Economy Politics

The Paradox of Agribusiness Abundance

The Paradox of Agribusiness Abundance

"Throwing food away is throwing person away"

Pope Francis

The Lula government announced on Tuesday the Plano Safra 2023/2024, worth more than R$ 360 billion. One of the biggest in history. The size of the new plan is a nod to the ruralists, a sector that is not sympathetic to President Lula. The program foresees: subsidized interest rates, mechanisms to curb commodity price fluctuations, and differentiated interest rates based on good environmental practices. But it says nothing about food waste.

According to the Ministry of Agriculture and Cattle Raising, the new Crop Plan aims to stimulate the sustainable production of food and low carbon farming. Most of the amount should be destined to funding and commercialization. Another part should be destined to investments. The program is also aimed at family agriculture and small producers. In other words, the government invests heavily in food production, but this does not reach the 33.1 million people in the country who still go hungry.

The Brazilian agribusiness is undoubtedly a world case of technological success. The highlight is the increase in rural productivity which, in turn, depends on three essential production factors: land, labor and capital - the latter including machinery, equipment, fertilizers and chemical pesticides. The IPEA (Institute for Applied Economic Research) shows that in the 45-year period (1975-2020), the labor factor fell at a rate of 0.42%, while the land factor increased by 0.04% and the capital factor grew by 0.84%. In other words, Brazil became one of the largest agricultural producers in the world, mainly through investments in productivity. The econometrics says that productivity is responsible for almost 90% of the growth of total production in that period, and this higher productivity is due to technological modernization.

Why then is there still hunger in Brazil?

Thus, the question remains: Why then do millions of people still go hungry in the country? And why does agribusiness still fight with the environment, with the MST and with the indigenous peoples for more land, if technology has proven to be more efficient?

The answer to the first question is basically due to the low investment of agribusiness in the reduction of food waste. The answer to the second question must be sought in politics, because agribusiness entrepreneurs are thirsty for more land (land = power), and for government subsidies, and the government still invests too little in the education and technical preparation of small producers.

In December 1994, Folha published a special section with the headline "Hungry Brazil throws food away". The article, written by Bruno Blecher, shows the shameful numbers of food waste from farm to plate, a paradox of a country plagued by hunger. There are several other studies and researches about the loss of food in Brazil and in the world. Despite the numerous warnings, food waste grows every year.

Brazil is part of the top 10 countries that waste the most food in the world. According to a recent article by the same Bruno Blecher, about 35% of all Brazilian agricultural production goes to waste. According to FAO (Food and Agriculture Organization of the United Nations), 1/3 of the food produced worldwide is wasted. This wasted food consumes ¼ of all water and land used in agriculture and occupies an area the size of China, and is responsible for 8% of global greenhouse gas emissions.

The 10 million tons per year wasted in Brazil would be more than enough to feed the 33.1 million people who do not have enough to eat every day in the country, according to Rede Penssan (Brazilian Research Network on Food Sovereignty and Security and Nutrition). According to projections by Embrapa (Brazilian Agricultural Research Corporation), of the total food waste in the country, 10% occurred during harvest, 50% in the handling and transport of food, 30% in the supply centers, and 10% between supermarkets and consumers.

The study "The Food We Throw Away - Causes, Consequences and Solutions for an Unsustainable Practice", conducted by MindMiners in partnership with Nestlé, shows that only 4% of food companies have never discarded food, reusing it in a correct way. Among the 96% who said they discarded food, 54% said they always or frequently discarded it.

Professor Rattan Lal, winner of the 2007 Nobel Peace Prize and the 2020 World Agriculture Prize, has calculated that the world is already producing enough food to feed 10 billion people (the global population forecasted for 2050), but there is a lack of action to reduce food waste.

Food waste is an issue that worries even Pope Francis, who in September 2022 said, "... throwing food away is throwing person away" and the Supreme Pontiff continues, "In the world there is food necessary so that no one goes to bed hungry. The question, without a doubt, is one of social justice, that is, how the management of resources and the distribution of wealth are regulated. For the Pope, the entire international community should mobilize to put an end to the unfortunate paradox of abundance.

Understanding this issue is essential. Farmers have in their favor the technological development, which brings productivity gains in their crops. Assisted by public policies and huge financial subsidies, they have had large margins and profits in their activities. Therefore, it becomes imperative to demand from the private sector a strong and effective program to combat food waste, with continuous inspection, because there is no greater paradox than this in the country.

About Author

Maurício Ferro

What do soccer, wine, law, politics, and economics have in common? Much more than you can imagine. And contrary to what the popular saying says, they can and should be debated and analyzed, yes. Welcome to Maurício Ferro's site, a channel to create and exchange thoughts and opinions. Maurício Ferro is a lawyer, graduated from PUC university in Rio de Janeiro, with a Master's degree and specializations from universities such as the London School and the University of London. He studied OPM at Harvard Business School. Author of published works in the commercial and capital markets areas, and acting in the Board of Directors of large companies, he based his legal and executive career with a focus on Business Law. But his passion goes beyond the corporate world. A passionate Flamenguista, Mauricio knows the ins and outs of the professional world of soccer and other sports. He is a partner in innovative companies such as 2Blive, a global startup focused on technological solutions to fill the education gap, especially in areas of great need such as Africa. He also invests in the Flow Kana company, based in California, and focused on the scientific production of cannabis for various purposes, such as medicinal, clothing production, or recreational use. To all these ingredients, add a deep knowledge of wine and the delicious ways of winemaking. That is the recipe for what you will find here.

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