The geopolitics of Brazilian soybeans

Abstract

Soybean plays a major role in the development of Brazilian agribusiness, and in turn in Brazilian geopolitical power as well. It is a pillar of Brazil's insertion into a ‘new multi-polar world order’ as basis for much Brazilian land ownership in neighboring countries, for the extension of political influence in Africa, and it is especially important for balancing trade with Brazil's new primary commercial partner, China. Yet the US dollar and North Atlantic transnational companies still control global soybean markets and production technologies. In a context marked by booming but volatile commodity prices, food crises, riots and revolutions in food-importing countries, a global rush for farmland, and severe droughts and climate change, the soybean agribusiness in Brazil takes on new and crucial geopolitical significance. I trace the geopolitical role it has served in consolidating the ‘green revolution’ in Brazil, and raise questions about the intersection between agroindustrial markets and currencies: could agricultural commodities serve geopolitical functions (and thus contestation) similar to those ‘petro-dollars’ have served since the 1970s? These considerations show how the political ecology of soybean shapes and is shaped by inter-regional and global-scale processes, and reveals new directions for research on the emerging geopolitical landscape of our century.

Keywords:

• globalization
• multipolarity
• agribusiness
• flex-crops
• commodity markets
• reserve currencies

Acknowledgements

I would like to thank Julie Klinger, Greg Thaler, two anonymous reviewers, the participants of the American Association of Geographers Annual Conference 2013 and the participants of a symposium at the Federal University of Goiás who provided valuable feedback on earlier versions of this paper.

Notes

¹There are notable exceptions, of course, especially within the recent ‘land grab’ literature (e.g. Wolford et al. 2013). Yet as I argue in my contribution to that special issue (Oliveira 2013), the ‘land grab’ framework is insufficient (and often inadequate) to capture the agroindustrial dynamics and geopolitical significance of these developments, especially in places such as Brazil and China, where domestic agribusinesses are becoming increasingly more powerful (cf. Oliveira and Schneider forthcoming; Sommerville, Essex, and Le Billon 2014; Wilkinson 2009).

²‘The expansion and industrialization of grain and oilseed production and the expansion and industrialization of livestock production have been mutually reinforcing: … increasing livestock populations were not only about increasing value-added opportunities in animal flesh, milk, and eggs, but were also about transforming structural grain and oilseed surpluses from a deflationary millstone into a steadily growing source of low margin earnings for large-scale farmers, processors and traders’ (Weis 2013, 73).

³Between 1941 and 1966, soybean acreage in the US increased by more than 500 percent, while production increased almost 800 percent, providing soybean meal for livestock feed much more cheaply and at a larger scale than ever before (Boyd 2001).

⁴The ‘cheapness’ of this meat production is in fact very deceiving, resting on an illusion of efficiency that ignores enormous state subsidies in the US and western Europe, and obfuscates even more dramatic social and environmental costs that are ‘externalized’ (Cavalett and Ortega 2010; Steinfeld et al. 2006; Weis 2013).

⁵Funding for Embrapa-Cerrados (CPAC) came from the federal government's Development Program for the Cerrado (POLOCENTRO), which also financed road improvement, rural electrification, grain storage units, land clearing, production, commercialization, capital goods acquisition and harvest expenses in the Cerrado (Jepson, Brannstrom, and Filippi 2010).

⁶Three stages have since been implemented in Cerrado regions, which have benefited 758 farmers, settled in 21 projects across seven states, producing mostly grains over a total area of 353,748 hectares (MAPA 2002). Currently, negotiations are stalled over a projected fourth stage that would expand the program into the Cerrado-Amazon transition zones of Maranhão, northern Mato Grosso, Rondônia and Pará, establishing an additional 60 settlement projects over an additional 41,000 hectares (Jepson, Brannstrom, and Filippi 2010), most likely because the focus of Japanese–Brazilian agroindustrial cooperation has shifted to Mozambique, with the ProSAVANA program discussed below.

⁷Like Marini (1972), I use the term ‘sub-imperialism’ to designate a state practice of extending political and economic power beyond its borders, while remaining relatively subordinate to a greater imperialist power in the broader political and economic context.

⁸‘Brazilian governments have consistently emphasized that Brazil's foreign assistance is an alternative to traditional donor relations, with their hierarchical treatment of the recipient. Brazil has instead sought to go beyond hierarchy and national interests by emphasizing the language of “partnership” and “collaboration” … . At the same time, Brazil's provision for technical cooperation has been related, though often indirectly, to its broader foreign policy objectives [such as] opening and consolidating markets for Brazilian goods and services’ (Inoue and Vaz 2012, 530).

⁹The Group of 20 developing countries established at the WTO in 2003 under the leadership of Brazil, South Africa, and India; not to be confused with the Group of 20 major economies.

¹⁰Brazil, Russia, India, China and South Africa

¹¹‘Water grabs’ and their articulation with agroindustrial and geopolitical interests must also consider the dredging of rivers and waterway infrastructure construction for agribusiness exports (e.g. Mamone 2007).

¹²‘A major obstacle to agricultural expansion in recent years has been the rise in the local currency, the Real. Although a stronger Real results in cheaper inputs such as imported fertilizer, chemicals and machinery, it makes Brazilian farmers less competitive on the international market and cuts into already-tight profit margins. Soybeans provide a clear example of the impact of currency variations on competitiveness. When the Real was devalued at the end of the 1990s, making Brazilian products more competitive on the global market, the area planted to soybeans expanded rapidly, peaking in 2004. When the Real started to strengthen in 2003, the expansion of soybean acreage halted. (There is a lag between the decision to plant, which is influenced, among other things, by currency expectations, and the actual planting. Since 2007, acreage has increased again despite the strong Real as a result of factors such as vibrant demand from China and low corn prices)’ (EIU 2010, 12).

¹³It is more accurate to address the politics of ‘grain-dollars’ rather than ‘soy-dollars’ alone, since all soybean producers also rotate their production with other crops such as maize, cotton and wheat, and the major transnational input and trading companies that control soybean technologies and trade also deal in maize, wheat and other grains.

Additional information

Notes on contributors

Gustavo de L. T. Oliveira

Gustavo de L. T. Oliveira is a PhD candidate in the department of geography at the University of California, Berkeley. He researches social and ecological transformations in the Cerrado region of Brazil, the international soybean complex and global agroindustrial restructuring. His dissertation analyses the political ecology of Chinese investments in Brazilian agribusiness and logistics infrastructure. He is a member of the Land Deal Politics Initiative and the BRICS Initiative for Critical Agrarian Studies. He can be reached at: [email protected]