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2-Plants: Brazilian Ministry of Environment protests approval of GM cotton

                                  PART I
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TITLE:  Brazilian ministry protests approval of GM cotton
SOURCE: SciDev.Net, UK, by Luisa Massarani
DATE:   24 Mar 2005

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Brazilian ministry protests approval of GM cotton

[RIO DE JANEIRO] A ruling made last week in Brazil has authorised the
planting and sale of a strain of cotton that is genetically modified to
resist attack by insect pests.

The decision, taken by the national technical commission for biosafety
(CTNBio), was met with objections from the Ministry of Environment.

A statement issued by the ministry on 18 March says the decision goes
against the precautionary principle, and contravenes Brazilian
environmental legislation and the Cartagena Protocol on biosafety -- an
international agreement that seeks to protect biodiversity from the
potential risks of introducing genetically modified organisms.

The ministry says CTNBio's decision was based on unpublished studies,
adding that the risks of growing GM cotton have not yet been assessed in
a Brazilian setting.

CTNBio issued its approval for the US-based Monsanto company's GM cotton
'Bollgard' to be planted and sold, less than a month after Brazil's
National Congress approved new biosafety legislation (see Brazil says
'yes' to GM crops and stem cell research).

The legislation, which allows Brazilians to grow and sell GM crops that
have been approved by CTNBio, has yet to be signed by Brazil's president
Luiz Inácio da Silva.

Previously, the responsibility for approving GM crops was shared between
CTNBio and the ministries of agriculture, health, and environment.

CTNBio ruled in favour of allowing the GM cotton by 11 votes to one, on
17 March. The single objecting vote came from the Ministry of the Environment.

In an identically split vote, CTNBio also approved the import of 370,000
tons of GM corn from Argentina, to be used as chicken feed, on 22 March.

Jairon Nascimento, executive secretary of CTNBio, told SciDev.Net that
both decisions were made according to the council's normal operating

                                  PART II
-------------------------------- GENET-news -------------------------------

TITLE:  Brazilian cotton farmers facing loss on 2004-05 crop
SOURCE: Delta Farm Press, USA, by Forrest Laws
DATE:   29 Mar 2005

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Brazilian cotton farmers facing loss on 2004-05 crop

WASHINGTON -- Brazilian cotton farmers may be basking in the glow of their
victory over the U.S. cotton program in the WTO, but any celebrations are
being tempered by the grim price outlook for cotton.

"A lot of growers have not fixed their contracts for their 2004-05 crop,"
said Chris Ward, a cotton farmer from Rondonopolis in Mato Grosso,
Brazil. "They have fixed costs, but they don't have many sales on their

With prices seemingly stuck around 38 to 40 cents per pound, fob port or
industry, when he spoke at the USDA Agricultural Outlook Forum in
Washington, Ward said many Brazilian cotton producers are looking at the
possibility of a 20-cent-per-pound cash loss when they sell cotton this year.

"This has been a difficult year for us," said Ward, a native of New
Zealand who has been farming in Brazil for 28 years. He's growing about
6,000 acres of cotton this season.

"Last November, our grower association put out a projected cost for this
year of nearly $1,800 per hectare ($740 per acre) which was the highest
of all time. We were looking at $1,400 to $1,450 per hectare last year,
so it's gone up $350."

Ward said input costs have typically been higher for cotton farmers in
Brazil, but the decline in the value of the U.S. dollar has widened the
gap. The exchange rate has decreased from 3 to 3.4 to 2.70 real to the
dollar since last year.

Higher interest rates remain a problem for Brazil, which was plagued by
inflation rates of 20 to 30 percent per year for many years (vs. the
current rate of about 6 percent).

"Just this last week our central bank lifted the interbank interest rate
-- the prime rate, as you folks would say -- to 18.75 percent per annum,
which gives us the most expensive interest in the world," he noted. "An
overdraft for a Brazilian farmer, if he doesn't have some sort of pre-
financing, can run 3.5 percent to 4.5 percent per month."

In 2003-04, Brazil produced 5.7 million bales of cotton and consumed 4.1
million bales, leaving almost 1.6 million bales for export.

Nearly 90 percent of Brazil's cotton is produced in the Cerrados region,
an area in the central and western parts of Brazil that encompasses what
Ward calls Brazil's "Midwest" states.

Until the 1970s, Brazil relied on its southern states for most of its
primary crop production. But as those areas filled with people and farms
and as land became more expensive, Brazil's farming began shifting
northward to the Cerrados region.

The Cerrados, the Brazilian word for savannah, contain about 530 million
acres -- about 25 percent of Brazil's total national territory. From 60 to
70 percent of that 530 million acres could be used for agricultural and
beef production. As with most savannah climates, the region receives most
of its average rainfall in six months and is dry the other six.

The climate makes the Cerrados region ideal for cotton production, said
Ward. Many farmers plant soybeans in November, harvest them in January
and follow the beans with cotton in February -- all during the rainy
season. They harvest cotton during the dry season.

"We feel that we do have a long-term stability and a long-term future in
cotton in Brazil for a number of reasons," he said. "First of all, our
rainfall and climate tend to coincide with the cotton production cycle.

"Water is set to become a major commodity, and our ability to produce
natural fibers with rainfall will give us an advantage over regions that
have to rely on irrigation. And it generally does not rain in May, June
and July when we are harvesting our crop, so that also gives us a certain
amount of advantage."

But Brazil "loses out" compared to other countries when it comes to
production costs, he said. Brazilian farmers enjoyed gross margins of $80
to $155 per acre, depending on yield, in 2003-04 when cotton prices were

"Unfortunately, our costs this year have risen by more than 23 percent
due to the fact that inputs have gone up. Farmers believe that the input
manufacturers like the fertilizer people and the chemical people looked
at our balance sheets and said we could afford a bit more this year."

With inputs rising and the revaluation of Brazil's currency pushing costs
to about $740 per acre this year, "if we don't produce at least a three-
bale crop it will be very difficult to be profitable with cotton this year."

The salvation for many of Brazil's farmers since the mid-1990s has been
the productivity increases in the Cerrados. "That's how we've survived,"
said Ward. "We've had more losses than profits some years. But the main
thing that has kept us in business is our productivity. We've lifted
ourselves from about 1,400 pounds in the early 1990s to about 3,400
pounds of seed cotton for top growers last season."

Many farmers are anticipating a reduction in yields for this year's crop.
"We've had excessive rains in December and January," said Ward. "And we
were delayed in planting because it took longer to get going because of
the rain."

Because of the Cerrados climate, farmers can plant cotton or soybeans
from early November into January. They can also plant cotton after
soybeans when market prices warrant and take advantage of the nitrogen
left behind by the soybean crop.

There are downsides to the longer planting window, however. "The
Brazilian grower associations have put planting caps on planting dates
because of the boll weevil eradication program being conducted in Mato
Grosso," he said. "In Bahia, they are limiting planting to the end of
February for the same reason."

Brazilian cotton farmers use mechanized harvesters and most other forms
of technology, he said. "We do not manufacture cotton pickers; we have to
import them all from the United States, but the rest of the cotton
machinery is manufactured in-country."

Many growers have on-farm gins. "Some of these gins are 50 years old,
having been manufactured in Brazil back in the 1950s. But farmers
refurbished them and got them going again."

One of the biggest hurdles Brazilian cotton farmers face is
transportation. "To get our cotton to the mills or ports from Mato
Grosso, we have to ship it 1,000 to 1,300 miles," he said. "The newest
expansion area for Brazilian cotton is in the state of Bahia, which is
close to many of the textile mills."

Ward believes many problems in the world cotton market could be solved by
increased consumption. That's especially true in Brazil where the
domestic mill use of cotton has been relatively flat in the last 10 years.

Last year, synthetic fibers accounted for 25 percent of Brazil's mill
consumption with the remainder made up of cotton, wool and other natural
fibers, he said. Cotton's share of the market in 2003-04 was down about 3
percent from the previous year.

"We as an industry will have to make an effort to increase cotton
consumption. This is a priority of the Mato Grosso Cotton Growers
Association because we all know that in a country like Brazil you must
increase the consumption of cotton if we are to remain in business."

Ward said he would talk about the subsidies issues "because I'm probably
going to be asked about them." He said subsidies do distort the world
market, as the Brazilian government claimed in its WTO case against the
U.S. cotton program.

"But the main thing about them is that they don't tend to finish up in
the farm sector. In the long term, subsidies finish up in the hands of
the non-farm sector of the economy. I understand the anguish in the world
from the effect of subsidies and non-market influences on private
production. And it's something that we in the world are going to have to

The world's cotton farmers will receive a greater return in the long term
from promoting consumption "rather than fighting over other people's
products," he said.

"We've got to convince countries like those in Europe and Scandinavia and
regions that have a lot more money in their pockets that they can do a
lot more for rural development if they consume more of our product."


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