry Rohter’s Brazil on the Rise. Written as an introduction to Brazil, it still assumes a reasonably sophisticated reader, and by looking for interesting takes on familiar subjects it not only held my interest helped to give me a clue to just how little I know about the country. Symbolic of this is the section on soccer, which I considered skipping entirely under the assumption that it could not avoid being utterly boring. But happily, after getting the inevitable comparisons to sex out of the way, it dives into enough ugly things – corrupt refs, basically enslaved players, and outrageously arrogant star players – that provided real insight into Brazilian society.

Though clearly passionate about Brazil, Rohter is frank in his appraisals of various aspects of the country, and the book reads as much as a criticism of Brazil as an explanation of its recent rise. The most satisfying parts for me were those that showed that the author, a former New York Times Bureau Chief in Rio, is just as befuddled by certain aspects of Brazilian culture as I am. Chief among these are:

His take on the tendency of Brazilians to agree to make insincere commitments, whether in political promises or for social events – “It is as if the declaration of an intention to perform an act is the same thing as actually doing it…”. In a similar vein, I’ve long considered that there seems to be a greater than normal confusion between image and content in Brazil. This is on display at events like opening and graduation ceremonies in schools, where promises to improve the world with education and, above all, love, will frequently be made with no interest in the many practical issues at hand (“How exactly is one person’s personal sense of love going to change the world?” and “shouldn’t we be more worried about the fact that most people in this room are graduating but still can’t write a paragraph in their native lanuage?”). Also interesting is that Rohter’s quote above is part of a discussion of the Brazilian constitution. In the United States, the Constitution is a fairly literal and succinct description of rights and the structure of government, in which almost every word (and comma placement) is of crucial importance. Brazil’s sprawling monstrosity of a constitution, on the other hand, is an exercise in national fantasy in which Brazil confuses itself for Sweden. The result is that it doesn’t matter much if a law is unconstitutional, because Brazil is incapable of guaranteeing all the rights it proclaims. A good example is the minimum wage, which, as a friend pointed out to me (since I would not be crazy enough to try to read it on my own) is currently unconstitutional – the Constitution claims that the minimum wage must be enough to house, clothe, feed and educate a family, requiring a minimum wage of around R$2,000 per month according to some measures, while the current minimum wage is currently R$545.

The hypersensitivity of Brazilians to foreigners’ designs (or what Brazilians think are foreigners’ designs) of their country – Rohter spends a fair amount of time on this subject and it makes for good reading. Apparently it got it’s start in the 1960s when France’s de Gaull apocryphally claimed that Brazil was “not a serious country”, and ever since it has been difficult to convince Brazilians that other countries are not conspiring to steal their wealth and territory. I was especially happy to see that a preposterous scam that was sent to me by e-mail a few years ago got a mention. A friend of mine wanted to know whether a certain rumor was true, and e-mailed me an attachment that purports to be part of an American geography textbook about the Amazon, which includes such text as “The value of this area is unable to calcule, but the planet can be cert that The United States won’t let these Latin American countries explorate and destroy this real ownership of all humanity”. The gist, of course, is that the US is the real owner of the Amazon is the US, not Brazil. I don’t remember what I responded, but it probably included a great deal of disbelief that anyone would believe such a clearly fraudulent document, and assurances that the English in the text is clearly written by a Brazilian and could not possibly appear in any American classroom. Rohter helpfully traces this type of garbage back to a military industrial complex that sees the need to pose imagined outside threats as a justification for its own existence on the one hand, and to cast logging, mining and other activities that threaten the Amazon as patriotic duties on the other. And the Brazilian public, long suspicious of any foreign activity in Brazil, has eaten it up with all the chowderheadedness of an American “Drill, baby drill” campaign. Another thing I might have mentioned to my friend was that Americans largely don’t care enough about Brazil to spend so much time scheming to weaken their sovereignty. But as Rohter explains, this is equally problematic, playing into an inferiority complex that he expands on in detail.



And in the case of inferiority complexes, the book also performed well during Rohter’s analysis of the development of Brazilian foreign policy in recent years. Though Brazil has claimed much success in foreign policy in recent years, with “south-south” partnerships to create a multi-polar world, Rohter paints foreign policy as Lula’s big giveaway to the leftists he disappointed by maintaining Brazil’s market economy upon taking power – a safe trade, since only intellectuals care much about foreign policy anyway. Rohter argues that, despite having a first-rate diplomatic service, the political craving to be taken seriously as a great power has led to overreach and poorly thought-out maneuvers on Brazil’s part, especially its naivety in believing that it could so easily produce better results than developed countries in Haiti and Iran. Even more entertaining is the boondoggle of Brazil’s attempt to win a seat on the UN Security Council, in which Brazil worked to help China gain entry into the WTO (thereby ensuring a flood of cheap products to put São Paulo industry out of business) only to see China immediately veto the big for the Security Council on account of Brazil’s alliances with India and Japan. It’s heartening to see that the US isn’t the only country that commits such strategic catastrophes, though at least Brazil’s don’t cripple its economy…

Along the way, Rohter also makes a strong and convincing case that Brazil has a racism problem. This is not as easy as it sounds given the propensity in believing otherwise among many Brazilians, including the elite – and characteristically, reviews of the book by Brazilians on sites like Amazon tend to criticize this chapter as the result of Rohter being American.

In discussions of the economy, Rohter becomes less critical. He notes Brazil’s extraordinary achievements such as balancing its international trade and diversifying its energy sources, especially through sugarcane ethanol, as well as the pioneering success of companies like EMBRAER and EMBRAPA, both of which are too important to cover briefly here. Especially interesting is the discussion of the recent sub-salt oil discoveries, which promise to greatly advance Brazil’s development. Rohter appears to believe that Brazil has the institutional structure to handle the influx of oil wealth without becoming a basket case like most other oil-dependent countries, and is generally optimistic about the prospects for Brazil to continue the fast rise of recent years, despite some challenges to overcome along the way.

For me, the book perhaps falters the most in discussions of culture. The section on Brazilian authors was especially uninteresting, since it consisted basically of a partial list of cannonical Brazilian authors with basic information that could be easily obtained through a Google search. If anything, the defining feature of Brazilian literature is that there is so little of it. In Brazil, the average citizen reads one non-school book per year and functional illiteracy rates flourish. On top of this, I found myself a bit irritated on the Rio-centricity of things. This book (along with most others about Brazil) would let you believe that everyone in Brazil listens to Bossa Nova, which is emphatically not the case in Bahia, and in fact I have never heard it outside of the occasional telenovela soundtrack. I would rather explore the reasons why so much of Brazil’s artistic output remains of such low quality (Paulo Coelho, almost everything on TV, arrocha music) rather than beat the same dead horse about the cannon of respected authors from the past. And in any case, the discussion seems peripheral to the theme of "Brazil on the Rise" since the history of Brazilian authors provides no argument either for or against the country's advances.

In the end, the book illuminated countless things for me despite my intermediate knowledge of the country, and was entertaining from start to finish. There is another recently released book on Brazil out, called “the new Brazil”. I hope to take a look and see which one is better soon enough.

Dilma launches "Brazil Without Misery"

Brazil’s governing party at the federal level, the Worker’s Party, has long trumpeted the economic gains of the poor in the last decade. Oft-cited statistics show that 28 million Brazilians emerged from poverty and 36 million become formally considered part of the middle class (a closer look at these stats and other statements by the government here will be a project for another day, though it’s undeniable that many millions of Brazilians have joined the consumer class). Much of the gains have been attributed to the success of conditional welfare programs that started in the 1990s and were rebranded and ramped up in the last decade. These gains were major reasons for Lula’s incredibly high popularity ratings as he left office in 2010.

So if it’s worked pretty well so far, why not add some more? Yesterday, Brazil’s Federal Government launched a new program entitled “Brazil Without Misery”, the stated intent of which is to eliminate extreme poverty in the country, defined as people living on under R$70 per month (16.2 million Brazilians, according to the most recent census). To accomplish this, the program is to be allotted an annual budget of R$20 billion, though this figure includes R$16.5 billion that was already going to be spent on Bolsa Família anyway. So what exactly is new about the proposal?

The extra money will, in large part, go towards reaching more people. Bolsa Família currently serves 12.9 million people. If there are 16.2 million people living in extreme poverty, then there are millions of people that qualify for Bolsa Família but are not receiving it, and getting them on the payroll means expenses on actively finding and registering the additional families that have been picked up in census data but not in the Bolsa Família. Payouts will also be increased, in part because families will be able to receive payment for up to five children, when previously the limit was three, which alone is expected to increase coverage by 1.3 million people.

In addition to payouts, Brazil Without Misery includes payments to families that participate in environmental activities and technical training in areas like recycling, as well as a program to build cisterns to help meet basic water needs for thousands of rural families.

Finally, the package includes programs to incentivize small farmers. Though agrobusiness is booming in Brazil, small farmers in the Northeast have been in stagnation or decline relative to the rest of Brazil. The program for small farmers includes low-interest loans and the implantation of technical teams to help farmers increase yields and get their products to market, as well as a program in which the government preferentially purchases the produce of small farmers (to be distributed in hospitals, schools, and the like).

All of this is packaged on the program’s web site by the Federal Government along with a few key propaganda points: that welfare is not just handouts, but a way to increase consumption and thus develop the internal market; the government is a friend to the little people, the Northeasterner, the farmer; “Brazil grew because poverty was reduced” (rather than the other way around…).

So will it actually eliminate extreme poverty? But it’s notable that the investment in the program is already bigger than the gap the government is trying to close – R$20 billion per year for 16.2 million people comes to R$103 per person per month. Simply passing that amount on with administrative costs of one-third or less than the total would allow Brazil, on paper, to say there was no more extreme poverty in the country. And note that this is assuming that the average monthly salary for everyone considered extremely poor (that is, with a monthly salary of less than R$70) is R$0, when for all I know it is R$65. The project also expects to see additional spending from state governments. From that point of view, the short-term prospects for at least a huge propaganda victory seem pretty positive.

A more long-term question would be, will the attempts to invest in the productivity of the extremely poor work? Here I’m a bit more skeptical. There must be hundreds of programs that involve petty recycling of plastic bottles in Brazil, and though a surprising number of people make their living from this, it seems dismaying that there isn’t a more promising career for the extremely poor to train for. I also don’t know whether the small rural farmer in the dry northeast is better off doubling down on his investment with government subsidies, or if this is an unviable activity that is going to disappear anyway in coming generations.

Brazil desperately needs better education, but this is a generational battle, and there is almost no realistic chance for Brazil to provide a meaningful opportunity for most of today’s extremely poor.

I have no idea whether the plan will really work, but I look forward to seeing what happens. More on this later as things develop.

How big is mining in Brazil?

Mining is a huge topic and I’ll only be able to scratch the surface and try to get an idea of just how big mining is in Brazil to start.

Depending on where you go, the importance of mining is easy to see. I traveled around the state of Minas Gerais last November, and mining activity was happening absolutely everywhere (an unemployed tour guide on my bus was happy to point out each example of mining activity we passed). Mining is important and growing fast in Bahia, though it isn’t as obvious from the window of a bus. Perhaps Brazil’s most well known company is Vale, a mining giant that was privatized in 1997 and went on to acquire other mining companies the world over. President Dilma reached the national stage as Minister of Mining and Energy, before switching to Lula’s chief-of-staff.

The ministry of mining and energy provides a nice easy-to-read statistical synopsis of the Brazilian mining industry (though the latest version available is from 2009, with the latest data being from 2008). It cites the GDP of the mining industry at US$ 16.5 billion, or 1.05% of the nation’s total GDP in that year. Mining products are an important export as well, helping produce the foreign trade surplus that Brazil enjoys. Here go a few 2008 statistics for mining as well as mining together with the “mineral transformation” industries, which produce things like steel and fertilizer (M + MT means “mining plus mineral transformation”).



Notably, mining’s share of GDP since the 1970’s has fallen from around 7% to between 4% and 5% today. Without researching it further, I attribute this more to the development of other areas of the economy than to poor performance of mining.

The combination of mining and mineral transformation also accounted for over 1.2 million formal jobs in Brazil in 2008 (I would like to compare this to the size of the national economically active population, but this statistic is only available for selected cities).

Aside from being fairly huge, the mining industry is growing fast. Mining exports grew over 30% in 2008 and employment in the sector grew 8%. A more updated tidbit from the Mining Association claims that mineral production grew 67% (!) in 2010 compared to 2009, reaching US$ 40 billion after a slight decline in 2009 due to the international crisis (I’m not sure to what degree this figure might be influenced by the declining dollar). Over 7,000 mining companies currently operate in Brazil, and investments by major companies are increasing.

The synopsis also provides the major mineral products in order. Here go the top exports by value. You can see the importance of the iron industry in Brazil relative to other minerals.



Unfortunately, that’s all for today. More later!