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BUSINESS & SEEDS: Explosive advance of transgenics in Brazil



                                  PART 1


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TITLE:  EXPLOSIVE ADVANCE OF TRANSGENICS

SOURCE: Latinamerica Press, Peru

AUTHOR: José Pedro Martins

URL:    http://www.lapress.org/articles.asp?art=5758

DATE:   27.11.2008

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EXPLOSIVE ADVANCE OF TRANSGENICS

Lula´s government promotes genetically-modified organisms despite social opposition.

Brazil is home to one of the world´s largest areas of genetically-modified seed cultivations with 15 million hectares in 2007. The greatest increase of these crops occurred under the government of President Luiz Inácio Lula da Silva, despite growing opposition from Brazilian farmers and environmentalists.

Brazil is expected to surpass its soy-producing neighbor, Argentina in area of cultivated transgenic seeds, to become the world?s second largest producer this year, according to the International Service for the Acquisition of Agri-biotech Applications (ISAAA), a non-profit organization.

The United States ranks first for genetically-modified seed cultivation with 57.7 million hectares in 2007, half the world´s transgenic farmland.

Between 2006 and 2007, the growth of genetically-modified seed cultivation in Brazil was greater than the increase in the United States. Brazil had sown 3.5 million hectares of GMOs, equivalent of 30 percent of its GMO farmland, compared with 3.1 million hectares´ increase in the United States.

ISAAA says the expansion of GMO farming in Brazil between 2006 and 2007 was only less than in India, where the GMO area increased from 3.8 million hectares to 6.2 million hectares, or 63 percent.

Transgenic boom

More genetically-modified products have been authorized under Lula´s administration than any other government. The first was transgenic soy by agricultural giant Monsanto, which entered the country in 1998 under the 1994-2002 government of President Fernando Henrique Cardoso.

The other authorizations mostly took place under Lula, when the National Biosafety Technical Commission, or CTNBio, was reorganized. The CNTbio was once the seat of strong opposition to transgenics, but gradually changed its stance, and in 2008 alone, approved seven of 12 licenses approvals since it began working 10 years ago.

?The CTNBio has authorized transgenics in a worrying manner for the health of the population and the Brazilian environment,? says Mohamed Habib, head of the Community Affairs Department of the State University of Campinas, and one of Brazil?s staunchest critics of GMOs.

The first change within the CTNBio dates back to March 2007, when it lowered the commission´s quorum requirements for votes on genetically-modified products.

But it did not come without opposition.

In October 2007, the National Sanitary Surveillance Agency and the Brazilian Environment and Renewable Resources Institute, or IBAMA, a branch of the Environment Ministry, sought to block the approval of transgenic corn MON 810 by Monsanto at the Biosecurity Council, an inter-ministerial body.

They argued that the approval of MON810 for commercial use in Spain, Argentina and the United States, and other countries, had caused the contamination of conventional corn varieties with genetically-modified corn and led to social and economic problems.

?The lack of segregation, identification and effective procedures led to the contamination of conventional varieties with transgenic varieties,? they said.

But the Biosecurity Council, voted in favor to authorize this corn in February of this year, regardless.

Biodiversity and health risks

According to the Advisors and Services for Alternative Agriculture organization, or AS-PTA, MON 810 poses a list of 10 problems, including the fact that the Brazilian government did not carry out environmental studies to figure out whether there were any possible risks to the country´s ecosystems should the seeds be sold in the country.

Habib says the Brazilian government, and the CTNBio in particular, are not taking precautions that are recommended by scientists and environmentalists around the world.

?The path they are taking is mistaken and dangerous, exactly what happened with the agrotoxins that were presented as the solution for farming, and are today recognizably harmful,? Habib says. ?The use of agrotoxins has even increased with the use of transgenics, unlike what its defenders´ say.?

According to IBAMA, between 2000 and 2004, the use of glyphosate, an agrotoxin used widely for transgenic soy, increased by 95 percent in Brazil, as the area of soy grown jumped by over 71 percent. In the state of Rio Grande do Sul, home to the country´s largest area of transgenic soy, glyphosate use increased 162 percent and the area grown by 38 percent.

In May, Sen. Marina Silva left the Environment Ministry she headed since 2003, sparking speculations that her departure was related to a series of disputes with Lula, including on the authorization to transgenic seeds.

The same day she left her post, Lula was being denounced in Bonn, Germany, during a meeting of Cartagena Protocol´s members, by six civil society organizations from Brazil. A report signed by Greenpeace, AS-PTA, Tierra de Derechos, The Organic Agriculture Association, the Brazilian Consumer Defense Organization and the National Association of Small Farmers said that Lula´s government had not implemented measures to avoid threats to biodiversity by failing to demand studies on the impact of transgenic corn on the country?s health and environment.

In June, a month after Silva´s departure, the Biosecurity Council again met to discuss a new request to ban transgenic corn. The government granted CTNBio the power to rule on whether to allow transgenic products. Shortly afterward, its members approved transgenic LibertyLink cotton from Bayer CropScience and transgenic corn varieties from Syngenta and Monsanto.

Defenders of transgenics are also present in Brazil´s legislature.

On Oct. 16, on World Food Day, Dep. Luis Carlos Heinze, of the GMO soy-producer Rio Grande do Sul state, presented a bill in Congress about the labeling of genetically-modified products in Brazil.

The current law states that all products with more than 1 percent genetically-modified components must be labeled. A ?T? is printed within a yellow triangle T to indicate ?transgenic? ingredients. According to Heinze?s project, the symbol would be removed.



                                  PART 2

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TITLE:  IN BRAZIL, CREDIT TO FARMERS DRIES UP

SOURCE: The Wall Street Journal, USA

AUTHOR: Lauren Etter

URL:    http://online.wsj.com/article/SB122792036438265797.html

DATE:   29.11.2008

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IN BRAZIL, CREDIT TO FARMERS DRIES UP

The global credit crunch is slowing Brazil?s roaring agricultural sector -- at a time when more food, not less, is needed around the world.

A steep drop in global crop prices and rising costs of farm supplies, combined with tighter credit, are causing the slowdown in one of the world?s fastest-growing breadbaskets.

Brazilian farmworkers are starting to plant this year?s soy crop. Falling commodities prices, increased production costs due to the dollar?s appreciation against the real, and dramatic reductions in credit availability have hurt farm economies, largely dependent on soy production for export.

Many Brazilian farmers had hoped a booming grain market would help them dig out of debt and become more competitive with American farmers, long the global leaders in farm productivity. But now, strapped for cash, Brazilians are reducing the size of their crops and even forgoing debt payments.

The farm-belt slowdown could drag on the Brazilian economy, which had been boosted by robust agricultural exports to China and other emerging economies.

In the past several years, amid surging global demand for grain, farmers plowed up land at a feverish pace to plant soybeans, and roads were carved into the countryside to move the goods. Climbing grain prices through the first half of 2008 accelerated the growth.

Now, growers are finding it harder to get loans sufficient to cover the rising costs of fertilizer, pesticides and seed. For those borrowings, growers rely heavily on a handful of multinational grain companies, including Archer-Daniels-Midland Co., Bunge Ltd. and Cargill Inc.

Unlike in the U.S., where farmers depend on loans from private banks and the government, Brazilian farmers get as much as 40% of their financing from agriculture companies. That could drop to as low as 25% this year, according to M.V. Pratini de Moraes, a former Brazil agriculture secretary.

As the volatile commodities market and the global financial crisis have increased the risk and expense of doing business in Brazil, big grain companies are reining in lending.

?Every company is trying to secure as much cash as it can [to withstand] the longer-term effects of the credit crisis,? says Stefano Rettore, general manager at CHS Brazil, a major grain-trading company. ?That?s leaving less cash available to finance Brazilian agriculture.?

The squeeze is expected to contribute to a 2% drop in Brazilian soybean production for the 2008-2009 crop year, according to the U.S. Agriculture Department. Steve Cachia, a commodities analyst at Brazilian consultancy Cerealpar, says next year?s crop could be smaller than this year?s if credit continues to tighten.

Farm-equipment maker Deere & Co., of Moline, Ill., forecast Wednesday that farm-equipment sales in South America will fall as much as 20% next year, partly due to ?the difficult credit situation in Brazil,? said Susan Karlix, Deere?s manager of investor communications, on an investor call.

Bunge, one of the world?s largest soybean processors, has cut advance cash payments to Brazilian farmers 70% since the end of last year, according to company filings. Bunge, like other companies, makes advance cash payments and loans to farmers in exchange for future delivery of grain.

?Basically, we are being more selective,? said Stewart Lindsay, a Bunge spokesman, ?so as to better manage our working capital on a global level and to be prudent in terms of risk in what has proven to be a volatile price environment.?

ADM, of Decatur, Ill., and Cargill, of Minneapolis, say they have increased the overall amount of credit available to Brazilian farmers. Still, farmers say the loans aren?t enough to cover their rising costs.

Private financing for farmers has fueled a rapid growth in agriculture and infrastructure in Brazil?s central-west region over the past decade, helping the country become one of the world?s largest agricultural producers. Today, Brazil is the second-biggest producer of soybeans after the U.S. and accounts for a quarter of world soybean production.

Brazilian farmers have accumulated large amounts of debt over the years following a spate of poor crops and unfavorable exchange rates in the early 2000s. That debt load is making it harder for many farmers to take out new loans.

The total cost to produce the three main crops in the state of Mato Grosso -- soybeans, corn and cotton -- is expected to increase 42% this year over last, says Michael Cordonnier, president of Soybean & Corn Advisor, a consulting firm in Illinois.

Now many farmers are rationing fertilizer and other supplies to save money. That could translate into lower yields.

Farmers also are forgoing debt payments to free up cash. More than 100 pieces of farm machinery such as tractors and combine-harvesters have been repossessed by banks in recent days in Mato Grosso, Brazil?s top soy-producing state, says Glauber Silveira, president of the Mato Grosso Soy Growers Association, known as Aprosoja.

?Tony Danby contributed to this article.


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