Fabio Ramos: Agrosuisse Ltda

Planeta Organico interviewed Fabio Ramos, Director of Agrosuisse Ltda., a consulting company for the Agricultural and Agro-industrial areas that has been active in the market for over 23 years. Fabio Ramos wil be in Nuremberg, during BioFach 2006, checking the latest trends.
 
Planeta Orgânico: What are the Possibilities of Investments in Brazil within the Organic Sector?

FR – Brazil has arisen as the world’s largest food exporter in several sectors in the last 4 years.  In the conventional food production chain in Brazil, there are some sectors that show technical and economic viability. I believe that the organic food chain can be successful, especially in relation to the foreign market; the factor that suggests this is the viability of some sectors of the conventional food chain. Examples: The meat chain, in which we have advanced production technology. We have today all the processing and packaging knowledge necessary. 

The meat chain is a good example due to the viability it has shown in the last 3 years, when Brazil became the largest meat exporter in the world. With the creation of marketing and production networks and alliances, Brazil has developed know-how in the meat marketing and sales area, both in the domestic and foreign markets. I do not mean just quantity, but especially quality. Sales of Brazilian meat increase in the foreign market, as a direct relation with the technological capacity the country has to offer. Today, the meat chain is viable as production, processing and sales.

The development of the organic meat chain can be carried out in Brazil by making technological adjustments very close to conventional meat technology, due to the possibility of production, grazing and management of cattle in a natural way. Brazil could also become the largest organic meat exporter in the world. This production network for organic meat in Brazil is still in its infancy. Demand in the international market is far greater than world supply. Argentina, Australia and Uruguay, which would be large organic meat exporters, will not be able to meet European demand for organic meat. This is one example, it is an opportunity for Brazil.

 
Planeta Orgânico: How is Brazil faring in the Fruit chain?

FR - Brazil is one of the world’s largest fruit producers. However, it does not occupy the position that would be justified by its output. One example is Chile, whose area is much smaller than Brazil’s, but which exports more fruit than we do. Some fruit, such as tropical fruit, already have a well-developed system of organic production and are technically viable. Economic viability is linked to the development of the market for organic fruit, which is still very much at the beginning. 

The fruit market is related to the guarantees and safety offered to the purchaser, with the result that the European consumer feels sure that he is consuming a safe Brazilian food product. We should remember that at the end of this chain there is a demanding, well-informed consumer. The purchaser will seek what the consumer wants. Food safety and quality are fundamental to the consumer.

 
Planeta Orgânico: What initiatives could the government offer to the organic food sector in order to support this leap to the image of the largest organic food producer in the world?

FR – The issue of regulations based on the law will allow Brazil to occupy an outstanding position in the international scenario of the organic universe, just as is already the case with conventional food. 

We have an important posture on the part of the Ministry of Agriculture. An Agro-ecology Coordination area was created, which should grow in importance and occupy a strategic position in the drawing up of Multi-year Plans and Annual Budgets and, as a result, ensure the foreign market an effective policy at the Ministry of Agriculture. Consequently, purchasers would have greater confidence in a dialogue with the Brazilian market.   

At the Ministry for Agrarian Development, work is being done in promoting agro-ecology and organic agriculture, in which small and medium-size family farming prevails; Brazil should carry on this process of putting together these networks and all the support for the certification process, enabling these small producers and family farms to make their produce competitive and to place these products in the sales channels. 

Finally, the Ministry for the Environment should place the development of agro-ecology on its agenda as a strategic factor in fulfilling the most important mission of the Ministry, which is the preservation of our country’s natural resources through respect for the environmental legislation.

Organic agriculture – agro-ecology – is a great ally of the Ministry for the Environment, so I think that this Ministry should adopt a position like that of the Ministry of Agriculture and the Ministry for Agrarian Development, with agro-ecology as a strategic factor within it, considering that agro-ecology, by its very rules, has the direct mission of preserving the environment.  

Minister Marina Silva knows that, and it is only a matter of posture in the year 2006 in order to definitively incorporate all this development of environmental services into agro-ecology as a strategic instrument.  

 
Planeta Orgânico: If you had to draw a line for the growth of organic production over the last five years, how would you see this evolution in numbers? How do you see the growth of organic Brazil?

FR – Five years ago, in Brazil, we could not say that we had 100,000 hectares of organic area. Possibly much less than that. Three years ago, we already had an indication that Brazil had reached the 800,000 hectares mark. With this number, Brazil is now placed as a highlight in the world scenario, considering that the biggest country in organically cultivated area, Australia, already indicated numbers that reached 8 million hectares. However, in the last two years, according to the census carried out by the Ministry of Agriculture under an agreement with the Ministry for Agrarian Development, Brazil reached 6.5 million hectares.

This figure clearly indicates what is taking place in the country. Those who know the interior of Brazil know that there is a certain change going on in the agrarian and agricultural structure, and this figure points to that fact. Brazil has today – according to the census carried out by the Ministry of Agriculture – 12,600 rural producers already certified; and based on these 12,600, we may extrapolate this up to 50,000 units, because we count on some associations and cooperatives. Brazil, with these two figures, is now the 2nd largest in the country in organic area in the world, overtaking Argentina, which was previously the 2nd largest country; and this places Brazil as the  object of desire of those European investors who see that organic growth in Brazil shows rates  above the world average.  

As we know that the growth of the European organic area is around 10 to 15%, and that the participation of organic food in the totality of these food markets does not go beyond 2% to 2.5%, and we see that the growth rate of Brazil’s organic area is 40 to 50% and it manages to achieve up to 1% in the participation of organic food, we see that in 5 years Brazil has achieved much higher rates than those in Europe, which are rates that have been recorded over the last 10 years. Therefore, Brazil has a much more favorable growth structure than Europe or the USA. Comparatively, I think that only Asia has the same growth potential as Brazil within the organic market.

 
Planeta Orgânico: We will organize an APEX Seminar during BioFach Latin America, entitled “Opportunities for Investment in Organic Brazil”. What would you say to an investor so that he comes to invest in this sector in Brazil?

FR – I would say that he could come expecting Brazil to be a country of opportunity, and that in these last 5 years, it reached professional standards and definitively took on its position as a large food producer. That Brazil has the technology to produce food in a safe, natural and organic manner, which will attend the consumer in the foreign market, and it is guaranteed to be a quality product with high nutritional and biological value – a product that will give confidence to the consumer. And that there are a huge number of financial investment opportunities in Brazil, due even to the fact that we still have, in this country, a stock of 90 million hectares of land available for agricultural and agro-industrial development. Another attractive aspect would be the question of Brazilian agro-industry, which was unquestionably the sector that showed a fundamental professional attitude and that underpins Brazil’s position as a large world food exporter, not only with regard to beef, or poultry (of which Brazil is the world’s number one exporter) but also in the fruit sector, Brazil exports very high quality fruit. With regard to grain, Brazil is also the world’s largest exporter. Based on that, we see that the scenario for opportunities is very great. Brazil not only offers opportunities for the purchase of land but also opportunities in the agro-industrial  sector.

Several agro-industries need investments precisely to deal with the foreign market segment. There’s not so much investment needed in the production and processing areas. Investment is needed in the logistics and distribution areas, which would be very attractive to investors who operate in these market areas, be it in Europe, USA or even in Asia.

 

Planeta Orgânico: When you mentioned the area of Brazil in the latest census carried out by the Ministry of Agriculture, in which Brazil leapt ahead, a lot of people wonder if this leap is exclusively due to the extraction business. How do you see this question?

FR – I think that Brazil has been developing agro-ecological technology for many years. Agro-ecological science is the mother of organic agriculture. In the Northern region of Brazil, where we have 5.5 million hectares using the agro-ecological management system, this science results from a type of work which is a historical fight in Brazil. In the State of Acre, for example, the whole of Chico Mendes’ fight with regard to the question of the rubber extraction business. I believe that agro-ecological production is more than organic production. With all assurance, these areas are certified by international entities. Therefore, when we see an entity such as the FSC certifying Brazilian wood and rubber, plants and fruit from the Amazon region, within the requirements of the European Union rules, we cannot doubt that this agro-ecological production area, this product generated within this process, audited by international entities, is not totally in conformity with the rules of organic agriculture; and the certification of an agro-ecological project for organic agriculture is concluded very quickly, because the technology used is already totally within the principles of organic agriculture. I would not question that. I would question why this census did not expand its operations and does not detect other areas in the North-Eastern region, for example, where we have a type of agriculture being done, which is biodynamic. These are areas that are not included in those 6.5 million hectares. These areas are today being managed by a producer of the semi-arid region. They are distant areas that are very often not significant for the foreign market. Therefore, you do not yet have the structure of this food chain, such as the case of this example I mention in the North-East. These products, often coming from a natural agro-ecological and biodynamic system in the North-East, have not been incorporated into the food market chain. Because the logistics for this product is more difficult, this producer needs greater support. The agro-industrial segment is not ready in the North-Eastern region. We have to introduce a professional attitude and give this North-Eastern product a finish in order to achieve the same technological standard, the quality and safety that a product from the South and South-Eastern regions offers the foreign consumer. 

I would say that Brazil has a larger area within the agro-ecological system than 6.5 million. It is necessary to make these data official, to get the endorsement of the Ministry of Agriculture and the Ministry for Agrarian Development and the participation of the certifiers that operate in our country, so that we can safely state correct numbers. I do not doubt that the next yearbook of FIBL, a Swiss entity for research and promotion of organic agriculture throughout the world, will show that Brazil has 6.5 million hectares and certainly next year we may be publishing data showing Brazil’s real position. And the issue of regulations putting the law into practice will help a great deal in that respect, because the data will have to be centralized at the Ministry so that we can be sure of how many hectares we have and how many producers there are in the Brazilian agro-ecological and organic system. 

 
Planeta Orgânico: Can we say that 2006 is the right year to invest in the Brazilian organic sector?
FR – With the issue of the regulations, which represent the rules of the game, Brazil will give confidence to new investments in the organic food sector. In addition, with all the revolution taking place in the country, where we have many rural producers – large, medium and small – changing their production systems to agro-ecology and organic agriculture, Brazil is going to be increasingly attractive for these investments. Those who know the interior of Brazil are noticing the transformation that has been occurring in various regions. This transformation represents a change in the model of producing food and offering it to the market, a fact that is increasingly evident in the international market. There are many possibilities for investment in the Brazilian organic food chain, from the production of raw materials to the sale of food in various market segments. Brazil is without doubt a large food producer and has been consolidating its position as a quality food producer, a fundamental factor to attend the purchasing markets.

 


 

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