RESTRICTED Report No

RESTRICTED Report No. PA-52a

Public Disclosure Authorized This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Public Disclosure Authorized

AGRICULTURAL SECTOR SURVEY

BRAZIL

(in four volumes)

VOLUME III Public Disclosure Authorized ANNEXES 11 THROUGH 18, AND STATISTICAL ANNEX

August 19, 1970 Public Disclosure Authorized

Agriculture Projects Department

TABLE OF CONTENTS

Page No.

VOLUNT I (MAIN REPORT)

PREFACE ...... SIt-!ARY ...... iv

I. THE RECENT PERFORMANCE AND OUTLOOK ...... 1

Output and Exports ...... 1 Sources of Growth ...... 5 The Resource Base ...... 7 Forestry and Fisheries ...... 9 The Northeast ...... 10

II. PRICE AND COST FACTORS ...... 12

Land ...... 12 The Price of Farm Finance ...... 14 Taxes ...... 15 Product Pricing and Marketing ...... 17 Input Prices and Distribution ...... 19

III. PUBLIC EXPENDITURES ...... 21

Grain Storage .... 21 Land and Water Development ...... 21 Research ...... 23 Extension ...... 25 Seed Production and Multiplication ...... 27 Transportation ...... 28

IV. CRISIS IN COFFEE? ...... *... # ...... 30

The Outlook for Supply ...... 30 Irrigation ...... 31

V. THE RURAL UNDERPRIVILEGED ...... 33

The Demand for Labor ...... 33 Land Tenure and Tenancy ...... 35

VI. GOVERNNENT ORGANIZATION AND DEVELOPMENT PLANNING . 38

The Public Servicesrto Agriculture ...... 38 Planning ...... 39 Preinvestment Studies ...... 40

ANNEX 11

CROPS OTHER THAN COFFEE

This Annex discusses some of the more important technical and economic phenomena which affect the outlook for higher yields and expanded output of the main crops.

Maize

Maize accounts for about 9 percent of the gross value of agricultural production, occupies some 9.5 million hectares or 25 percent of the total cultivated land, and is grown in all states. Minas Gerais, Sao Paulo, Parana, Santa Catarina and Rio Grande do Sul provide 65 percent of the total maize area and more than 70 percent of the production. The crop is normally grown rainfed in upland areas as a single crop, with yields ranging from about 850 kilograms per hectare in the northeast to over 1,500 kilograms per hectare in the center south. Production has increased from an annual level of slightly above nine million tons in 1961-1964 to over 12 million tons in 1967-1968 (drought in 1969 caused reductions in yields). Growth in output has been achieved largely through expansion of area cropped. This will continue in some states, but high yielding varieties and improved agronomic practices, notably sole cropping with closer spacing and fertilizer, are becoming more important.

The demand for corn for feed for the expanding poultry and pig industries has been strong, and will continue to grow rapidly. The pig industry, presently extensive and lard-oriented, will shift to more efficient meat-type hogs and intensive production methods. This could lead to a reduction in the price of pork relative to beef and a stronger demand for pork. This means an increased domestic demand for maize.

Maize exports averaged US$27 million (540,000 tons) per year in the 1965-1967 period. A major constraint on exports has been inadequate storage and handling facilities in main producing areas and at the ports. These inadequacies have led to sharp seasonal and inter-year variations in the price of maize, and have greatly retarded maize expansion. Given improvements in these bottlenecks, it is feasible to increase maize area from the 1968 level of 9.5 million hectares to 10.2 million hectares in 1975 to 11.2 million hectares in 1979 or 1980. This is a 17.5 percent expansion in the decade. The average yield can be raised from 1.5 tons per hectare to 2.2 tons hectare by 1980 if efforts are intensified on research, seed production and extension, particularly in the south of the woodland savannah region. 1/

_/ See Richard Wheeler, Production and Export of Corn and Rice in Brazil - Prospects for the 1970's, U.S. Department of Agriculture, Foreign Agricultural Economic Report No. 54, September 1969. ANNEX 11 Page 2

Rice

About 7,0 percent of the output of 6.7 million tons in 1968 was produced in Minas Gerais, Sao Paulo, Goias, Parana and Rio Grande do Sul. These states accounted for 70 percent of the 4.5 million hectares planted to rice in that:year. The state of Maranhao in northeast Brazil produced over 700,000 tonsion some 550,000 hectares (13 percent of the total national area under rice')., Rice area increased from two million hectares iii 1950 to 4.5 million h,ectares in 1968. This is almost wholly responsible for the increased.output. Rio Grande do Sul uses irrigated lowland gsolls for rice; elsewhere,,~Production is mainly rainfed. In Rio Grande do :;ul, average vields i-ncredsed from two tons to about 2.8 tons between 1950 anld 3968, but in other areas they have remained at between 1.2 and 1.5 tons per hectare. Upl-and varieties responsive to fertilizers are lacking, and rice is often planted as the first crop on newly cleared land, witlhout fertilizer and with. poor husbandry practices.

Brazililan plant breeders have not yet developed high yielding rice varieties, despite the importation and testing of a wide range of genetic material. i4lore intensiv:e agronomic renearch efforts are required, along with agro-economic studies to determine optimal cultivation te,zh- niques. The problems are severe. For example, in Rio Grande do Sul, poor water control, drainage and the grass weed hold yields down. The soils are heavy cracking clays and after one or two years of rice the only economic means of controlling grass weeds is by extensive cattle grazing. After several years the grass weeds are then sufficiently reduced by in- terspecies competition to permit another crop or two of rice. This system could be much improved by replacing the present tumble-down weed grass fallows with short term, planted grass/legume pastures fertilized with superphosphate. Research along these lines is essential.

Another aspect of the outlook for rice involves the Pantanal area of Mato Grosso. Promising results are being obtained by farmers using low cost pump irrigation in the Pantanal where there are large areas of river flood plains and climatic conditions apparently suitable for double cropping with rice. The area may have interesting possibilities for large-scale rice production projects.

On balance, there are prospects for considerable increases in rice production and exports in the next ten years. Area can increase from about 4.5 million hectares in 1968 to 4.95 million hectares in 1975 to about 5.2 million hectares in 1980. Yields can be increased by greater intensity of cropping in established areas, by heavier use of fertilizer and other inputs, and perhaps by opening up highly productive areas under low cost irrigation, as mentioned above. These developments could result in an increase in average yields from the present 1.5 tons of paddy per hectare to 1.8 tons per hectare in 1975 to 2.3 tons per hectare in 1980. The supply available for export would then be 600,000 tons in 1975, and 1.9 million.tons:in 1980 (probably worth about US$190 million). ANNEX 11 Page 3

Beans

In 1968, with over 3.5 million hectares in beans (mainly Phaseolus Spp.) and a crop of 2.4 million tons, all for the domestic market, Brazil was the world's largest producer and consumer of beans. Production increased about 4 percent annually over the period 1950-68, mainly owing to expanded plantings. Beans are cultivated in association with other crops, especially maize, and generally are poorly tended. Yields are around 700 kilograms per hectare. Studies of crop associations and the establishment of economically optimal levels of manuring for the associated crops are needed. New varieties are likely to be resisted by consumers, but nonetheless merit emphasis.

Groundnuts

over 90 percent of area and production, estimated at 653,000 hectares and 770,000 tons of nuts in shell respectively in 1968, is in the centre south states. Area sown has increased at less than 3 percent annually since 1950, all in the north and northeastern regions, where average yields are about one-third of the 1,000 kilograms level reached in Minas Gerais, Sao Paulo and Parana. Almost all the crop is crushed to produce oil for domestic consumption, but a substantial proportion (estimates vary from 45 to 90 percent) of the meal and cake byproducts is exported.

The Secretariat of Agriculture of Sao Paulo reports that profit from groundnuts has remained at a high level relative to other crops, including coffee, for the past 10 years. In 1968-69, for example, at over US$115 per hectare, groundnuts were six times more profitable than soybeans, even though the latter is expanding rapidly. As noted below, the growth in soybeans may be explained in part by double cropping of wheat and soybeans; but little wheat is grown in Sao Paulo, and in this state the area in groundnuts declined from 560,000 hectares in 1966 to 490,500 hectares in 1968, compared with an increase in soybeans over the same period from 12,300 to 29,200 hectares. A partial explanation of the stagnation in groundnut acreage may be that processors do not encourage the crop because of the need for decortication before oil extraction.

From an agronomic viewpoint, expansion of groundnuts is attractive in the light soils of the agreste zone in the northeastern states, in association with maize, beans, cotton and manioc. Given application of phosphate (containing sulphur), yields of 1,000 kilograms per hectare of nuts in shell are quite feasible there under small farm conditions. The crop is comparatively easily mechanized, using animal draught. Suitable equipment for cultivation and harvesting could be tested under Brazilian conditions from the wide range in use for other crops. Improved varieties could also be selected from sources having similar soil and climatic conditions. ANNEX 11 Page 4

There are also thought to be good prospects for groundnuts in the Pantanal of Mato Grosso where plantings by a few large-scale farmers have given promising results. In this area, improved varieties developed at the Institute of Agronomy at Campinas should be tested, and agronomic practices and cropping sequences devised for use with conventional tractor-powered equipment. If large-scale development is feasible, processing should take place locally, the oil being shipped out to consumption centres and byp-o- ducts utilized in cattle enterprises in the are>.

Sesame

Sesame is not an im'tSrtant crop. it is worthy of consideratien, however, particularly for the higher rainfall areas of tile agreste zone of the northeast and Goias where soils and climate appear suitable. New multi- locular varieties developed in India and the Middle East have yield poten- tials under rainfed conditions of about 1,000-1,500 kilograms per b2ctare in these countries. At these yields and 1968 prices, gross returns to Brazilian producers of about US$1J80 per hectare might be expected. Problems requirina so'lution include veryetal selection, cime of p!-rln3. sacSng, response to fertili l?, pest Eand vise2se control a Suif eble 'rop;r .^5 sequences. Scale of cultix'ation is also important becatu-e shattering and loss of seed may result from conventional methods of mechanical harvesting. Assuming the technical feasibility of the crop, studies of its economic aspects would be an essential prerequisite to promotion.

Oil Palm

Production averages about 9,000 tons per year, mainly from natural groves of sub-spontaneous Dura types in the coast south of Salvador in Bahia. The Instituto de Oleos of the Ministry of Agriculture has been researching oil palm since 1959, assisted by IRHO, a French research agency with extensive experience in oil palm development. The Instituto has helped establish some 2,000 hectares of commercial plantations and rehabilitate 1,400 hectares of indigenous trees in the State of Bahia, and to install an experimental project in Para and one in Amapa.

Yields from wild palms average 1.5 tons hectare ha of fresh fruit bunch (ffb) at 12.5 percent oil content. Under present conditions, planted improved palms probably will not yield more than nine tons ffb per hectare at 17 percent oil content. Existing and planned processing capacity is more than adequate for present plantings and wild palms at current yield levels.

The federal government coordinates all work on palm through its national development plan for oil palm (PLANADE), and proposes to increase the area of planted palms by 15,000 hectares (Bahia: 8,000 hectares; Para: 3,000 hectares; Amapa: 2,500 hectares; and Amazonas: 1,500 hectares). The planting material will be of the Tenera variety (originally from Africa). Production is intended only for the home market, where the price is about US$300 per ton, approximately double the present world price. This domestic price may go down soon because of increases in the production of groundnut and soybean oils in Brazil. ANNEX 11 Page 5

The Northeast and northern states have areas with suitable soil and climate for oil palm. Pests and diseases are present in wild groves but do not seem to be a major problem. Knowledge of nutrient requirements, particularly on soils with a long history of annual cropping, is lacking; in spite of receiving recommended fertilizer dressings, planted palms have low yields and appear unhealthy. Another problem for the proposed development program is that Brazilian groxwers and technical staff still have to be convinced that the oil palm positively must have care and attention.

TCo expand production successfully will require:

(a) detailed studies of soil and climate conditions in areas proposed for plantations (these have been lacking in areas planted to date);

(b) a review of available data and additional field trials to establish nutrient requirements for optimal yields, particularly on land which is inherently suitable for oil palms but which has been subjected to prolonged annual cropping, as in Bahia;

(c) a study of management practices, particularly plantation maintenance, in other producing countries; a reappraisal of the recommended practices in Brazil; and the issuance and extension of new, proven guidelines to Brazilian planters.

Castor

Area and production of castor beans increased at somewhat less than 3 percent per annum in the past three years. Production in 1968 was 370,000 tons. Bahia and Pernambuco produce about 45 percent of the national output and Sao Paulo and Parana together about 30 percent. The crop is frequently interplanted with sisal in the Northeast; practices are often poor, no fertilizer is used, and yields average about 1.2 tons of beans per hectare. In the centre south, yields are still lower, averaging about one ton per hectare. New varieties developed at the Agronomic Institute, Campinas are not widely used.

If world market prospects are determined to be favorable, the crop merits promotion in the Northeast, using improved planting material and grown as a sole crop (not interplanted with sisal). In the centre south, it is probable that crops like maize, cotton, groundnuts, and soybeans suited to the mechanized farming methods already in use will provide severe competition for castor beans. 1/

1/ See'U. S. Department of Agriculture, Foreign Agricultural Circular, Fats, Oils, and Oilseeds, March, 1970. ANNEX 11 Page 6

Citrus

Oranges are grown on about 173,000 hectares, and production was about 13.5 billion fruit in 1968. About 70 percent of production comes from the centreesouth states of Minas Gerais, Sao Paulo, Rio de Janeiro and Rio Grande do&Sul which serve the large urban populations in this region. The surplus is exported as fruit and juice. Exports of fresh fruit declined from 120,000 tons in 1960 worth US$6.1 million to 77,500 tons worth US$3.1 million in 1968. In contrast, exports of orange juice have gone up, and reached 30.000'tons worth US$11.6 million in 1968.

The Agroulomic Institute, Campinas, in the state of'Sao Paulo has solved many of the technical problems- facing growers. If product prices are remvunerative, sprinkler irrigation is likely to expand in the main producing areas,. Higher yields and better quality result.

As noted, exports of orange juice have been going up. This trend can be accelerated through increased plantings and irrigation in the centre south where technical production capacity and processing facilities exist. Exports of '-z-Ice and fresh fruit could move from US$15 million in 1968 to US$25 million in 1975, and to US$33 million in 1980.

Bananas

Brazil is probably the largest producer of bananas in the world, and almost all is consumed locally (small quantities are exported to Uruguay and Argentina). It appears that Ceara, Pernambuco and Bahia in the North- east and Minas Gerais, Espirito Santo, Rio de Janeiro, Sao Paulo and Rio Grande do Sul in the centre south are the predominant areas of production. Exports totalled 176,000 tons worth US$5.6 million in 1968. Most of the output comes from small farms, poorly managed, using unimproved varieties and getting low yields and a product of poor quality. Some areas have Sikatoka and Panama diseases. Exports cannot go up much unless productionm, packaging and handling are improved.

Grapes

Official statistics for 1968 show an area of about 72,000 hectares and production of 500,000 tons. Over 70 percent of the area and production is in Rio Grande do Sul, with most of the rest in the other states of the centre south. Most of the grape crop is used for wine for local consumption, but there is.a growing interest in table grapes to meet the lucrative domestic market. Table grapes are grown mainly in Sao Paulo and Parana on small holdings as part of intensive fruit and vegetable enterprises (often operated by people of Japanese origin). Growers rely heavily on cooperative organizations for supply and marketing services. Planting material of high quality,has been imported by growers in recent years. Skilled management is.required in timing harvests, and pest control measures along with sprinkler irrigation would be useful to help solve the timing problem. ANNEX 11 Page 7

Pineapples

It is said that 225 million pineapples were produced in 1968 from 27,600 hectares. Main production areas are in the centre south, and Paraiba and Pernambuco in the Northeast. The possibility of developing exports, particularly from the northeast, is worthy of consideration, as pineapples may possibly be a good crop for old sugar cane lands. Expansion would require breeding up local varieties of good eating quality to the shape and size necessary for economic processing. Any plans for large scale development cannot be undertaken until much more evidence is available on market prospects and on the agronomic and economic aspects of production.

Soybeans

Soybean production increased from about 107,000 tons in 1955 to a record of 920,000 tons in 1969. The 1969 crop was harvested from 750,000 hectares, mainly in Sao Paulo, Parana, Santa Catarina and Rio Grande do Sul. A large expansion in area under soybeans took place since 1966, largely because of increased double cropping with wheat, and because of diversification out of coffee in Parana and Sao Paulo. Yields have declined in recent years to an average of about 1.2 tons per hectare, mainly because of lack of experience with the crop in new areas. About 315,000 tons of soybeans were exported in 1969 and about 535,000 tons were crushed to meet domestic demand for oil.

Soybeans are planted in December and harvested in April and May. Nutrient needs are known and high yielding varieties are readily available from Government, private and cooperative agencies. Most production is mechanized, and the same machinery is used for wheat. It is reasonable to expect an average yield of 1.5 tons per hectare by 1975 in established areas, and 1.25 tons per hectare elsewhere.

The Government's minimum price support for soybeans has lately been only about 65 percent of the actual farm gate price. 1/ The support program nonetheless enables short- and medium-term financing through the Banco do Brasil and private banks.

Further expansion of the soybean area in association with wheat is probable in Rio Grande do Sul, Santa Catarina and Parana. The two crops are complementary, and research recommendations for varieties, manuring, and time of planting take account of this double cropping aspect. The wheat- soybean rotation has much to commend it on technical and economic grounds. Alternating a gramineous crop with a legume is agronomically desirable, and resources such as land, labor and machinery are more fully utilized. In Sao Paulo and Minas Gerais soybeans can be incorporated in maize and cotton sequences. In association with maize, soybeans can also find a place on land

1/ Minimum prices for the 1970 crop are between NCr 12.00-13.00 per 60 kg. This is 27 percent above 1969 levels but still considerably below current and expected farm prices. ANNEX 11 Page 8

released from sugarcane. Further north, in the basin of Araguaia and Tocantins rivers, the United States Bureau of Reclamation (USBR) has noted that there ard from 10 to 15 million hectares of undeveloped alluvials in Mato Grosso, Goias and Parana. The climate in this area appears suitable for soybeans, maize, cotton and groundnuts. If field trials bear this out, planning to promote a large-scale expansion of plantings should begin. The amount of this expansion will,-depend on comparative returns from alternative crops such as maize, cotton.fand, particularly, groundnuts. But a reasonable target for 1975 is.-at least 1.3 million hectares by 1975. This is 550,000 hectares more than planted in 1969 -- made up of 200,000 hectares (presently single cropped,with wheat) converted to a wheat/soybean sequence, and 350,000 hectares in association with maize, cotton or groundnuts.

The private sector, including cooperatives, will play an important role in soybean-expansion, as it has in the past. The existing development programs of prtivate and public organizations should be coordinated, particularly in Sao Paulo and Minas Gerais. Producer prices should remain at least at their present level-relative to alternative crops, and improvements in marketing should be made, with the savings going mainly to producers.

Cotton

Cotton is produced efficiently in the center'south and much less so in the northeast. Two thirds of'the.national output is produced in the center south, from short staple annual varieties, mainly in Sao Paulo and Parana, where research and extension has resulted in the widespread use of certified seed, fertilizers and insecticides and rapid improvement in yield and quality. Average yields in this area are about 1,000-1,300 kilograms seed cotton per hectare, and 1,350 kilograms per hectare is a reasonable expectation for 1975 through heavier fertilizer use and better insect control. The crop is rainfed and is therefore susceptible to climatic effects which have considerable influence on yields.

In the northeast, cotton is a major crop in the dry tropics (agreste) of Ceara, Pernambuco, Paraiba and Rio Grande do Norte. It is a perennial type, mainly long staple, unimproved genetically, and frequently interplanted. It rarely receives fertilizer or insecticides and is low yielding and of variable quality. Average yields are about 270 kilograms seed cotton per hectare. There is no effective technical assistance. A truly massive effort might possibly raise yields by 15 to 20 percent in five years.

The center south increased its cotton area from about 2 million hectares in 1966/67 to over 2.6 million hectares in 1968/69. This was because farmers are price-sensitive and cotton paid out better than maize, soybeans and groundnuts. The shift toward cotton was also favored by the coffee diversification program (Annex 10). This freed about 1.5 million hectares for crops other than coffee and financed investment in agricultural'processing1facilities, including cotton ginneries and seed crushing ANNEX 11 Page 9

mills. In contrast, the northeast cotton producers have had fewer incentives. Their cropping pattern is less flexible (since the crop is perennial) and they are less sensitive to market forces than the comaercial grower in Sao Paulo and Parana.

Cotton can be sharply expanded if priced favorably. However, strong prices in the export market are not foreseen, and it is possible that returns to farmers in the center south in the years just.tahead may not be as high as in the 1967-1969 period. Given this outlook,, a,feasible output target may be around 650,000 tons of lint in,1975 and 700,000 tons in 1980. This could best be attained by reducing area to the 1963-1965 level of 2.3 million hectares and increasing yields somewhat. In the center south, this'can be accomplished by the already, existing technical assistance services to farmers. In the northeast, the effort through selection and hybridization to improve the yield capabilities of the long staple plant stock must be intensified, and present management practices must be improved through an extension program promoting sole cropping, closer spacing, fertilizer use and control of pests and diseases. This task in the northeast will be difficult, and the return should be weighed against that from promoting other crops such as groundnuts, maize and sorghum.

Closer attention to grading of seed cotton in the field at harvest time is also needed. Ginning firms and Government agencies should get together to improve grading standards and provide incentives for growers to market by grade, with the ultimate aim of installing premium prices for quality. Trade interests and research organizations should agree on desirable staple lengths and quality of fibre, and a cotton consultative group should be set up within the framework of the Ministry of Agriculture's Research Division (EPE). This group should ensure that research objectives reflect the needs of cotton consumers. Wheat

In 1969 the three southern states of Rio Grande do Sul, Parana and Santa Catarina produced 83 percent, 13 percent and 4 percent of the national wheat crop. Wheat output in 1968 topped one million tons for the first time, but the gap between domestic production and consumption is still around two million tons per annum. This is met by imports, principally from the U.S.A. and Argentina. In 1968 wheat imports cost US$182 million c.i.f., the most costly single item on the import list. 1/ To help reduce this drain the Government is trying to expand wheat production. Production declined in the mid-1950's, largely because of bad weather and resulting low yields. Since 1964 production has been increasing slowly in response to incentives to growers and a consequent expansion in planted area and better agronomic practices.

1/ U.S. Department of Agriculture, Foreign Agriculture, December, 1969. ANNEX 11 Page 10

Wheat is a winter crop planted in May and harvested in November, often with soybeans in association. Soybeans are planted in December, after wheat, and harvested in April prior to wheat planting. Farms on which wheat is grown range from 150 to 300 hectares in size. About 75.percent of tne wheat crop is cultivated and harvested mechnically. One of the attractions of the wheat-soybean association is that the same machinery can be used for both crops.

Wheat acreage has increased from an estimated 767,000 hectares in 1965 to over one million hectares in 1969, with yield increasing from 760 kilograms to 1,100 ki-lograms per hectare. Most wheat is planted on soils of high acidity and4free aluminum which require correction by liming and manuring to obtain reasonable yields. This aluminum toxicity problem complicates the introduct-ion of improved varieties with a higher yield potential from other tountries. Other problems are insect pests and stem.rust and mildew diseases which develop rapidly in humid spring weather and can cause crop failure. The crop harvested in 1969 was a record one partly because of increased plantings and improved agronomic practices, but also because the weather reduced the impact of endemic pests and diseases.

So far there has been no "breakthrough" in the new varieties combining disease resistance with high yields, although Brazilian and foreign plant breeders have been working energetically with a wide range of imported genetic material. It appears unlikely that the near miraculous results in Pakistan and India with short strawed Mexican wheats will be repeated in Brazil, but new varieties with a degree of disease resistance and increased yield potential may be produced. This material and more evidence on crop nutrient requirements and other agronomic practices should lead to higher yields.

The Banco do Brasil buys all domestic wheat at a controlled price, equivalent to about US$107 per ton. This is set by the Superintendencia Nacional do Abastecimento (SUNAB) to guarantee a 30 percent "profit" to the farmer in relation to production costs calculated by the Federation of Wheat Cooperatives (FECOTRIGO). Producer prices proposed for the 1969/70 crop assume a yield of 960 kilograms per hectare, a level which was exceeded by at least 10 percent by many farmers in 1969. The Banco do Brasil provides credit for fertilizer and approved seed and, in 1969, refused to finance expanded planting of more than 30 percent over the previous season. Seed distribution is handled by the numerous wheat growers' cooperatives.

Storage and handling of wheat is a major problem, as wheat competes with carryovers of other crops such as rice, maize and soybeans. Off-farm storage capacity belonging to state, federal, cooperative and SUNAB- registered flour mills amounted to about 1.3 million tons in 1969, with an additional 254,000 tons planned or under construction. But facilities are inadequate,, particularly in the immediate post-harvest period.

The Fod' Technology Insitute at Campinas has perfected recipes for admixtures with wheat flour of soya, corn and cassava flours up to 20 percent; these are said to be fully acceptable in the different regions ANNEX 11 Page 11 of Brazil. Government sanction is required for their introduction. The institute has also tested and recommended a dough-making machine which turns out an acceptable dough for bread from the soft wheats grown in Brazil, thus potentially reducing the need for imported hard wheats.

Manioc

About two million hectares of manioc in 1968 produced 29 million tons, with the bulk of output being divided equally between the Northeast and centre south regions. Average yields in major producing areas have remained static at about 16 tons per/hectare over the past 15 years. Research has produced improved varieties resistant to pests and diseases and good information on spacing, times of planting and fertilization. But few apply modern production methods, except in the centre south where manioc is grown for starch and flour. By applying the full package of improved agronomic practices, yields of 30-40 tons per hectare are recorded there.

Manioc will grow on poor soils with little rainfall. It produces more calories per unit of area than almost any other crop. It is thus an important staple food in the densely populated agreste zone of the Northeast.

Potatoes

The five centre south states of Minas Gerais, Sao Paulo, Santa Catarina and Rio Grande do Sul share over 90 percent of the total area and production. In 1968 about 227,000 hectares produced an estimated 1.6 million tons, about 7 tons per hectare. Yields are poor because of nematodes and bacteria diseases against which there are as yet no resistant varieties. A large tonnage of seed potatoes is imported from Holland each year. There is a need for concentrated research to develop disease-resistant varieties, followed by the development of seed multiplication and storage facilities.

Sweet Potatoes

About 2.1 million tons of sweet potatoes are produced from 200,000 hectares in the Northeast and centre south states. The crop is of relatively minor importance and is not expected to develop rapidly.

Vegetables

Most kinds of temperate and tropical vegetables are produced in Brazil, all for domestic use. Production and marketing methods are most advanced in Sao Paulo, where farmers of Japanese origin are prominent in the industry, often working through cooperative organizations (the largest is the Cooperativa Agricola de Cotia, with a membership of over 12,000 and an annual turnover of over US$50 million).

Most vegetable farms range from about 5 to 15 hectares in size, with many in river valleys on both mineral and organic soils. Sprinkler irrigation is increasing, particularly in Sao Paulo where local manufacturers of ANNEX 11 Page 12 the equipment have sales and service organizations. Costs of sprinkler installation vary from US$350 to US$450 per hectare.

In the center south, vegetable production will continue to expand in spite of high prices for lime, fertilizers, machinery and equipment. The lack of medium term credit is a constraint on production, and should be remedied. Private and cooperative processors also need additional medium and long-term credit.-

In other areas, particularly the northeast, farmer training along with better marketing techniques must precede expansion in vegetables.

Rami

Rami (Urtica ulitis) is a perennial fibre plant grown in north Parana. It is-used to make string and sacking for local consumption, and longer fibres (over 1.3 meters) are exported to Japan for use in textiles. In 1968 exports were 4,600 tons valued at US$1.4 million.

Rami is of particular agronomic interest because its dense network of underground stems protects against soil erosion. Erosion is serious on the hilly parts of northern Parana (recently taken out of coffee as a result of the coffee diversification program).

Two or three cuts of rami can be taken each year almost inde- finitely with minimum maintenance. Yields average about 1.25 tons per hectare of dry decorticated fibre. Net returns of about US$80 per hectare are considered reasonable with regular manuring and treatment with insecticide against leaf-eating caterpillars. Harvesting and processing are the major production costs.

Domestic and foreign market prospects require investigation and development. Techniques of decortication, combing , and grading need improvement. Rami should be encouraged in coffee diversification areas.

Sugar Cane

Sugar production and marketing are regulated by the Ministry of Industry and Commerce through its Instituto do Acucar a do Alcool (IA). The Instituto handles the external marketing of sugar. The domestic market is serviced by the private sector. Before the beginning of each crop year the IAA sets milling quotas of centrifugal sugar for both the domestic and export markets.. The quota for each state is allocated to the mills and there are corresponding mill delivery quotas for growers. Cane produced beyond the mill delivery quotas goes either to non-centrifugal sugar production, for molasses and crude sugar, or is left in the field. ANNEX 11 Page 13

In 1968 there was an estimated area of 1.7 million hectares of sugarcane with the bulk divided among the centre south states of Minas Gerais, Sao Paulo and Rio de Janeiro (860,000 hectares together) and the north eastern states, notably Pernambuco and Alagoas with 550,000 hectares. Milling quotas, totaling 4.5 million tons in 1968-69, were divided in the proportion 63 percent to the centre south and 37 percent to the Northeast, with 24 percent of total production destined for export and the balance for domestic needs.

Cane production increased at the rate of 5.8 percent annually in the period 1950-68. An annual increase of 5 percent in planted area occurred in this period. The comparable figure for yield was a negligible 0.8 percent, and this confined mainly to the centre south states.

Prices of cane, raw sugar and crystals are fixed and controlled by the IAA, and are different in the Northeast and the centre south. Cane prices are based on estimated average production costs for each area. Mil- ling costs are estimated similarly and raw sugar prices are equal to the price of cane plus processing costs. The price of crystal depends on the price of raw sugar. In the crop year 1968-69 milling msts were set at the same level in the Northeast and the center south, but cane prices in the former were 30 percent higher, at NCr 17.61 per ton, than in the centre south. According to information obtained from the Brazilian Federation of Planters, the Institute of Agricultural Economics of the Sao Paulo Secretariat of Agriculture, and the Getulio Vargas Foundation, growers in 1968-69 made an estimated profit, including land rent and interest on borrowed capital, of NCr 0.019 per ton of cane in the centre south and NCr 1.069 in the North- east. With current yields, average profits per hectare were thus NCr 1.04 and NCr 47.57 respectively. These estimates may overstate labor costs, since they assume payment of the official minimum wage rates. They also include outlays for fertilizer and lime, which are by no means universally applied. In any event, there are areas under cane today which could probably be farmed more profitably in other crops, and IAA will be under heavy pressure to increase producer prices.

In neither region are conditions ideal for cane., Many fields have uneven topography, often with slopes well in excess of 200, making mechanization impractical. They are often widely dispersed and distant from the mills; this means high transport costs and reduction in sugar content due to delays between harvest and processing. In the north east, the cane land is often low in fertility, owing to several centuries of mono cropping with cane, and little manuring. A redundant labor supply also causes problems in the Northeast. A high proportion of the four million inhabitants of the "Mata" subregion of Northeast litoral work on the sugar estates. To improve efficiency on these estates requires closing and consolidating mills, and taking rough land out of cane. All this adds to a reduction in labor requirements. As little alternative employment is available, acute social and political problems are likely to accompany any effort to grow sugar efficiently. ANNEX 11 Page 14

In 1966 the. Government created a special agency to modernize the sugar industry of the Northeast -- Grupo Especial para Racionalizacao da Agroindustria Canaveira do Nordeste (GERAN), with headquarters at Recife in Pernambuco. It is loosely linked with the Ministry of the Interior through SUDENE but has the president of IAA as chief of its governing council. The land reform agencies IBRA and INDA, cane producers and processing interests are represented on the counsel. Consultants have recommended that about 180,000 hectares of the roughest land be withdrawn from sugar and the remaining area farned more efficiently. The GERAN plan proposed a voluntary conso- lidation of operationrs by plantation owners; and improved cane varietles, fertilizer and other agronomic practices to lift yields from their present average level of about 45 tons to 70 tons of cane per hectare. Government financed settlement schemes for small holders, each having about 20 hectares including 7 hectares of sugarcane, are to be established on the land released by plantations. Diversification into cattle, fruit and subsistence food crops is proposed for land considered unsuitable for cane (largely because of topography).

There are 103 sugar mills with supporting plantations (usinas) in the area covered by GERAN. These require an estimated investment of US$200 million to finance the rationalization measures proposed in the GERAN plan. The usinas must initiate the requests for GERAN action. As of late 1969, only one proposal had reached the stage of being considered for implementation. A second weakness is the reliance on sugar as a major (25 percent) source of income in proposed small holder settlement projects. Cane production from seven rainfed hectares is unlikely to be very efficient and, while it may be desirable initially to provide new settlers-with a crop to which they are accustomed, alternative income sources should be sought.

In the centre south, as.in the Northeast, increased productivity is essential if the sugar,industry is to grow and become self-sustaining. More agronomic research is required; plantation management studies must also be undertaken to determine the optimal production process and each of its steps.

Plans under way in the Northeast could reduce and consolidate Northeast cane land to about 370,000 hectares. These lands would be well placed relative to factories, hence lowering transport costs; they would be on less than 20 degree slopes, allowing a measure of mechnization, and they would have the potential for good responses to fertilizer. Production from these areas could be increased from present levels of 45 tons to at least 70 tons of cane per hectare. In the centre south, where there are no major technological or socio-political problems in producing alternative crops such as maize and soybean, the existing cane area should be reduced, and land not capable of yielding at least 100 tons of cane per hectare should not receive a quota. ANNEX 11 Page 15

Cocoa

Cocoa was first planted in Brazil in the mid-eighteenth century and has occupied an important place in the country's agricultural exports for many years. About 95 percent of the present area of 480,000 hectares is concentrated in the southern part of Bahia as a coastal strip extending 500 kilometers southwards from Salvador, latitude 130S, and about 100 kilometers from East to West. Other cocoa producing States are Espirito Santo which accounts for 3.5 percent of the total area, Para, 1 percent, and Amazonas 0.5 percent. Exports of cocoa beans and butter averaged US$75.9 million yearly in the period 1966-68. Although Brazil is the third most important producer of cocoa products, its share of world markets has declined from 18.9 percent in 1949 to 9.6 percent in 1968 owing largely to increased production in Ghana and Nigeria.

To improve cocoa production and exports, the Government in 1957 created the Comissao Executiva de Recuperacao Economico-Rural da Lavoura Cacauceira (CEPLAC). This organization, which reports to the Minister of Finance, is financed by an export levy of 10 percent on beans and 5 percent on butter. Although established in 1957, CEPLAC did not become active until 1965. By mid-1969 it had received a total of US$28 million, ofthich all but US$1.25 million had been committed to its various activities. CEPLAC has:

(a) A division of Economic Studies (directly responsible to the Secretary General) which covers marketing, credit and statistics;

(b) A Research Department responsible for all agronomic research plus farm management and rural sociology studies;

(c) An Extension and Technical Assistance Department responsible for the dissemination of research findings, assessment of credit needs and the supply of inputs;

(d) A Credit and Incentives Department which approves and supervises short and medium term credit provided by CEPLAC through the Banco do Brasil;

(e) A Department of Training and Education which operates training courses for CEPLAC field staff and cocoa farmers and their families.'

CEPLAC grants funds to State Government organizations in cocoa producing areas for feeder roads, medical facilities, rural electrification, telephones, schools, associations and cooperatives. This is the source of finance for a large wharf and related facilities at Ilheus to help improve the handling of cocoa products for export. ANNEX 11 Page 16

The greater part of Brazil's cocoa is grown on acidic red alluvial clays in the valleys and hill slopes of the rivers draining the southern coastal strip of Bahia and the Rio Doce in Espirito Santo. These soils are well suited to cocoa cultivation despite generally uneven topography and rocky outcrops on the upper slopes. Soil mapping and 'the establishment of plant nutrient status at the reconnaissance level has been completed on about 50 percent of the main producing areas and is scheduled for completion in 1971 by CEPLAC.

Rainfall is generally adequate both in total amount (1500-2500 mm) and in distribution. Relative humidities are particularly favorable, being low enough to discourage the spread of Black Pod disease (caused by the fun- gus Phytophthera palmivora). The exception is some 60,000 hectares which have been demarcated and in which control measures are applied. Brazil is also fortunate so far in its freedom from other potentially serious diseases such as Witches Broom and Swollen Shoot, and from significant attack by insect pests such as cocoa-capsid bugs and thrips. CEPL'AC is alive to these dangers and the organization has adequate quarantine facilities and procedures to guard against their introduction via imported materials. Also CEPLAC is in close contact with research people in other cocoa producing countries, and exchanges information on new techniques.

Cocoa farms are normally owner-operated, and with the exception of the largest, farmers live on their holdings. CEPLAC estimates that the bulk of the output-comes from large farms as follows:

Total Holdings Area planted with Cocoa Production Production x ' (ha) tons %

43 Less than 18 Less than 6 7

37 18 to 75 6 to 25 28

18 76 to 270 26 to 90 47

2 More than 270 More than 90 18

100 100

Over 90 percent of cocoa trees are more than 40 years old, badly spaced, and of low productive capacity. Maintenance is poor, harvesting methods are crude, and fermentation and drying techniques are bad. All this makes for a poor product which, with inadequate storage on the farm, bad road links, and indebtedness has resulted in stagnation in Brazilian cocoa production.

CEPLAC has'analyzed the problems of the industry and is attempting to solve them. The Extension and Technical Assistance Department has established divisional offices manned by trained personnel throughout the main ANNEX 11 Page 17 cocoa zone. Information is extended to producers on nutrient requirements and improved management and processing techniques. Plant breeders in the Research Department have developed new strains of planting material - by clonal hybridization and selection from the Catongo variety and imported Forestero types -- which have a yield potential at least five times that of existing trees (which is around 359 kilograms per hectare). In addition, the interclonal hybrids have a remarkable1precocity, beginning to bear within two years of planting compared with the usual four years. Extensive blocks of these improved types are being established to produce material for distribution to farmers. Techniques for replanting of old cocoa farms with minimum loss of production have also been worked out.

CEPLAC imports fertilizers, insecticides, sprayers and other equipment free of duty. These inputs are sold to farmers at the landed cost price at CEPLAC depots throughout the cocoa zone. Technical assistance is provided. Credit is available at negative real interest rates and on terms which vary with the gestation of the investment. Short courses in improved management techniques are provided free of charge for farmers.

Much of the main cocoa zone is still inadequately served by roads, telephones and other basic infrastructure, although CEPLAC has provided some funds for these purposes. Access roads to and within farms are badly needed to reduce transport costs.

The system of buying and the organization of the export trade provide only very limited incentives to farmers to produce uniform samples of well fermented beans. It is understood that CEPLAC and State Government authorities are interested in a compulsory grading system.

CEPLAC now has the research information and is rapidly developing the expertise, planting material and personnel needed to rejuvenate the Brazilian cocoa industry. It plans to promote the replanting of some 150,000 hectares of cocoa in southern Bahia between 1970 and 1980. It is investigating the feasibility of new plantings in the Reconcavo area north-west of Salvador, where some 135,000 hectares of clay soils formerly planted with sugarcane are thought to be suitable for cocoa. It is studying ways of increasing cocoa production in Amazonas where large areas of suitable soils with favorable climatic conditions are said to exist. However, at present CEPLAC has no definite plans for any of these developments, and it is unlikely to be able to procure the finance needed to promote them. It is interested in receiving finance from external sources; the mission suggested that a useful first step would be to prepare a comprehensive development plan for the cocoa industry for the period 1970-1980.

Investment priority should be given to existing areas in southern Bahia where there is known high potential and where CEPLAC is already established and has knowledge of the problems. Seed supplies sufficient for replanting 150,000 hectares, at an estimated cost of US$120 million, could be made available by the mid-1970's and the additional labor needed to support ANNEX 11 Page 18 this program could be attracted from the more northerly areas of the Zona da Mata in Bahia, Alagoas and Pernambuco. Investigations in the Reconcavo area and in Amazoias should be continued.

Rubber

Hevea rubber originated in Brazil, but no commercial plantations of significance have been established. Production is almost wholly dependent on primitive extraction methods from wild trees. Supply is diminishing and stands now at about 20,000 tons per year, compared with 60,000 tons in the mid-1940's and 30,000 tons in 1964. If this trend continues, as seems likely, wild rubber production will have virtually ceased within 20 years.

Some 50,000 to 100,000 families produce natural rubber from wild trees in the Amazon basin (200 to 400 kilograms per annum per family). The Government has fixed a producer price of about US$1.00 per kilo. One result has been the establishment of about 25,000 hectares of commercial plantations in Para and Bahia. But the price decree may be of little help in improving the 'living level of tappers, a primary objective. Tappers are permanently indebted, rarely paid in money, and are extremely poor. Improved communications and alternative opportunity elsewhere may'-eventually help, reduce the supply of tappers sufficiently to enable higher living levels.

Imports of natural rubber have been small because'.a domestic syn- thetic supply is available. Net imports of natural rubber increased from 5,900 tons in 1966 to 12,700 tons in 1968. About 1.72,000 tons of natural rubber may be required per 'annum by 1985. Unless local production can be very significantly increased, which is unlikely by that'date, most of Brazil's needs for natural rubber will have to be imported. ' At US16 cents per pound' c.i.f. New York, the' cost of imports would be about US$61 million annually as of the'mid-1980's.

Large areas in the north and northeast have' suitable soils and climate for rubber. But plantations have suffered f-rom a fungal leaf disease peculiar to South'America (Dothidella uleii) which' attacks most high yielding clones. A high proportion of the commercial plantations of the past 10-12 years are of no real value because they have been planted with susceptible material. The Instituto de Pesquisas e Experimentacao Agropecuaria do Norte (IPEAN) at Belem in Para has done some excellent- work on the development of resistant clones; but this work has been on a very small scale. It is believed possible to develop in a decade or so a range- of resistant, high yielding clones suitable for planting in B'razil if the needed'research resources are made available and some knowhow from other rubber producing countries is brought in.

Imported natural rubber pays a duty, now totalling about US$6 million a year. This is to be used by the Superintendencia da Borracha (Rubber Institute) of the Ministry of Finance to promote rubber production. The most effective way of using these funds would be to' finance a rubber research ANNEX 11 Page 19 organization within the Superintendencia, and to transfer the Superintendencia to the control of the Ministry of Agriculture. The proposed research organization should take over personnel and responsibility for rubber research from IPEAN and pursue an intensive and comprehensive program to produce disease resistant material and practical recommendations for comiercial rubber production. This should ultimately lead to investment, and the Brazilian Govern- ment may wish to maintain liaison with the Bank on this matter. At the outset, the Bank might be able to help recruit suitable senior personnel from abroad for the proposed research team.

Cashew

The cashew tree grows wild over large stretches of the Zona da Mata and agreste zones of the Northeast. Official estimates indicate the area harvested to be about 75,000 hectares, producing some 24,000 tons of nuts. It is unlikely that these estimates take account of the large quantities of cashew consumed locally as fruit rather than nuts.

Exports of cashew nuts increased from 1,580 tons in 1966 to 3,680 tons in 1968 despite a fall in unit value from US$216 to US$130 over the same period. All go to the U.S., but constitute less than 5 percent of the U.S. market. There are good market prospects, given careful grading and competitive pricing.

There are small areas of commercial plantations, but practically no research has been done on the crop. Broad types of wild trees are recognized by growth habit but the transmittal of desired characteristics such as yield, size and color of kernels is extremely variable. The commercial grower is unable to guess the performance of the trees he plants. Anthracose and mildew diseases occur, but can be controlled by copper based fungicides. Fer- tilizer response is unknown. At the conventional planting distance of seven and one half meters square, acceptable yields are 1,200 kilograms of nuts per hectare in the third to tenth years, and up to 2,000 kilograms per hectare thereafter, giving a gross return per hectare of US$1,000 rising to US$1,700 at present prices. Trees yield for many years, but their economic life may approximate 40 years.

Processing facilities have been established, some in association with commercial plantations. Most depend on labor-intensive methods of ker- nel extraction, sorting and grading. Grading is based on size, shape and color of kernels. It will soon be necessary to adopt more mechanized techniques. Processing capacity is adequate for present production.

There is a need to collect information from other countries on the technology and economics of production, processing and marketing of cashew, and adapt it to Brazilian conditions. This work should be divided between the research station near Fortaleza in the state of Ceara, where a start has been made on production problems, and the UNDP-sponsored food technology institute proposed for Salvador in the state of Bahia. To get meaningful re- ANNEX 11 Page 20 sults will take several years. In the meantime, private initiative to develop new products (cashew fruit juice, fruit conserves and other confections) should continue to be given limited encouragement by agencies such as SUDENE, the regional development organization, and the BNB, the regional bank.

Tobacco

Brazil may have an opportunity to export more cigar wrapper tobacco from Bahia, and to develop production in Rio Grande do Sul for the home market. But improvements are required in production, curing and grading.

Sorghum

A significant output of feed grains would be of great help to northeast Brazil.' Sorghum is the crop for this purpose as it has a low water requirement and a shorter growing period. Soils and climate in the agreste zone appear suitable for a cotton, sorghum, groundnut sequence but there is little research information of any consequence on sorghum in this area. The Government should undertake a vigorous program of varietal testing and selection, and agronomic investigations to establish the technical and economic'possibilities of sorghum.

Brazil Nuts

Production is mainly from-unimproved trees with wide variations in age and yielding capacity. Selection of seed from high yielding trees does not necessarily result in high yielding offspring, hence commercial plantations cannot predict potential production with any accuracy. Very preliminary work on vegetative propagation by leaf cuttings at the IPEAN center at Belem has indicated its technical feasibility. The'few cuttings which have been planted also demonstrate a notable precocity in that fruiting has begun within three years of planting, compared with the five,-to seven years taken by trees grown from seed. This should be followed up, because Brazil nuts are in demand and exports can go much higher than the 36,000 tons (US$15 million) of 1968.

Apples and Pears

These temperate fruits are imported from Europe and Argentina for domestic urban markets. Soils and climate in the western parts of Rio Grande do Sul are suitable for cultivation of apples and pears, but only 2,500 hectares are planted .to apples and 4,600 hectares to pears. Further plantings should be encouraged by the state and the regional development agency (SUDESUL). Selected planting material should be imported for testing, and a better information flow from abroad should be designed. ANNEX 12

AGRICULTURAL PLANNING

This annex summarizes the history of economic planning, reviews the agricultural content of the plans, and comments on the present approach to agricultural planning.

General Background

The origins of economic planning in Brazil can be traced back before the World War II, when the administration of President Getulio Vargas created the Administrative Department of the Public Service (DASP), a central instrument of administrative control with budgetary, personnel, material and planning powers. Rudimentary planning began to take shape during World War II. In 1946 the forerunners of the regional development agencies of the Northeast and the Amazon were funded. In 1948, the Joint Brazil-U.S. Technical Commission (the Abbink mission) produced a report on the economy, one result of which was the founding of the National Economic Development Bank (BNDE) in 1952. Another significant development was the SALTE plan formulated for the early 1950's. It is worth mentioning because it covered four sectors: public health, food supply, transportation and electric power. These were considered crucial for economic growth. How- ever, only the energy sector was treated in its entirety, while the other three sectors entered the picture as governmental programs. There was little coordination of sector and subsector planning, or correspondence between the plan and available resources.

More comprehensive central planning was reflected in the Program of Goals 1956-60 of President Kubitscheck. A total of 30 goals ware specified for five sectors, and the resulting five-year plan was based on the notion of continuous planning. A new body, the Council of Development, was to watch over the progress achieved under the plan. In 1959, the Superintendency for the Development of the Northeast (SUDENE) was created in its present organizational form. Construction of the new capital at Brazilia was not one of the 30 specific goals. However, many of these goals, (especially in the transportation sector) were formulated to facilitate speedy integration of the new city into the nation's economic and political life.

Planning and politics were closely linked in the early 1960's. President Quadros was in power only seven months. He created the National Planning Commission (COPLAN), which for a time was a rival agency to the Council of Development. The basic program of President Goulart, who came to power in September 1961, envisioned a quick-action emergency plan, a five-year plan, and a 20-year plan. However, little happened until President Goulart established the post of Minister Extraordinary for Plan- ning in 1962 with Mr. Celso Furtado as its first incumbent. It was decided to produce a plan for the remaining years of the President's term. This plan became known as the Plano Trienal, 1963-65. The policies proposed by the plan could not be maintained for long, however, and in the wake of several rounds of personnel and policy changes the economy finally drifted towards the "revolution" of 1964. ANNEX 12 Page 2

Mr. Roberto Campos became Minister Extraordinary of Planning and Economic Coordination in April, 1964, after General Castelo Branco became President. A new three-year plan, the Program of Action, created between May and July of 1964, was similar to the Plano Trienal in its approach. Objectives were reordered and means were redesigned, however. In 1965 an Advisory Council (CONSPLAN) was created to allow for representation of various economic groups in planning., Steps were initiated to define the powers of the Ministry of Planning, and work was also begun on the 10-year perspective plan for the period 1967-76.

The basic features of the Program of Action, with-perhaps some loosening in controls, were maintained under the next President, General Costa e Silva. The Government's program was formalized as the "Programa Estrategico de Desenvolvimento, 1968-70" (Strategic Program for Develop- ment, 1968-70), which is currently in the implementation stage. Recently, the incumbent President Medici indicated that he may concentrate support on certain sectors, agriculture being one. There have been changes in top level personnel, including the Planning and Agriculture Ministers and the Director of ECEPLAN in the Ministry of Agriculture, and policy directives may soon be forthcoming.

The present planning mechanism is a mixture of central planning and administration with regional planning and implementation. The Govern- ment's administrative reform of the past few years can be regarded as partly an effort to improve this "mixture".

Three-year plans have been the rule in the past decade. This short time span partly explains the haste in preparation, with unmistakable traces of improvisation, and deferments in implementation. It would be better to have a five-year planning frame, and fine-tuning (say annually) when the budget is prepared.

Planning in Agriculture

The. earliest planners gave agriculture consd.derable attention and in the SALTE plan mentioned above, about 13 percent of the proposed five-year expenditures was earmarked for agriculture. The introduction of improved seeds was given major priority for fiber crops, rice, potatoes, beans, forage crops, corn, vegetables and wheat. For a number of commodities, aid to cooperatives was stressed. For fiber crops the plan also included construction of storage facilities and receiving stations. Irrigation works were included for rice. Plant protection was provided for cocoa. General improvements in production technique were mentioned for coffee, tea, sugarcane, tobacco and manioc. Some funds were set aside for experimentation with, and conservation of, forage crops, and for processing facilities for corn, and various-specific expenditures were outlined for production of mate, horticulture, wheat, and vegetable oils. Other measures, not directed ANNEX 12 Page 3

specifically or exclusively to particular crops, included allocation of funds to the National General Warehouse Company, plant disease control, research, farm mechanization, fertilizers, soil conservation, and provision of small farm implements.

The livestock industry was to be aided by animal health programs, consruction of slaughterhouses and dairy plants, assistance to the poultry sector, and financial support for the National Cold Storage Company. Subsidization of fencing was mentioned as a special project.

Support for immigration and colonization focused on financial help for nucleus colonies, including work on irrigation, and the movement of settlers to selected areas, mainly in Para. The plan reflected the then contemporary idea of how farmers should be helped, but left in doubt how priorities were established and what the actual targets were.

An entirely different planning approach was followed in the Program of Goals, (a "goal" in this plan meaning a priority category). The categories for agriculture involved wheat production, warehouses and silos, cold storage, industrial slaughter facilities, farm mechanization, and fertilizers. The basic objective was to influence transformation of traditional agriculture and to increase factor productivity in agriculture. Credit was seen as the key factor and the Banco do Brazil was to expand lending to agriculture. Among the technical assistance measures, the technical education of farm advisors was to be stepped up. Domestic production of fertilizers was to be increased as rapidly as possible, with imports regulated so as to supplement domestic output as needed. The National Economic Develop- ment Bank (BNDE) was designated to assist in the construction of facilities such as warehouses. Improvement of the yield in livestock production was to be largely through research and selective breeding. Special importance was attached to improvements in the wheat enterprise. In general there was no clear distinction between "goals" and "instruments"; rather the emphasis was in making modern inputs and marketing facilities available.

The Plano Trienal mentioned above had as its main objective a growth rate in agricultural production of 7 percent. This plan called for expansion in food production in line with potential demand, correction of deficiencies in the export sector, and more and better primary commodities for the domestic market. On the supply side, the plan envisioned ecological zoning as a step towards rationalizing production. Import substitution was strongly advocated for wheat. On the demand side, an analysis by the Vargas Foundation, looking as far as eight years ahead, was used to set targets for the plan. A new policy was put forth for coffee and cocoa, aimed at strengthening their international competitive position. Production of cotton, jute and natural rubber was to expand with Govern- ment support. A new fisheries development plan called for a survey of fisheries resources, improvement in infrastructure, training of personnel, financial support to fishermen and processors, and cooperation between SUDEPE (Superintendency for the Development of Fisheries), the Ministry of Public Works, and SUDENE. ANNEX 12 Page 4

Government action was called for to improve research and extension, and a serious effort was to be made to improve credit through the creation of the "Fundo Agropecuari", procedures to determine priorities for financing, increased funds, and simplification of the lending procedures. A minimum price policy was to aim at stabilizing farm incomes and at "orienting" farm production to bring it more in line with demand. A policy of guaranteed minimum prices was originally initiated in 1951 but had been rather ineffective due to numerous factors including faulty legislation and lack of necessary storage facilities. Organizational changes were made to eliminate some of these obstacles.

Various programs to Improve farm inputs were also outlined. The plan recognized structural deficiencies and an attempt was made at agrarian reform. This plan was all-embracing and contained several good features but it was less fully implemented than its predecessors.

The ProRram of Action of the revolutionary government mentioned above, contained some new features in its treatment of the agricultural sector. Methodologically, the basic frame of reference was a projected supply-demand balance for agricultural commodities for the domestic market, and an indication of desirable levels of exports. New targets for impact were defined; one,-affecting all aspects of the plan, was to curb inflation.

In agriculture the Government aimed at increased production and exports, import substitution, and rural welfare improvement. Potatoes, beans, corn, wheat, fruit, livestock, cotton and jute were emphasized. Incentives to promote exports were proposed for sugar, rice, oranges, cotton, cocoa, jute, castor beans, mate and sisal. Two major import-substitution commodities were wheat and rubber. Rural welfare goals were (a) to further the geographical redistribution of the rural population; about 150,000 families were to be moved from the Northeast to Maranhao and Parana between 1964 and 1970; and (b) that agricultural training would reach about 200,000 Individuals between 1964 and 1970, and means to this end would include rural extension work and establishment of demonstration areas.

To achieve these goals, the principal short-term measures involved intensification of fertilizer use, poultry promotion around urban centers, establishment of provisional standards for seed certification, mobilization of fisheries resources, the assessment of commodtty programs in terms of food stocks (rice, corn, etc.) and import policy (e.g. PL-480 coumodities such as vegetable oils and dried milk). Longer-run needs were set forth, such as the gradual elimination of price controls and elimination of exchange control on exports; the working out of mechanics for a guaranteed minimum price system; the creation of various institutions in agricultural credit such as the National Rural Credit Coordination (CNCR) and the Fund for Rural Refinancing (FNRR). ANNEX 12 Page 5

The major institutional changes advocated in the plan consisted of a new approach to agrarian reform, a reorganization of the Government's agricultural stations, and a transformation of the government's agricultural "patrulhas motorizadas" into cooperative entities. The basic features of the plan's agrarian reform were cast in the Agrarian Reform Law of 1964 which designated the Brazilian Agrarian Reform Institute (IBRA) as the executing agency and provided financing through creation of the National Fund for Agrarian Reform.

The financial resources for implementation of the program other than agrarian reform were to come largely from the budget of the Ministry of Agriculture and the Fundo Federal Agropecuario. Other sources were BNDE, the Banco do Brazil (Carteira de Credito Agricola e Industrial (CREAI). the rural credit agency CNCR, direct appropriation by the President, state budgets, and international agencies. The latter's share was expected to be about 30 percent of the total cost of the plan for agriculture in 1965/66.

The greatest significance of the Program of Action is that many of the existing institutions and programs have their origin in it. A number of the basic concepts and approaches reach much further back, of course, but they were made more explicit in the Program of Action.

The Current Plan

A Ten-Year Plan of Economic and Social Development was prepared in 1965-67. The planning horizon is thus longer than that of the preceding plans, and the document was prepared much less hastily. Coverage of economic and other subjects is much more extensive and the analysis is more profound. Basically, however, the document is a perspective plan which omits many of the necessary details of implementation. It has been supple- mented and partly superseded by the three-year Strategic Program for Devel- opment, 1968-1970. This program is generally within the context of the ten-year plan; it furnishes the necessary planning precision and incorporates the changing Government outlook to make it workable.

The Strategic Program of Development is subdivided into nine areas of which the first two are agriculture and food supply. The stated objectives are to increase production and productivity by changing methods of production and using more modern inputs, and to eliminate barriers in the marketing process through solution of structural and operational problems. Strategic goals in this plan are expressed in terms of quantities produced or growth rates to be achieved by 1970 for approximately 70 different items.

The strategy of development is cast into project form and, for each impact area, an executing agency, project location, means and phases of execution are laid out in detail. The action program to increase agricultural productivity includes research, seed improvement, fertilizers, ANNEX 12 Page 6 mechanization, irrigation, rural electrification, extension and special programs for livestock, milk production and fisheries. Investment expenditures for this package were estimated at NCr 565 million for 1968-70. The program to expand the agricultural area hinges on agrarian reform and colonization. These seek to induce more intensive use of already occupied. land through improvements in farm structure and tenure conditions and through technical and financial assistance to ailing enterprises in new areas. Active support is given in establishing entirely new settlements, so-called "nucleos novos", in designated areas. The estimated cost of this partvof the program is NCr 304 million, of which NCr 90 million is assigned:to international agencies. The program to improve infrastructure and financial support includes the f51lbwing areas: agricultural credit, a new minimum price and buffer stock policy, and modernization.of the food supply-system (which involves mainly-central and terminal markets, storage, food distribution, and the expor*.market mechanism). The development program also aims at a balanced growth between productivity-and.empl6yment and between productivity and demand, atnd also to an improved&resource allocation within agriculture. and among sectors. The regulatory mechanism for this strategic area seems- to consist of . purpose-oriented.credit management. The sources of official credit are the Banco do Brasil (CREAI),.Banco Central (FUNAGRI, FNRR, FUNDEPE), Region- al Development Banks, the National Cooperative Credit Bank (BNCC), GERCA, CEPLAC, INDA, IBRA, the Fund for the Protection of Agricultural Products and the Fund for Supply Modernization (to be Created-). 1/ Official credit volume was projected for 1968-70 at some NCr 7,000 million. The planned sources and uses of investment funds for the 1968-70 agricultural development program are as follows: Million NCr-1968 Percent Sources Federal budget 903 66 Private sources 282 21 Other internal sources- 14 1 External sources 156 12

1,355 100

Uses Research 114 8 Promotion and extension 760 56 Protection and inspection 78 6 Supply 23 2 C6lonization and reform 316 23 Other uses 64 5

1,355 100

I/ FUNAGRI isctthe General Fund for Agriculture and Industry; FUNDEPE is the CattletDrevelopment Funds; CEPLAC is the Cocoa Development Agency. ANNEX 12 Page 7

Of the total expenditures of NCr 1,355 million, 74 percent is considered capital expenditure and 26 percent as expenses on current account.

Considerably larger than the public expenditures on the agricultural projects of the plan is the amount of official credit to be channeled into agriculture. The 1968-70 projected credit volume of three official agricultural credit sources is as follows:

Million NCr 1968

Banco do Brasil (CREAI) 5,132 Banco Central (FNRR) 1,657 Banco Central (FUNDEPE) 256

Total 7,045

Although these amounts account for credit from the most important sources, total agricultural credit from all sources is expected to be substantially higher.

To enhance the chances of success, the plan calls for rationalization and coordination of governmental action in agricult"'re. The Ministry of Agriculture was designated to assume a coordinating function in the areas of planning, agricultural finance, food supply, research, protection of crops and livestock, agricultural extension, agrarian reform, colonization, agricultural statistics and forecasting, meteorology, marketing, and stan- dardization and grading. Its fuuctions also include liaison with the private sector.

To counteract the risks inherent in Brazilian agriculture and to alleviate the concomitant fluctuation in agricultural income, the plan recommended steps to establish insurance schemes for agriculture. The Minis- try of Agriculture was urged to carry out insurance studies, the results of which were to be incorporated in the plan at a later stage if this was recommended upon conclusion of the studies.

The Strategic Development Program seems to be a "snapshot" of projects and concepts within an inventory that is in constant flux in terms of priorities. This flux is partly due to the influence of person- al preferences of top officials and their rate of turnover. Another reason for the apparent flux is that projects in the "pipeline" were not covered in the program. The Ministry of Agriculture, for instance, lists projects in its most recent yearbook which are not found in the Strategic Program (because these projects were not ready at the time the Strategic Program was prepared). ANNEX 12 Page 8

The present Program for agriculture is overly optimistic on goals for 1970. Targets appear to have been set high in relation to what past performance suggests could be achieved with the resources projected.

The Strategic Program does not provide for a systematic approach to agricultural preinvestment planning. Activities of this nature are generally carried on outside the plan. This is partly explained by the fact that the life of an economic plan often coincided with the term of President, and preinvestment activities were largely ignored on grounds that they would probably be unacceptable to the succeeding administration. It is doubtful whether any central agency in Brazil is aware of all the ongoing preinvestment activities; at least, an inventory of such projects is lacking. This is a major weakness in the planning process.

It is difficult to determine what planning agency sets priorities among project areas, and what these priorities are. The Ministry of Agri- culture is probably the most competent body in technical research and exerts considerable influence on research programs, even though the direction of research and the selection of research projects has shown some insensiti- vity to existing needs. The situation regarding economic analysi3 in the Ministry of Agriculture is less encouraging. Economic research in agriculture has in the past been carried out largely by the Vargas Foundation, the national and regional development banks, a few state secretariats of agriculture like 'Sao Paulo, and more recently universities and several other institutions. The economic planning work of the Ministry of Agriculture appears not to be highly regarded, and this leads to considerable duplication of effort in farm planning and to complications in plan execution since, in the end, the Ministry of Agriculture is expected to be the executing agency for many of the projects. Of the 40 projects listed in the Strategic Program, 24 are under the Ministry of Agriculture, four each under DNOCS and DNOS (see Annex 5 on Irrigation), three under SUVALE, two under SUDENE, and one each under FUNDEPE, CREAI, and ABCAR.

It is difficult to see exactly how planning efforts of the various state, regional and autonomous development agencies feed into the coordinating apparatus of the Planning Ministry, and how this apparatus is able to carry out its functions. State governments, for example, are increasingly active in planning, desirably so. But it is left to the Federal Gov- ernment to maintain or restore a regional balance since the more advanced States are much more capable of fending for themselves when It comes to taking action to secure financing from national or external agencies. Co- ordination must also be aimed at creating a desirable regional distribution of economic activities and must define the time preference patterns. ANNEX 12 Page 9

Suggestions and Recommendations

1) The Central Office of Planning and Control in the Ministry of Agriculture, ECEPLAN, should equip itself to assume a primary role in agricultural planning. This would reduce duplication of work and assure better preparation of projects and better plan implementation. The Planning Ministry would then be performing largely the macro-planning and coordinating functions. Both Ministries, represented through ECEPLAN, IPEA, and the budget subsecretariat, ought to participate in determining priorities in planning.

2) To ensure better performance and prevent redundant activities, the functions of all agencies engaged in agricultural planning should be ascertained and analyzed. Areas of overlap should be eliminated by redefining the planning responsibilities of the agencies concerned.

3) As an approach to streamlining the planning functions, the coordinating role of the Planning Ministry should be emphasized. The Ministry's coordinating body should share in the control function to help ensure the proper selection of executing agencies and satisfactory performance in the execution of plan projects.

4) The Institute of Agrarian Reform (IBRA) and the Extension Service (ABCAR) should be better integrated into the central planning mechanism. They are capable of providing valuable planning inputs as well as being key elements in carrying out projects.

5) Budget preparation and central planning should be more closely linked. Release of budgetary funds also needs to coincide with project timing.

6) Priority needs to be given to preinvestment planning. Viable project proposals should be produced in sufficient number to assure that the supply is not a factor limiting agricultural investment.

7) Lengthening of the planning horizon, perhaps to a five-year period, could improve the quality of the plan considerably, Production cycles in agriculture, especially the livestock and forestry sectors, span several years and thus support this view. ANNEX 12 Page 10

8) In the plan itself, specific goals should be linked with specific means related to the targets set. This is not now done very realistically. The adequacy of the proposed means should be reviewed from time to time, and this would greatly facilitate ex-post analysis of achievements. Such analyses should be performed more often than now is done.

9) -.Agricultural planning should be more inclusive than it has been the past. Activities of state governments and the private sector should receive greater emphasis in the plan and be integrated better with activities at the federal level. 1/

1/ The following planning documents of the Federal Government were consulted in preparing this Annex: (1) Plano Quinquenal de Obras e Reaparelhamento da Defesa Nacional (1939); (2) Plano de Obras e Equipamento e da Outras Providencias- (1943); (3) Plano SALTE (1948); (4) Programa de Metas (1958); (5) Plano Trienal de Desenvolvimento Economico e Social, 1963-1965 (1962); (6) Programa de Acao Economica de Governo, 1964-1966 (1964); (7) Plano Decenal de Desenvolvisento Economico e Social (1967); and (8) Programa Estrategico de Desenvolvimento, 1968-1970. ANNEX 13

RURAL ROADS AND ELECTRIFICATION

The expansion of the highway network in Brazil has been extremely rapid in recent years. According to statistics of the National Highway De- partment (DNER), the total road length more than doubled during the decade ending in 1967. While the addition to the Federal and State Highways averaged approximately 5,000 kilometers annually over the 10-year period, almost 40,000 kilometers were added annually to municipal roads.,-

Rural Roads in the National Framework

Rural roads (access or feeder roads) account for by far the largest portion of the existing highway network. There are no data available on the mileage of such roads, but statistics published along jurisdictional lines provide some insight. By the end of 1967, there were approximately 935,000 kilometers of roads in existence in Brazil, 83.3 percent of which were administered by municipal governments, 12.2 percent by the states, and only 4.5 percent by the federal government. While of all federal roads about 40 percent were paved, the percentage was less than 0.5 for municipal roads.

The degree of development of the road network varies greatly among States. Tne length of all roads per 1,000 square kilometers of land area is one indicator. On this basis, the State of Sao Paulo ranks, highest and the Amazonas State lowest, with 678.2 and 1.1 road-kilometers, respectively, per 1,000 square kilometers of land area (Table 13-1). This comparison excludes the city-State of Guanabara. A rule of thumb is that road density of about 400 kilometers/l,000 square kilometers may ensure satisfactory road service in terms of access to the road network if the roads are efficiently distributed. Seven States in Brazil had a higher density than this in 1967, while in the remaining 19 States and territories it was lower. For Brazil as a whole, there were 111 kilometers of roads per 1,000 square kilometers of total land area, and 281 kilometers per 1,000 square kilometers of land in agricultural use. However, these ratios do not reveal anything about the conditions of the roads and the degree to which they become unusable during bad weather. A survey conducted by the Brazilian Institute for Agrarian Reform (IBRA) shows that in 1965 one-fourth or more of the farmers in each of four States reported their roads unpassable for more than 60 days per year (Table 13-2). Restricted use of roads was reported by more than 20 percent of the farmers in 22 States and territories.

The rural road system has received little national attention until recently. Few statistical data have been available,.and a general lack of studies bearing on the contribution of rural roads to both regional and sectoral development has complicated the formulation of guidelines for setting investment priorities. Moreover, suitable methodology for the study of individual rural road projects is only now being developed. ANNEX 13 Page 2

Recent policy toward rural roads can be conveniently dated to 1967, when an agreement was signed between the National Highway Depart- ment (DNER) and the Banco Nacional do Desenvolvimento (BNDE) establishing a Special Committee concerned with the "Programa Nacional de Estradas Vicinais", i.e. rural roads. An amount of NCr 60 million was initially assigned to the program for the 1968/70 period. NCr 40 million were added in each of the'years 1968 and 1969. BNDE agreed to consider projects involving rural roads of up to 30 kilometers in length, and longer roads as exceptional cases. The BNDE-DNER contract constituted a change in the Federal Government-'s transport policy; it had not previously been involved in the financing'of this type of road.

Transport economists in BNDE have recently called for the creation of "Consorcios Rodoviarios Municipais" to bring about a better micro- regional integration, and for increased technical assistance to municipalities from DNER and the DER's (State Highway Departments). Proposals for financing include an allocation of one percent of the National Road Fund to the National Rural Road Program, the tapping of other nationl sources like BNDE, BASA, BNB, GERCA, INDA, SERFHAU, 1/ the Banco Central and external sources like the Interamerican Development Bank and the U.S. Agency for International Development. Chances of acceptance of these suggestions are uncertain.

The proposed schemes touch on some crucial points which have handicapped rural road construction in the past. One is the lack of agencies at the municipal level which are competent in the technical and financial planning and supervision of road projects. But both the DNER and most DER's, are well staffed and could extend their expertise to aid in the preparation and execution of rural road projects.

Another problem has been the severe inadequacy of funds available for road construction and maintenance at the municipal level. Locally generated funds have been scarce, and transfers from the National Road Fund are widely alleged to have at times been used for purposes unrelated to transportation. The projected share of the municipalities in the National Road Fund is shown in Table 13-3.

Still another problem is that road funds have been distributed among projects in less than optimal fashion, and economic considerations have too often had to yield to technical or political criteria at all levels of government.

1/ BASA is Bank of the Amazon; BNB is Bank of the Northeast; GERCA is Executive Group for Rationalization of Coffee Culture; INDA is Na- tional Institute for Agrarian Development; SERFHAU is Federal Service for Urban Housing. ANNEX 13 Page 3

Current Projects and Prospects

Available information on ongoing or planned rural road projects is limited to those involving financial assistance from the National Devel- opment Bank or external sources. The projects sponsored under the BNDE Rural Road Construction Program are shown in Table 13-4. Under that program, about 5,000 kilometers of rural roads, costing a total of NCr 214 million, are to be built in the States of Para, Maranhao, Piaui, Paraiba, Bahia, Espirito Santo, Mato Grosso, Rio de Janeiro, and Santa Catarina. BNDE will contribute NCr 112 million, or 52 percent of the estimated construction cost.

An extensive rural road program is planned for Rio Grande do Sul, involving approximately 10,000 kilometers of rural roads and costing NCr 76 million, for this, BNDE will lend NCr 6 million.

Another rural road project is part of the colonization program for the northwest of Minas Gerais. This project covers 967 kilometers of penetration roads and 1,250 kilometers of rural roads. The total estimated cost is US$22.3 million. The State will contribute US$9.2 million, the Federal government US$3.6 million, and US$9.5 million are expected to be loaned by the Interamerican Development Bank (IDB).

The total road distance of these projects is 17,215 kilometers. Data are not at hand to compare this figure with the total of all roads to be constructed or improved in the country. However, compared with the expansion of the highway network in the past, and the still existing needs, the figure appears quite small.

Institutional and administrative obstacles make it difficult for foreign aid agencies to finance rural roads. It is known that the U.S. AID is considering financial support under the BNDE-DNER arrangement if this should prove to be a sound vehicle for investment planning. One scheme has already been worked out by US AID/ARDO which would enable the construction, improvement or repair of "Municipal Agricultural Marketing Roads" using the equivalent of US$20 million from a PL-480 loan. But the scheme is not likely to be realized until the administrative procedures are revised.

The prospects for increased Federal spending on rural roads hinge on the time-phasing of the highway expenditures in the Master Plan. This calls for a levelling in annual spending on major highways in the second half of the planning period (1973-76), and this may permit an increase of funds from domestic sources for feeder road projects later in the decade. Rural Electrification

Electricity is now available on a very small proportion of agricultural holdings. According to the 1960 agricultural census, of the 3.34 million holdings, only 116,000 or 3.5 percent, reported using electricity ANNEX 13 Page 4

in that year. . Almos.t one half of all users had their own generating equipment, which leaves only 1.8 percent of allcholdings connected to a power system. This low proportion of holdings with electricity is partly explained by the;.fact that the national power generating capacity has only in recent years theen increased to a level approximating the requirements of urban and'industxial centers.with priority claims on-electricity. Great geographical dit-parsion of rural.properties in most of Brazil has alo0 been a deterrent zto.electrification.

.Therneefd.fo,r electrification of rural'properties has beein recognized and pro1grams'have,been prepared at the ,Federal and State levels In the past five years. The national program was developed by the Instituto Nacional do.Desenvolvimento Agrario (INDA),, a semiautonorous agency which was-createdAthroMqgh Law 4,504 (Estatuto.da.Terra) of November.30, 19.64. The promot:i'on ,and execution,of,.the.National Program of Rural Electrification was one of the ,original four.areas.of activity assigned to INDA.

S'ince TINDA does not have the .resources necessary to itself exe- cute the National Program, it cooperates with existing institutions in the States, most of.which already possess project expertise and trained man- power. The State institutions carry ouit their plans through specially formed Rural.Electrification-Cooperativres.

The current phase of the National Program of'Rural Electrification falls within the.1968-70 plan which consists of.10 subprojects and involves *a loan by the Interamerican Development Bank (IDB). Agencies participating in this plan and the domestic sources of non-INDA funds are shown in Table 13-5.

The agencies also -require a 20-percent participation by the bene- ficiaries of:the-program. All agencies participating in the plan have enen- tered an agreement with INDA.to coordinate planning and financing.

INDA projects that were partially or fully completed between 1965 and 1968 cost approximately US$28..6 million, as follows.: (US$ thousands)

,Projects completed 3,295

.-Studies and surveys completed 150

Projects underway but not completed by April 1968 23,711

-St,udies and surveys underway but not .- completed by Aprl-l 1968 1,400

Total 28,556 ANNEX 13 Page 5

The plan is being financed as follows: US$30 million from the Interamerican Development Bank, US$15 million from INDA, US$12 million from electrification cooperatives, and US$3 million from ELECTROBRAS (National Brazilian Power Company).

Efforts to provide electricity to farmers have had to face difficult problems. The high dispersion of rural properties causes high investments in transmission lines per property, and the relatively low levels of consumption per user makes for high operational costs of the power grid per delivered unit. Investment is also hampered by low educational levels, inflation and institutional factors such as the difficulty of forming cooperatives. There are transport and communications as well. Power projects usually require a minimum prospective load of about 10 kVA (kilovolt-ampere, a unit of apparent power in an electric circuit) per line kilometer, and initial user financing covering at least 20 percent of the estimated cost.

INDA has developed guidelines for preinvestment surveys to ensure that all factors are taken into account in the planning of a project. A detailed project preparation scheme has also been worked out. However, this is more a step-by-step account of activities involved in carrying a project into its final stages rather than procedure for the appraisal of the cost- benefit type. No analyses are applied to establish priorities for financing. This practice is partly consequent upon the relative smallness of individual projects, and the lack of a project "pool" to draw from.

Organization difficulties, particularly on staffing, have hindered the INDA program. These problems are said to have been resolved.

INDA's rural electrification program is not the only effort in this field. In some States, the State power companies, like Centrais Ele- tricas de Sao Paulo have their own programs for rural areas; they depend largely on State banks and regional development institutions for funds. These programs have had considerable success.

Conclusions and SuRgestions

Regarding roads, preliminary evidence suggests that the high costs of moving products from the farm gate to primary assembly points are responsible for a large share of the marketing margins. This indicates that rural roads may deserve a higher claim on investment resources than now accorded. Because established agricultural regions and well developed consumer markets already exist, investment to bring these two blocks closer together through a reduction in transport costs is likely to show high economic returns. How- ever, rural road development must be conceived within the purview of the transport system as a whole, including ports and terminal and inland storage facilities. A pressing need is to undertake studies of a preinvestment nature to learn more about the economics of rural road improvement. And a solution to the institutional problems appears to be a precondition to increasing the flow of external funds into this segment of the transport sector. ANNEX 13 Page 6

Electrification is just getting under way. National and State programs exist but progress has been very slow. Few studies have been made as to the contribution that electriclty could make to enhance agricultural productivity and rural life in general.

In the investment sense, the direct economic benefits of electrification are not immediately obvious, particularly in the many farming areas ,and enterprises where little or no on-farm processing of farm inputs or products is taking place. Larger benefits can be envisioned in dairying, .other more intensive livestock enterprises, and on farms with irrigated land. Needless to say, there exist many circumstances under which returns to investment-may be good, but the term "rural electrification" is too heterogeneous in content to allow .generalizations concerning its economy. There is a.good case, however, for increased preinvestment activities by INDA or whatever other federal agency may become responsible for rural electrification. Tablej3 - 1

Brazil: Lengths of All Roads, Total and Agricultural Land Area, and Road Kilometers per 1000 ki 2 Land Area, 1967

Lengths of Roads per State or Federal, State & Land Area i000 km2 of Land Area Territory Municipal Roads Total Agricultural Total Agricultural (km) (1000 km2 ) (Kai/1000 km2)

Rondonia 1,168 243.04 50.79 4.80 23.00 Acre 325 152.59 34.77 2-13 9.35 Amazonas 1,686 1,558.99 83. n 1.08 20.14 Roraima 374 230.10 19.92 1.62 18.78 Para 17,932 1,227.53 155.19 14.61 115.55 Amapa 922 139.07 16.68 6.63 55.28 Maranhao 23,262 324.62 133.98 71.66 173.62 Piaui 21,933 250.93 109.29 87.41 200.69 Ceara 47.324 146.82 122.80 322.33 385.37 Rio Grande do Norte 9,298 53.02 40.38 179.37 230.26 Paraiba 23,846 56.37 42.30 423.03 563.73 Pernambuco 17,121 98.28 58.16 174.21 294.38 Alagoas 11,266 27.65 22.65 407.45 497.40 Sergipe 4,822 21.99 15.02 219.28 321.04 Bahia 63,654 559.95 230.92 113.68 275.65 Minas Gerais 132,901 582.59 412.53 228.12 322.16 Espirito Santo 16,153 45.60 33.32 354.23 484.78 Rio de Janeiro 19,088 42.13 30.96 453.07 616.54 Guanabara 1,108 1.17 0.35 947.01 3,165.71 Sao Paulo 167,736 247.32 209.73 678.21 799.77 Parana 83,674 199.06 173.53 420.34 482.19 Santa Catarina 31,690 95.48 76.44 331.90 414.57 Rio Grande do Sul 170,713 267.53 231.67 638.11 736.88 Mato Grosso 32,078 1,231.54 608.67 24.05 52.70 Goias 33,987 642e04 406.01 52.94 83.71 Distrito Federal 588 1.00 101.91 588.0o 934,681 8,451.18 3,320.77 110.60 281.46

Source: Departamento Nacional de Estradas de Rodagem, Instituto Brasileiro de Geografia e Estatistica. Classification by Farmers of Rural Roads According to Usability During Bad Weather, by States and Territories, 1965

State or Percent of Farmers Reeorting Roads Tmpassable for: Territory 0 Da;ys 1- 60 Days More than 60 days

Rondonia 78.83 5.43 15.714 Acre 45.81 27-55 26.64 Ajuazonas 68.91 7.63 23.46 Roraima 45.89 9.23 44.88 Para 82.61 3.70 13.69 Amapa 98.78 0.02 1.20 Maranhao 62.99 12.40 24.61 Piaui 70.40 18.07 11.53 Ceara 46.63 27.19 26.18 Rio Grande do Norte 62.23 23.54 14.23 Paraiba 63.60 23.37 13.03 Pernambuco 63.o8 27.85 9.07 Alagoas 72.14 14.53 13.33 Sergipe 76.22 17.30 6.48 Bahia 71.28 21.94 6.78 Minea Gerais 62.25 23.80 13.95 Espirito Santo 66.02 26.37 7.61 Rio de Janeiro 56.92 20.52 22.56 Guahabara 97.93 1.76 0.31 Sao Paulo 73.80 18.65 7.55 Parana 72.42 20.26 7.32 Santa Catrina 69.38 22.34 8.28 Rio Grande do Sul 74.57 21.16 4.37 Mato Grasso 62.98 31.54 25.48 Goias 79.02 9.28 11.70 .Dltrito Federal 96.80 1.37 1.83

Source: IBRA, A Estrftura Agraria Brasileira. Volume 1, 1967. Table 13-3

Projected Share of the Municipalities in the National Road Fund 1969-1976

Share of Year National Road Fund Munici alities (million NCr) / Tmillion NCrt

1969 2,274 182

1970 2,498 200 1971 2,737 219

1972 2,993 239

1973 3,279 263 1974 3,S96 288

1975 3,951 315

1976 4,339 348

1/ Eight percent of the column to the left.

2/ In 1969 Prices.

Note: Currency adjustment is based on the June 1969 wholesale; price index.

Source: GEIPOT, Volume XI. Table 13-4 Brazil.eBNDE Rural Road Pro'ra-a

Length of state Project Road Tota Cost BNDE LoAn Econoxic Intereat , , , , ,,, (k>) 1000O ;Cr.$) (>,T) , Para Construction of 3 rural roads 336 13,851 5,000 Nuts, wood, diamonds, gold, iron mananease. Mharanhao Conatruction of I rural roads 281 lhC000 8,000 Rice, beans, cattle, sheep. Ccnstruction otfpricrity road Babacu, rice,sugZr, livestock, connecting Coelho - Ncto paper, wood. (apecial area).with BR-316 90 2,000 l,000

Plaui Conatruction of rural roads Bice, beans, corn, livestock. Joining 17 towna to BR-316 383 10,000 5,1460 Paraiba Construction of 2 rural roads Cotton, aisal, corn, livestock. and 1800 m of bridges 170 10,000 6,000 Eahia Part of construction of' R-101 Cocoa, rubber. betwsen Salvador - Espirito Santo State border (deaig_ated as rural road).. eoo 63,000 27,CO Espirito Ctnstruction of 6 rural roads 233 29,528 11,800 Rice, beans, corn, sugar, wheat.. Santo

Minas Construction of 5rural roads, Rice, sugar, beans, livestock, Cerais (one special for em1Ik area"). 406 20,100 10,700 milk.

liwural enas Pregranm 223 51416 2,723 Bians, corn, etc. Golas Ten parts of Federal Roads Peanuts, rice, corn, beans, identified as "rural". 700 9000 5,?00 Oranges, bananas, abacate, melancia Mato Grasso Construction of rural "production roads". 1114 214000 13,000 Several products. Rio de Janeiro Construction of rural roads. 100 15am 9,200 FFruita, e a. 9anta Constrtetion of rural roads Catarlna between Xanxere and S. Miguel do Qeete 86 8,000 6,500 Area integration.

Rio Grande Construction of rural roads ' Wheat, rice, cattle, eggs. do Sul (planned for "near future').. 10,000 76,ooo 6,o0o

Source: BNDE. Table 13-5

INDA Rural Electrification Plan: Agencies and Sources of Funds

Source of funds Agency __ / 2/'3/ Other

Eletrificacao Rural de Minas Gerais S.A.- X Twenty percent of State funds ERMIG granted to Centrais Eletricas de Minas Gerais; returns on capital invested in rural electrification cooperatives; ELETROBRAS.

Companhia Paranaense de Energia X About ten percent of State funds Eletrica S.A. - COPEL set aside for Parana's global electrification program; funds from the Companhia de Dssenvolvi- mento Economico do Parana (CODEPAR)

Companhia de Eletricidade de Pernambuco - X Portion of the "Imposto Unico". CELPE Companhia de Eletricidade de Alagoas - X X CEAL

Sociedade Anonima de Eletrificacao da Paraiba - SAELPA X X X

Companhia de Eletrificacao Centro Norte do Ceara - CENORTE x x x

Companhia Forca e Luz Cataguazes - Leopoldina - CFLCL (a company providing electrical services in various Mumicipios in the Zona da Mata) Own funds; Bank of Brazil.

Departamento de Aguase Energia Eletrica do X Caixa Economica do Estado de Estado de Sao Paulo - DAEE Sao Paulo.

Companhia Estadual de Ehergia Eletrica do Estado do Rio Grande do Sul - CEEE X X

Centrais Eletricas de Goias S.A. - CEIG X X

1/ Ministry of Mines and Energy

2/ State budget funds

3/ SUDENE

Source: Instituto Nacional do Desenvolvimento Agrario

ANNEX 14

A SURVEY OF PREINVESTMENT ACTIVITY IN AGRICULTURE

The purpose of this annex is to provide a background survey useful for designing a preinveatment studies program for Brazilian agriculture. The annex summarizes the activities under,way and attempts a preliminary evaluation of on-going studies and an identification of areas which need further investigation.

Organization

Agriculture preinvestment activities are not coordinated or organized according to systems of priority in Brazil. Moreover, no comprehensive inventories of completed and current major preinvestment activities is available, although the UNDP are apparently now beginning to systematically inventory international preinvestment assistance to Brazil. Diverse public and private organizations at state, regional and federal levels make decisions about agricultural preinvestment in various fields and areas.

At the national level, the Ministries of Agriculture, Interior, and Planning are trying to coordinate requests for external assistance for agricultural preinvestment work. A group composed of one representative each from these Ministries plus a member of the Foreign Ministry intend to hold regular meetings to consider jointly these requests. Although the Ministry of Planning, through its Institute of Economic and Social Planning (IPEA), has responsibility for agricultural as well as other planning at the national level, it has exercised little direct coordination of agricultural preinvestment activities.

Within the Ministry of Agriculture, the Central Office of Planning and Coordination, (ECEPLAN) assumes some coordination and even direct responsibility for carrying out preinvestment (see Annex T). The autonomous agencies under the Ministry present their annual budget to the Ministry through ECEPLAN.

Offices within ECEPLAN have prepared (with their own staff and sometimes with consultants' assistance) "national integrated" plans covering various aspects of the agricultural sector. So far, plans have been prepared covering seeds, fertilizers, mechanization, and the use of lime resources. In 1969 ECEPLAN personnel were active in preparing plans for plant and animal protection, tropical fruits, milk products and agricultural aviation, among other fields.

The "integrated national plans" of ECEPLAN vary greatly in level of detail and other qualities. Generally, the plans contain extensive description but do not list concrete investment proposals. The plans are "integrated" in the sense that they review the roles of various public (and sometimes private) agencies in the program discussed. General guidelines for future action are stipulated for each agency. ANNEX 14 Page 2

The ECEPLAN documents contain agricultural information which could be valuable for decisions on investment potential within the fields covered. Of the existing ECEPLAN integrated national plans, that for improved seeds is the most elaborate. A seeds plan was produced by ECEPLAN and other Agricultural Ministry staff in 1968 1/. In 1969, a more specific and detailed version of the plan covering the south and southwest was produced by consultants under contract to ECEPLAN 2/.

ECEPLAI-was set up only recently (1968) and its role in agricultural preinvestment work is not yet clear. Thus far, the plans produced by ECEPLAN have served primarily as a basis for the broad allocation among agricultural development programs of the financial and staff resources of the Ministry of' Agriculture and related agencies. The recent agricultural development plan produced by IPEA 3/ is based in part on ECEPLAN programs 4/.

The Ministry of Agriculture supports a large technical research program in agriculture through its Office of Research and Experimentation (EPE) which is responsible for nine regional agricultural research institutes and over 50 research and experiment stations. The EPE central office in Brasilia provides administrative services and coordinates the research activities of the nine regional agencies. Although most of the regional agencies maintain firm control over the experiment stations within their area, decisions on research activities are not made according to well developed plans; frequently they reflect the technical background of a particular director. ECEPLAN has not yet been in a position to strongly influence EPE research activities.

Even if ECEPLAN and EPE were to rationalize preinvestment within the Agriculture Ministry, this would affect only part of the agriculture sector since the Ministry of the Interior has considerable responsibility for the sector. This responsibility takes the form of indirect control over the federal agencies involved with irrigation and ministerial responsibility for the expanding regional development superintendencies and the irrigation agencies sponsor increasingly numerous feasibility studies in

1/ The National Seeds Plan (PLANASEM) 1968. 2/ The Assessoria Tecnico-Economica Agro-Industrial (ATEAI), Rio.

3/ The Agricultural section of the Strategic Development Program (1968-1971) which was assembled by the Institute of Economic and Social Planning of the Ministry of Planning. 4/ However, programs in important fields such as irrigation, coffee, sugar, cocoa, forestry and fisheries are not formulated through ECEPLAN, (a dis- cussion and evaluation of the activities of ECEPLAN is given in Annex 7. ANNEX 1i4 Page 3 specific areas. These studies are now being coordinated and evaluated by a special executive group (GEIDA) 1/, promoted mainly by the Interior Min- istry but with the participation of the Ministries of Agriculture and Plan- ning. The five regional development superintendencies, of which that for the northeast (SUDENE) is by far the most important, contain agricultural sections which are primarily concerned with the coordination and (less often) the implementation of agriculture preinvestment activities.

Federal organizations outside these two ministries also conduct agriculture preinvestment work. The Brazilian Coffee Institute and the Sugar and Alcohol Institute, semi-autonomous under the Ministry of Industry and Commerce, have been associated with studies of investment in diversification. In the private sector, the large and diverse Cotia Cooperative in Sao Paulo and Parana and the wheat and rice organizations in Rio Grande do Sul have sponsored the preinvestment studies. The Banco do Brazil and the Banco do Nordeste, both federally controlled mixed corporations, have undertaken preinvestment studies of parts of the agriculture sector relevant to their lending operations. The role in preinvestment work played by the Getulio Vargas Foundation in undertaking background economic surveys and studies of the agricultural sector has also been considerabie.

Agricultural preinvestment activities carried out by the states vary greatly in extent and quality. At present, activities at the state level are most important in Sao Paulo and Minas Gerais where preinvestment activities are promoted not only by the state secretariats of agriculture but also by state controlled regional development agencies and other organizations of lesser scale. The states of Parana and Rio Grande do Sul should be in a position to enlarge their agricultural preinvestment activities; at present these activities are quite small compared to Sao Paulo and Minas Gerais. Preinvestment activities at the state level are in general much less important in states other than these four.

The international organizations have assisted Brazil in agricultural preinvestment work mainly through the UNDP a/ and USAID 2/.

A characteristic of agricultural preinvestment activity in Brazil is the division among organizations of work on particular programs. Organi- zations at all levels make agreements ('convenios') setting out their specific roles. Agreements are made between federal and state, regional and state, or regional and federal agencies. Independent agencies, such as the state offices of the ABCAR extension system, and even private agencies

1/ Executive Group for Irrigation for Agricultural Development.

2/ The United Nations Development Program which financed preinvestment projects in agriculture mainly executed by the Food and Agriculture Organization of the United Nations.

3/ United States Agency for International Development. ANNEX 14 Page 4 frequently enter into such agreements. The kinds of agreements vary considerably. In some cases the organizations sign a convenio merely to coordinate their activities. In others, a convenio provides that one organization will undertake specified preinvestment work for which it is re- imbursed by another organization. Difficulties and defaults in execution are common (e.g. because of a shortage of personnel or a budget constraint). The latter fact has sometimes dissuaded efficient organizations from entering into agreements with organizations which are known to default often.

Public, semi-autonomous and private organizations are increasingly entering into contracts ("consorcios") with private consultants for preinvestment work. This is particularly true in irrigation, where six foreign consulting firms and seven Brazilian consulting firms are at present preparing technical and economic aspects of various irrigation projects 1/. Numerous small domestic consulting firms have developed as a result of the investment preparation work which is necessary in various fields to take advantage of tax incentive laws in the Northeast and the North, and in fisheries and forestry. Foreign consultants are currently engaged in settlement preinvestment work in the Amazon Basin 2/ and palm oil development, 3/ among other fields. Foreign and domestic consultants work in cooperation, partly for legal reasons, and this provides valuable experience for the national firm.

General Agricultural Credit and Related Preinvestment Priorities

The banks which lend to agriculture have undertaken numerous small- scale studies of farm credit;requirements. The maJor banks lending to agriculture are the Banco do Brasil and more recently, the Banco do Nordeste. It is generally recognized that the Banco do Brasil places less emphasis on preinvestment studies for development credit programs than the Banco do Nordeste. Hovever, the Banco do Brasil is by far the most important agricultural credit agency. Smaller banks, especially private banks at the state level, are initiating lending programs in agriculture, partly as a result of recent legislation requiring this.

1/ The foreign firms working in irrigation at present are: SCET-Coop (France), TAHAL (Israel), Techniberia (Spain), OTI (Spain), INTECSA (Spain) and COBA (Portugal). The larger national consulting firms are Sondetecnica, Geotecnica, Hidroservice, Hidrobrasileira, Brasconsult, ERN-and CNEC.

2/ Hunting Technical Services, financed by a grant form the British Over- seas Development Ministry.

3/ The French sponsored IRHO which is engaged in preparing a master plan for palm oil development. ANNEL 14 Page 5

The most recent comprehensive study of agricultural credit in Brazil was financed by USAID in 1969 1/. An earlier CIDA/IDB/Central Bank credit survey (1967), largely statistical, was published in 1969.

So long as banks have concentrated in short and medium-term production and marketing loans, the creditworthiness of the borrower and the collateral provided have been of more interest than farm plans or investment feasibility studies. With inflation tapering off and a growing interest in longer term development financing the need for preinvestment studies is increasing. These are generally carried out by prospective borrowers with the help of private consultants and various government agencies. Specific needs in particular fields are described in the sections which follow.

Infrastructure

Transportation

Substantial preinvestment studies of the transportation sector have recently been completed. The Brazilian National Highway Department (DNER) and the IBRD, through a large UNDP project, have been coordinating the work of foreign and national consultants in preparing highway master plans for most of the country. Extensive studies of railroads, shipping, and major Dort facilities were also included. Much of the information collected in these surveys and studies is relevant to agricultural investment potential. As a result of them, large investments in transport infrastructure are expected during the next five years.

The largest part of the projected transport investments will be for roads in the federal-state highway systems. Agricultural feeder roads and rural roads outside the federal-state system were not specifically studied and are not scheduled for large investment. Such roads are usually the responsibility of the municipalities. No good national statistics exist for them, although it is estimated that they account for over 80 percent of total road length in Brazil and that a negligible proportion are paved. In the frontier states and even in long settled agricultural zones, many of them are impassable for considerable periods each year.

In 1967 DNER and the National Economic Development Bank (BNDE) agreed to a national rural roads program of limited scope. BNDE has allocated between US$10 and 15 million annually to municipalities through various plans submitted by state governments. The program is now under consideration for USAID financing, with possible technical assistance in the preparation and economic evaluation of sub-projects through the BNDE.

1/ "An Agricultural Credit Survey of Brazil" (unpublished): by Judith Tendler for USAID, October 1969. ANNEX 14 Page 6

Storage

The Brazilian Warehouse Company (CIBRAZEM), 1/ with the assistance of private consultants, recently completed an extensive survey of intermediate storage capacity 2/ in the south and center south regions. During the survey, information was collected on intermediate storage capacities by zones and on product flows and how they are generated. Information was assembled on the marketing and distribution characteristics of the major crops. The survey also includes an analysis of current legislation.

Arrangements have recently been made to begin a limited survey and investigation of possibilities for improving on-farm storage. The study will be conducted by agricultural research staff of the Rural Univer- sity of Minas Gerais at Vicosa, where USAID (through Purdue University) sponsors a crop storage center for training and research. The study will cover engineering, biological, and economic aspects of alternative forms of on-farm storage facilities in various areas of the south and center south, partly through monitored trials. A report is expected early in 1971.

Priorities in Transport and Storage

The current program for development of rural roads is extremely limited. Preinvestment work related to rural roads is even more limited and of poor quality. It would be appropriate to initiate specific surveys of rural road conditions, particularly in areas of recent development and in areas of high agricultural development potential.

Preinvestment work in crop storage in the south and center south provides a basis for proceeding with feasibility studies of specific storage investments. Storage preinvestment activities are inadequate in the Northeast, where a proposed storage study by SUDENE has not yet begun. CIBRAZEM involvement in the northeast region has been small. A preinvestment survey of possible storage investments there should be given priority. It could be done by national consultants in cooperation with CIBRAZEM or SUDENE.

The Northeast

A major portion of the agricultural preinvestment work in the Northeast is carried out or coordinated through the regional development superintendency, SUDENE. The Banco do Nordeste has financed valuable background studies in agriculture. Other public organizations operating in

1/ An autonomous agency under the Ministry of Agriculture.

2/ Intermediate storage excludes port and market terminal storage and on-farm storage. ANNEX 14 Page 7 the region such as SUVALE, 1/ GERAN 2/ DNOCS and DNOS / are responsible (often Jointly with SUDENE) for agriculture preinvestment in their specific fields and areas. The preinvestment activities of USAID and the FAO/ UNDP in the region (jointly with local agencies) are important elements in the overall preinvestment picture.

SUDENE

SUDENE's agriculture preinvestment activities include the major irrigation studies in the region (notably in the Sao Francisco and Jaguaribe Basins), and most other types work on the eight priority fields for agri-- culture emphasized in SUDENE's Three-Year development plan for the region. 4/ The priority fields are:

(a) The breeding, production, and distribution of improved seeds. (b) The bulk mixing, transportation, and distribution of chemical fertilizers. (c) The control of animal diseases. (d) A program of forestry development. (e) The training of agricultural technicians (middle level). (f) The coordination of agricultural research and experimentation. (g) The design and construction of marketing and storage facilities. (h) The settlement of the transitional Amazonian forest in the SUDENE colonization area of northern Maranhao.

Concerning the above priorities, studies are in progress with regard to chemical fertilizers, improved seeds and settlement in northern Maranhao. General region-wide investigations of fertilizers, carried out with UNIDO S/ technical assistance, have provided essential preparation for

1/ The Superintendency for the Sao Francisco Valley which covers parts of Minas Gerais, Bahia, Pernambuco, Sergipe and Alagoas. An autonomous agency based in Rio de Janeiro under the Ministry of the Interior.

2/ The Special Group for the Rationalization of Northeast Sugar Production (mainly involving the coastal zones of Pernambuco and Alagoas).

3/ DNOCS and DNOS are autonomous federal agencies under the Ministry of the Interior concerned with irrigation, the former agency limited to the Northeast (see Annex 5).

4/ The Fourth Three-Year Master Plan of SUDENE 1969-1971 (published 1968).

5/ The United Nations Industrial Development Organization, which finances a senior fertilizer expert working with a fertilizer group in the Department of Industry at SUDENE. ANNEX 14 Page o beginning a full feasibility study of possible investment in fertilizer distribution throughout the region (with manufacturing as a possible subsequent stage). Technical assistance for the full study, estimated to require a team Or experts for two years, is under consideration by USAID, UNDP, and ADELA. 1/ An investment program to promote improved seeds is under preparation with Israeli technical assistance (four experts). The program would consist of the expansion of seed production facilities at Petrolandia 2/ and the establishment of new centers. A preliminary report on the studies will be available in April, 1970. The Maranhao settlement area of SUDENE (at Alto Turi) has been the subject of numerous small technical and marketing studies by SUDENE officials. A British consulting firm is now carrying out an integrated feasibility study of investment in a settlement project in the area covering 10,000 square kilometers. 3/

Specific action in the forestry and animal research priority fields has not yet been defined by SUDENE. A small FAO/UNDP project is under consideration which would produce a plan for forestry development in the Northeast (see Annex 3). A program for controlling animal disease through the establishment of sanitary posts in conjunction with the State Agricultural Secretariats of the region (in particular the Secretariats of Agriculture of Bahia) is under study. A possible element of this program related to the control of foot and mouth disease which could be partly financed by the Interamerican Development Bank. Programs for training agricultural technicians and coordinating research in the region have yet to be defined. USAID has expressed interest in marketing in the Northeast as part of overall assistance to agricultural marketing in Brazil. A preinvestment study of Northeast agricultural marketing has been completed by a Michigan State University group. (Field work was carried out in 1966 and 1967 under two USAID contracts. The full report was published in June, 1969.) Little information exists and no studies are in progress on the related priority field of storage.

SUDENE has now transferred most of its counterpart responsibilities for these investigations to SUVALE. (SUDENE retains responsibility for experimental work on the heavy 'grumosil' area on the Bahia side of the basin

1/ ADELA, a privately sponsored development agency for Latin America.

2/ Petrolandis is a town in the lower middle Sao Francisco Basin where the SUDENE Department of Agriculture and Marketing, with Israeli assistance, has established a small program of improved seed production with sprinkler irrigation.

3/ Field work in Maranhao will be undertaken between April 1970 and August 1971 by seven experts. The terms of reference and the progress of the study are under periodic review by the FAO/IBRD program. ANNEX 14 Page 9 which has been less studied.) 1/ SUVWALE, With the assistance of experienced consultants, has now prepared a proposal for investment in pump irrigation at Petrolina on the Pernambuco side of the Sao Francisco basin. 2J/ SUVALE is also engaged, with a USAID financed USBR 3/ team, in the preparation of large irrigation projects in the upper middle Sao Francisco basin. Concerning the other main area of investigation in the Jaguaribe basin (Ceara), SCEP-Coop, French irrigation consultants, was retained to prepare general surveys and feasibility reports for irrigation from an existing reservoir. 4 This work was completed in late 1969 and a project proposal (Banabuiu) was submitted officially to the IBRD in January 1970. 2/ DNOCS would be the implementing agency for the Jaguaribe project.

Belying on its own technicians, SUDENE has done preinvestment work in preparing tubewell projects for livestock watering points and for the water supply of rural villages. The tubewell studies have been used by the Banco do Nordeste for loan appraisal. The soils Division of SUDENE comprising 16 soil agronomists with university training is carrying out a soils survey for designing the Maranhso settlement project. Currently the Economic Botany Division of SUDENE is conducting experiments in reforestation and the Fish Resources Division is considering a preinvestment study to develop a program for Northeast Fisheries. USAID has expressed interest in providing technical assistance for developing fresh water fisheries in the Northeast.

The Banco do Nordeste and Other Agencies

The Banco do Nordeste studies provide valuable background information about Northeast agriculture, such as studies on farm input and product prices and food demand, a Northeast basic manual of statistics (regularly updated) and a detailed projection of the region's development needs over the next decade. 'The Bank's annual budget for all economic and technical research now exceeds US$500,000, of which over one-third supports agricultural studies.

1/ The division of responsibilities in this instance highlights a fundamental problem within SUDENE of deciding when "planning" stops and "implementation" begins. SUDENE is supposed to do planning whilst agencies like SUVALE are considered "implementing" agencies. The problem is discussed in the last section of this annex.

2/ ThiB feasibility report is for 6,000 hectares and a cost of US$23 million.

3/ United States Bureau of Reclamation.

4/ One of the many large storage reservoirs in the dry areas of the Northeast which have been constructed by DNOCS over the past 50 years. So far they have been of little agricultural use.

5/ The project would cover 8,300 hectares and cost US$30.5 million. Un- like the Sao Francisco proposal, this project would require additional preparation work before appraisal. ANNEX 14 Page 10

In the populous coastal zone of the region, GERAN is coordinating a preinvestment program aimed at the modernization and diversification of sugar production (including some tenure reform). USAID has supported the program and maintains interest in it. The GERAN program covers 103 sugar factories and associated plantations (covering approximately 365,000 hectares and estimated by GERAN to cost US$ 200 million). The program for sugar modernization would -result in the displacement of over 11,000 families, which would be resettled on small holdings.

In the-cacao zone of the Northeast, CEPLAC 1/ has requestedi FAO/UNDP Special Fund Assistance to define a program for increasing productivity in cacao -production. In Bahia, the program proposes the replanting of 150,000 hectares of moribund cacao trees by-1980. CEPLAC staff hope to prepare"a pre-feasibility study of their program by May, 1970. In southern Bahia,'OPALMA 2/ staff are undertaking a feasibility study related to oil palm investment covering 10,000 hectares. The project would rehabilitate smallholders plots of dura palms by phased replanting with tenera palms. The State Secretariat of Agriculture in Bahia is associated with the preparation work due to be completed by mid-1970.

Priorities in the Northeast

The planning by GERAN for resettlement and diversification in the coastal zone requires strengthening. Specific designs for areas to be resettled and the output to be produced are now the responsibility of the estate owners, who comtract small local consultants. Their plans are submitted to GERAN for technical and economic scrutiny. GERAN needs more staff and technical expertise to do this job. There is probably little pressure for plans for resettlement to be realistic.

In cacao, CEPLAC has not prepared a detailed proposal for large- scale investment in planting and rehabilitation but sufficient work has been done on the technical aspects of cacao to provide a base for such a proposal. Project preparation activities should be initiated as soon as possible.

For palm oil, preinvestment work being carried out by OPALMA and the Bahia State Secretariat of Agriculture should, with the exception of soil studies, constitute adequate preparation for the area in the south of Bahia. OPALMA needs advice in the selection of areas with suitable soils in other areas within the national plan for oil palm which is being formulated by the Ministry of Agriculture with IRHO 2/ assistance. 1/ The cacao Commission, in Bahia and Espirito Santo, which is an autonomous agency under the Ministry of Finance. 2/ Oleos de Palma S/A, a private firm engaged in the palm oil agroindustry. 3/ The French Institute for Research in Oils and Fats which is working, under -a French technical assistance grant, on a national plan for the development of oil palm. ANNEX 14 Page 11

The preparation of a settlement plan in northern Maranhao by experienced consultants should open up this field for increased public investment in infrastructure. In spite of recent large population shifts toward the Amazonian frontier, few studies preceded settlement in the zone. Previous investments by SUDENE and other agencies in the northern areas have often proved to be unrealistic. The new project should be designed to induce more rational settlemenit and to affect a wide area instead of concentrating on a highly directed pattern affecting a small group of farmers. Consideration should be given to widening the terms of reference of the study to include a reconnaissance survey of areas in the north of Maranhao outside the SUDENE area which would be suitable for large-scale settlement.

There is an urgent need to define more precisely the level and type of preinvestment studies required for irrigation (in line with the level of irrigation investment which is feasible in the next five years). For instance, in the Sao Francisco Basin, SUVALE (with consultants' assistance) has completed preparation for a 6,000 hectare public scheme at the transport junction, Petrolina. At the same time, however, USAID financed consultants (the USBR team) are preparing large-scale projects in the upper basin. Since only a modest start in irrigated agriculture in the basin seems feasible, it is questionable whether the existing preinvestment activities in the basin can be justified. A similar argument holds true for the multitude of feasibility studies currently under way for using DNOCS reservoirs for irrigation. GEIDA's role in defining preinvestment priorities for irrigation should be particularly valuable to the region. New studies appear justified in the lower Sao Francisco basin, where no significant preinvestment activities have yet begun. Planning for a soil and water resource center in the region would be appropriate at this stage.

Preinvestment work on chemical fertilizers, improved seeds, on- farm storage and applied crop and animal research should be viewed as parts of a package of services for farmers. (The majority of the farms to which such services apply are small and medium sized mixed farms in the Agreste zone.) Schemes for investment in these services must be closely related to extension and credit facilities, particularly those of the Banco do Nordeste. The preinvestment activity for these services should be reviewed by experts to specify future activities, their phasing and organization, as part of an overall farm service package for rainfed agriculture. In the meantime, test demonstrations could produce concrete benefits and also indicate directions for further preinvestment analyses.

Observations on fisheries and forestry preinvestment activities are presented in Annexes 2 and 3. Forestry studies are required to relate Amazonian production to demand in the Northeast. Some further survey work on developing fresh water fish in the DNOCS reservoirs is justified. It is probable that identification of investment projects should not proceed solely on the basis of the technical studies done by the United States Bureau of Commercial Fisheries under USAID contracts. ANNEX 14 Page 12

The Amazon Region

Agricultural preinvestment work in the Amazon is undertaken by SUDAM 1/, and other agencies such as IPEAN 2/, the Institute of Amazonian Studies 3/ and the Rubber Superintendency, who either cooperate with SUDAM or do small-scale studies independently. The preinvestment activities of SUDAN are smaller than those of SUDENE in the Northeast. Similarly, the Amazonian regional development bank 4/ is much smaller than the Bank of the Northeast (BNB) and its program of economic and technical studies is more limited.

SUDAM

The preinvestment work of SUDAM is done by its Department of Agriculture and Livestock, which operates with a staff of about 15 technicians. The-Department is now stressing: (1) an accelerated program of rubber replanting; (2) the initiation of oil palm planting on a commercial scale; (3) the development of Amazonian fisheries (at Manaus); (4) the construction of a wholesale market in Belem; (5) the economic zoning of livestock activities; (6) the development of cooperatives; (7) the improvement of livestock through breeding; (8) an integrated forestry exploitation program.

The level of technieal knowledge on rubber and oil palm in the Amazon limits their development. Nevertheless, SUDAM's rubber replanting schedule calls for the planting of 10 million clones of improved rubber varieties by 1975. Over 2 million clones have been planted since 1967, many in scattered plots maintained by SUDAM employees in various parts of the Para and Amazonas states. However, the limited preinvestment work by IPEAN on the control of rubber diseases has been quite insufficient to ensure that the Dothidella leaf disease problem can be overcome and the expected yield levels attained.

A pilot oil palm project (with IHRO technical assistance), now covering 800 hectares near Belem, demonstrates the value of good management practices and the need for more intensive investigation of the effects

1/ The Superintendency for the Development of the Amazon, set up in 1962 - and operating on a much smaller scale than SUDENE. 2/ The regional research and experimentation institute of the Federal Ministry of Agriculture. / INPA, located in Manaus. 4/ Banco da Amazonia S.A. (BASA). Set up in its present form in 1963 and evolved from the old Rubber Development Bank of the region. ANNEX 14 Page 13 of soil and climatic conditions on palm oil production. Preliminary results indicate a considerable oil palm potential. Selection of areas with suitable soils and topography should be carried out as soon as possible.

For fish, a freezing point and distribution center would be set up in the tax free zone of Manaus to service local investments resulting from the tax incentive funds now flowing into the region. Technicians from SUDAM are working with technicians of the Amazonas state government to prepare the project. Similarly, the central market investment foreseen for Belem would include fish freezing and distribution. A feasibility study is being done by Sao Paulo consultants under SUDAM supervision (to be ready by,mid-1970). A feasibility study for possible storage investments was begun in October 1969 with SUDAM, the state government of Para, and CIBRAZEM participating, to be completed by April, 1970. A study of possible investments in Amazonian livestock is scheduled for completion in February, 1970.

The SUDAM Division of Forestry has supervised a feasibility study of an integrated forestry development project near Santarem in Para (completed by the consulting firm A. Araujo S.A.). The project would exploit the natural tropical hardwood forest first, followed by a replanting program related to pulp and sawnwood production. Another integrated forestry project at Jari in Para is already being implemented by private enterprise. Technical studies of livestock are being carried out at the site by the IRI Research Institute under a private contract. The Jari project would cover cattle and rice as well as forestry.

The Amazon Development Bank

The regional development bank, the Banco da Amazonia S.A., employs 52 agricultural technicians and maintains 54 branches in rural areas. It is the investment channel for the allocation of funds under the tax incentive law to promote private investments in the Amazon., Unlike the Northeast, in Amazonia a significant share of tax incentive funds are being invested in agriculture. The bank's rural credit program is modest (approximately US$5 million per year, a large part for cattle and rubber operations). In spite of recent expansion in the rural lending of the Bank, little preinvestment work has been carried out or is planned. The Department of Economic Studies carries out a few general economic studies yearly but these have not been related directly to the Bank's lending operations.

Priorities in the North

Programs of rubber and oil palm planting have potential, but more preinvestment work is needed. For rubber, considerable varietal and other research remains to be done, especially on disease control and related aspects. SUDAM, IPEAN, and the Rubber Superintendency require expert technical advice to formulate a program of research prior to the planned large- scale rubber planting investment. For oil palm a survey of topography ANNEX 14 Page 14 and soils simedlat selecting suitable areas for oil palmi_in the region is needed. Bilateral or other technical assistance to SUDAM would be helpful for part of the survey. IPEAN should be able to make studies of the relation between production and soil characteristics at the pilot project near BelemL Forest y preinvestment activities should be expanded. The current SUDAM-sponsored feasibility report for the large-scale integrated investment project near Sants7em requires supplemental work, especially on capital cost levels during the tarly stages of such a project. The suitability of alternative sites shoa-A'be assessed. For the Jari project, there should be more open interchange mf preinvestment information. Studies of specific transport and marketing requirements for proposed'large-scale forestry investment deserve attentian. Official regulations for minimum log prices and exploitation proceduresrdlso merit analysis to pinpoint disincentives to Amazonian forestry developmeut. Preinvestment studies of livestock development, especially under the tax incentive program, are needed. One task is to assess the potential in northern Mato Grosso and in the Belem area, given limited local markets, high transport costs, and inefficient coastal shipping. Another is to determine the extent to which investments now going on represent land speculation and to examine the development which follows the type of clearing and exploitative grazing now being financed. Technical assistance would be helpful to SUDAM for such investigations, which are fundamental to an economic zoning exercise or to livestock investment proposals.

The marketing and storage preinvestment activities relate to fields which should not necessarily have high priority for this region. In this connection, preinvestment work on tropical Amazonian fruits is apparently insignificant. This is an area on which a possible second phase of the FAO/UNDP Special Fund food processing project (now located in Campinas, Sao Paulo) could focus.

The South

Agricultural preinvestment activities in the three southern states of Parana, Santa Catarina, and Rio Grande do Sul are now being promoted by the new regional development superintendency, SUDESUL. Formerly these were initiated by; agencies such as DNOS 1/, IRGA 2/, FECOTRIGO 3/, and the State 1/ The National Department of Sanitary Works which has concentrated in the field of irrigation. D0OS is adminlistered by the Ministry of the Interior. -2/ The Rio Grande do Sul Rice Institute. 3/ The FederatIron of Wheat Growers' Cooperatives, operating mainly in Rio Grande do Sul. ANNEX 14 Page 15

Secretariats of Agriculture. As SUDESUL is a new organization (set up in December 1967), its preinvestment work is still at an early stage. Prein- vestment activities are coordinated by the Department of Agriculture and Industry, which currently employs 12 technicians.

The approach of SUDESUL to preinvestment is to coordinate large- scale studies aimed at diverse investments covering wide areas. 1/ The major study of this type under way pertains to the southwestern part of Rio Grande do Sul (on the Uruguayan border). TAHAL, an Israeli consulting firm, has been engaged to prepare a feasibility report on a package of interrelated agricultural investments. The project is called Sudoeste No. 1, and the investments foreseen are mainly in irrigation and livestock. A draft of the feasibility report is expected to be ready by November 1970. A second such study to cover the Iguacu zone of western Parana is planned. TAHAL is to begin this study in February 1970; it is expected to take 18 months. Possibilities for projects of the same type in other areas are being investigated by SUDESUL.

SUDESUL is also supporting the research and extension activities of ACARESC 2/ related to a large fruit tree replanting program (mainly of pears and apples) in Santa Catarina, with imported varieties and using improved practices. In addition to extension work on this project (coordinated with the State Secretariats of Agriculture in Santa Catarina), SUDESUL is also planning to undertake studies of farm extension services in Parana and in Rio Grande do Sul.

The Natural Resources Division of SUDESUL, staffed by four technicians, is investigating (with consultants' assistance) the commercial exploitation of lime deposits. InexpenBive lime could be valuable in combat- ting soil acidity. The Division, through convenios with several universities, has also begun soil mapping and aerial photography.

DNOS and IRGA are making preinvestment studies of improved dry land pastures combined with paddy rice irrigation in Rio Grande do Sul. This work is focused on the proposed 180,000 hectare irrigation project at Camaqua and the 50,000 hectare Duro scheme already in operation within the Camaqua area. A feasibility report on the large project will soon be completed by a consortium of consultants to DNOS (Sondotecnica, OTI, and ITECSA). There are fundamental problems of water use, rice disease control, and improved pasture to be solved (many common to a wide area in Rio Grande

1/ An integrated regional development program in the Santa Rosa area in the center of the state provided a favorable experience which SUDESUL seeks to promote. In the Santa Rosa case a widely dispersed effort, with USAID support, resulted in markedly higher productivity levels for both crops and livestock.

2/ The state rural extension association, part of the independent ABCAR system. ANNEX 14 Page 16 do Sul). Such problems are also under investigation by the FAO/UNDP Special Fund Project at,Mirim Lagoon in the extreme south of the state, although no significant investment possibilities have yet emerged there. IRGA employs 19 agronomists specialized in paddy rice culture who assist farmere in designing small-scale itrigation facilities. These technicians contribute to an annual -IRGA survey of the cost of rice production which provides the most detailed perirodic information on rice in Brazil. 1/

In RtofGrande do Sul, the IICA is studying the economic potential for agriculturil development under different tenure systems. The survey comprises naturaxresources, the present land tenure structure, and population density. -'The report is to be completed in March 1970. Tedinical and economic preinvestment activities on livestock development min?Rio Grande do Sul are carried out by the state government's livestock research unit at the Bage experimental station and by the Agricul- tural Department ,of the University of Santa Maria do Rio Grande do Sul. (An FAO/UNDP proje-ct strengthening the livestock facilities and teaching of the university has been approved but is not yet operational.)

Priorities in the South

There has been considerable private preinvestment work in the south, although no measure exists. Public agricultural preinvestment activities in the south are now being strengthened particularl.y through SUDESUL. There are some basic problems on which more preinvestment work is justified. Stagnant rice yields and low carrying capacity of pastures have been fairly well studied at experimental stations in Rio Grande do Sul. Answers may relate to large-scale irrigation, as at Camaqua. (The small and often inadequate private irrigation works limit the technical choices in solving these problems.) The present Camaqua irrigation plan will need modification to lower costs and to approve the production effects of the land tenure situation. In connection with land reform, the current IBRA/ IIAC survey may prove valuable in estimating the effects on production and development of rice sharecropping.

Much of the preinvestment work on livestock has been on disease control and the technical possibilities for pastures. There is a need to concentrate more on farm management and general animal husbandry studies and on farmer'responses to incentives. Studies of livestock breeding are of lower priority.

1/ In the 'Northeast, the Bank of the Northeast carried out an excellent survey of.xi±ne production in the frontier state of Maranhao (in 1968). No surveys for the center west are known to the mission. ANNEX 14 Page 17

SUDESUL plans to support preinvestment work in agriculture rather than become directly involved. Given the apparent extent of private and other public preinvestment activities in this region, any new public programs should aim at specific problems and related investments rather than on overall surveys as might be justified, for instance, in the Amazon. The priority of area development studies, such as Sudoeste No. 1, should be reviewed in this regard. It is questionable whether, as a general proposition, such broad studies are the most efficient way to promote agricultural investment in the region.

The West (Goias and Mato Grosso States)

Agricultural development has been accelerating in these areas recently. Settlement by small and medium farmers with mixed crop/livestock systems (based on hand labor) is underway. Large-scale paddy rice exploitation (in the Pantanal zone), and large-scale livestock grazing operations (on natural grass pastures in the Pantanal zone and on cleared scrubland in the cerrado areas) are also developing. There has been little influence from public state and federal agencies, and-little preinvestment work.

Although most settlement of small and medium sized farms is occurring spontaneously, IBRA and INDA 1/ have since 1964 supported small farm colonization schemes in Mato Grosso and in Goias 2/. Recently, the schemes operated by INDA were transferred to IBRA responsibility (as of April 1969; some related INDA technical staff have also been absorbed by IBRA). The preinvestment work so far undertaken by the two agencies has not been well coordinated; much of it has been of an a posteriori nature. Actual project results, periodically surveyed by IBRA's Depart- ment of Operation Projects, provide limited technical and economic information.

Research on cerrado soils which predominate in the region has been conducted by EPE of the Federal Ministry of Agriculture with IRI assistance S/, partly financed by USAID. The stations are run by the EPE regional research organization for the Center West (IPEAC0). The adaptation to cerrado BoilS of rice, beans, soy beans, maize, and improved pastures has been investigated technically, especially the problem associated with the high aluminum content and high acidity of these soils.

1/ National Institute of Agrarian Development, autonomous under the Ministry of Agriculture.

2/ As of late 1969, over 20 schemes varying in size between 200 and 1,000 farmers were administered. Of these, four were in the central west area.

3/ International Research Institute, sponsored originally by the Rockefeller Foundation and supported more recently by USAID grants. ANNEX 14 Page 18

Large-scale paddy rice production operations have very recently begun in the Pantanal zone of southwestern Mato Grosso State. Using rice varieties selected by the State Department of Agriculture, farmers in the Pantanal zone now produce crops yielding four to six tons of paddy per hectare. The only public preinvestment study under way in the Pantanal is the UNESC0/UNDP survey of hydrological resources. No agricultural development surveys exist and only limited agricultural investigations are being done by public agencies in the zone.

Preinvestment work in livestock development is to be centered at the recently constructed IPEA0 1/ research station at Campo Grande in Mato Grosso State.: The research now going on at the station is focused on soil fertility problems related to pasture development. The station was set up in 1968, and few results have yet been obtained. The station may become the center of a large-scale livestock research and development project to be financed by USAID 2/. A possible alternative proposal is under consideration whereby an FAO/UNDP Special Fund livestock development project for the State of Sao Paulo might be extended to cover Mato Grosso and Goias. SUDECO 3/, the most recent of the federal regional development superintendenciJes, is based in Brasilia. The agricultural preinvestment program of SUDECO is not yet defined; it should take shape by the end of 1970. SUDECO will soon be in a position to coordinate major new preinvestment activities.

Priorities in the West

Cerrado soils characterize wide areas of the west (from the northern edge of the Pantanal zone in southwest Mato Grosso to the Amazon basin in the extreme>',north of the state, over most of the Goias and into Minas Gerais and eve'n part of Sao Paulo). Research by IRI and recently by the new IPEAO regional research center has focused on the correctives (fertilizers and trace elements) and improved planting materials necessary for high yields. The studies have been almost wholly technical. Although it has been shown that good crop yields and improved pasture can be grown, the economic return and the farm management required by the techniques have not been sufficiently studied. The fact that until now such techniques have not been adopted by many farmers suggests that land-intensive methods may be more economic given the current high price of modern inputs. A study is required of the costs of distribution and marketing of fertilizers, lime and other inputs required to improve crop and pasture yields on the cerrado soils over wide areas. This study might also assess methods of inducing farmers to adopt necessary management techniques. 1/ The Institute of Agricultural Studies and Research for the West, part of the 'EPE organization under the Ministry of Agriculture. 2/ A study of the feasibility of such a scheme was recently completed by a USAID financed IRI livestock research team (1969). 3/ Superintendency for the Economic Development of the Center West, autonomous under the Ministry of the Interior. ANNEX i14 Page 19

A comprehensive survey of settlement experience and potential in the West would be of value in pinpointing specific investment opportunities. 1/ An initial survey would identify the obstacles to spontaneous settlement and indicate profitable areas for public investment. It would assess appropriate farm sizes and types for various zones and evaluate legislation and institutional patterns which affect the present forms of settlement.

The present UNDP Special Fund project in the Pantanal zone of Mato Grosso might be expanded to include agricultural, marketing, and transport studies. Development can be expected to proceed rapidly under private initiative, and the necessary public infrastructure to accelerate this development needs to be identified. There is a danger that the zone could be opened up to an exploitative agriculture which would give rise to problems later, such as in the rice culture of Rio Grande do Sul. The regional agencies IPEAO and SUDECO should design preinvestment programs for the zones.

The rapid development of livestock has occurred without elaborate technical and economic surveys. The pattern was one of clearing scrubs and woodlands and planting rice and maize for several years, followed by grazing on natural grasses. Technical research aimed at improving those natural pastures is being carried out on only a modest scale. It needs strengthening. In addition, economic, financial and management studies are required. There are three proposals to do this, one through an FAO/UNDP Special Fund project, and the others through British and USAID bilateral assistance. 2/ These technical assistance sources can serve different needs. SUDECO might consider coordinating a joint program for such preinvestment work, and discuss it with the three interested aid sources.

SUDECO will play an increasingly important role in coordinating agricultural preinvestment in the west. One of SUDECO's main functions should be to design and sponsor agricultural preinvestment programs. It should avoid direct involvement with public investment programs in execution.

1/ The Inter-American Development Bank recently financed a broad survey of settlement projects in Latin America, of which a part covers the experience in western Brazil.

2/ In 1968, a British mission (livestock/pasture) visited the area to identify fields for technical assistance. In 1969, a small UNDP mission visited the west among several other areas, and in the same year an IRI team, sponsored by USAID, prepared a report on possible technical assistance for livestock development in the west. ANNEX 14 Page 20

Sao Paulo

Agricultural preinvestment in Sao Paulo is undertaken by the State Secretariat of Agriculture, the Department of Water and Electric Power of the State Secretariat of Public Works, and various interest groups such as the IBC 1/ and the Cotia Cooperative 2/. There has been a great deal of private agricultural preinvestment vork also (many small technical and economic private consulting firms are based in Sao Paulo). Within the State Secretariat of Agriculture, the Institute of Agricultural Economics and the Institute of Agronomy are specifically concerned with agricultural preinvestment.

The state has not attempted to systematically order investment and preinvestment priorities in agriculture. The institute of Agricultural Economics has carried out comprehensive statistical studies and analyses of agriculture in the state / and the Institute of Agronony has pursued a program of crop research, in most cases pertinent to local agricultural problems. Nearby at Nova Odessa, the Department of Animal Sciences of the State Agriculture Secretariat pursues a large program of livestock research (mainly cattle).

A significant change is currently taking place in preinvestment programming in Sao Paulo. The State Secretariat of Agriculture is developing, with outside assistance, a program of agricultural development investments and related preinvestment priorities. A report is to be issued by the Agricultural Economics Institute in April, 1970.

In the-field of irrigation, preinvestment studies are under way or recently completed for further development of the Paraiba, Tiete, and Ribeira valleys. The studies are coordinated by the Department of Water and Electric Power of the State Secretariat of Public Works. Recently, a State Superintendency for the Development of the Ribeira Valley was set up under the' State Secretariat of Planning. This Superintendency will in future coordinate studies in the Ribeira Valley. None of the studies in these valleys has been taken to full feasibility standards.

1/ The Brazilian Coffee Institute, loosely connected to the Ministry of Industry and Commerce.

2/ The largest farmer's cooperative in Brazil, operating in Sao Paulo and to a more limited extent in Parana.

3/ The most recent report on The Develorment of Paulista Agriculture was completed by the Institute in February 1970. ANNEX 14 Page 21

Priorities in Sao Paulo

The state is well developed agriculturally. It is capable of carrying out necessary agricultural preinvestment with its own resources. The program for agricultural preinvestment now being designed by the Se- cretariat of Agriculture should provide a rational approach for preinvestment work. Two fields which justify more study are sprinkler irrigation for private schemes (for coffee, and other crops) and the development of the Ribeira Valley, an economically depressed zone of 250,000 people in the litoral south of the State. In the latter, flood control and feeder roads projects have been prepared, but not to satisfactory feasibility standards.

Minas Gerais

Agricultural preinvestment activities in Minas Gerais are conducted by agencies operating at the state level. SUDENE is not promoting preinvestment activities in Minas Gerais, although its authority covers part of the northeast portion of the state. SUVALE, vhich has authority in part of northwest Minas Gerais, has done only limited work. (Currently a feasibility study of irrigation at Jequitai is being proposed with USAID assistance.) There are over 30 state organizations with agricultural responsibilities in Minas Gerais. Of these, the State Secretariat of Agri- culture, RURALMINAS 1/ and CODEVALE 2/ are important in preinvestment work.

The IBC, through GERCA 3/, has completed a series of technical and economic studies concerning diversification out of coffee. GERCA also maintained a contract with the BNDE 4/ whereby technicians of the latter made feasibility studies for processing plants for such alternative crops to coffee as cotton, soybeans, groundnuts and mraize. Recently the IBC, through GERCA, has made technical studies on a proposed coffee replanting program (following the 1969 frost and drought damage to existing plantations). This program applies also to Parana, Minas Gerais and Espirito Santo.

In the large Mogiana Cooperative region (Sao Paulo extending into part of Minas Gerais) a UNDP Special Fund Project has been concerned with technical assistance to farmers and with diversification planning. The USAID, the

1/ The Mineira Rural Foundation -- Colonization and Rural Development.

The Development Commission of the Jequitinhonha Valley in the Northeast.

2 GERCA is the large-scale program under the IBC concentrating on coffee diversification. It has recently scaled down activities as a result of the impending coffee shortfalls caused by the 1969 frost in Parana.

4/ The National Economic Development Bank (Rio). AmNX 14 Page 22

Inter-American Development Bank, and the IBC program (noted above) are also active in promoting the development of the Cooperative. The Cotia Cooperative supports a continuous program of preinvestment studies covering the handling1 processing, transport, and marketing of the diverse crops and animal products produced by its 12,000 members. Cotia also maintains several small experimental and research stations and has undertaken preinvestment studies of intensive poultry production. The practical findings from these studies are useful throughout the state and are often published. 1/

The eIpwftment of Rural Economics of the State secretariat of Agriculture has completed extensive production cost survey of the main crops and li-vestock of the state. The Department's program for collection and publication of agricultural product prices at all levels is among the best in the country. In-Minas Gerais, unlike Sao Paulo, both ABCAR 2/ and EPE 3/ support agricultural service activities. The rural extension service, ACAR 4/, is-working closely with local banks in advising farmers under supervisectand oriented credit schemes. Agronomic research at several IPEACO / stations in the State has been concentrated on coffee, cotton, rice, maize, soybeans, horticulture and dairying.

The .Institute of Rural Economics at the Rural University at Vicosa has supported an expanding program of micro-economic studies. (For instance, a study of on-farm storage has recently been initiated covering Minas Gerais and several other states). Small-scale feasibility studies are often undertaken by the research staff and students at Vicosa. Agricultural planning at macro-economic levels is done through CEDEPLAN i /and the State Development Council 7/. RURAULMNAS and CODEVALE are broadly based regional development agencies operating within the State.

1/ The monthly journal, COOPERCOTIA, is perhaps the most popular bulletin of agrictiture preinvestment work in Brazil. 2/ The independent rural extension organization of Brazil. 3/ The Office of Research and Experimentation of the Ministry of Agriculture. 4/ The Association of Credit and Rural Assistance in Minas Gerais, which mainly does farm extension work. Part of the ABCAR system. S/ Institute;for'Agricultural Studies and Experimentation of the Center West, under the EPE organization of the Ministry of Agriculture. 6/ The Center for Regional Development and Planning, attached to the Faculty of Economic Sciences of the Federal University in Minas Gerais, at Belo Horizonte. 7/ The Council works closely with the Minas Gerais Development Bank. The Office :ofTA:snning and Control is designing a three-year development plan,for the State. The council receives assistance from the Ministry of Planni.ng rand from the Latin American Institute of Economic and Social ?Planning of the U.N. ANNEX 14 Page 23

In the northwest, RURALMINAS is doing preinvestment work related to a settlement project including six rural centers, irrigation, electrification, farm credit and mechanization. This large regional project is scheduled for financing by the Inter-American Development Bank (IDB) 1/. RURALMINAS has received technical assistance from the Inter-American Development Bank to prepare the project for appraisal, and the loan itself will cover a substantial amount of technical assistance.

The other major development commission, CODEVALE, has authority in the depressed Jequitinhonha Valley in the northeast of the State (with about one million rural people). The CODEVALE staff of 16 technicians, based in Belo Horizonte, have so far published a number of general studies of development in the valley but have not done feasibility studies. Arrange- ments (convenios) with outside agencies for soil studies and related investigations are in progress, although no large-scale public investment follow- up programs have yet been designed.

Priorities in Minas Gerais

The projected large-scale investment by the IDB in the RURALMINAS area in the northwest of the state has led to a concentration of agricultural preinvestment work there. This is a good example of the impetus which is given to preinvestment work once interest in actual investment financing is expressed. There is a need to examine the marketing position of the area, especially in relation to the possible development of SUVALE sponsored irrigation schemes in the uppor middle Sao Francisco Basin. The CODEVALE areas in the depressed northeast part of the state should be the subject of agricultural preinvestment work on a similar scale. This has not yet occurred, partly because no large financing agency has expressed interest in the area.

The activities of the Minas Gerais Development Council and of the Development Bank in agriculture should include a specific element of preinvestment programming. Either the Secretariat of Agriculture or the Development Council should support a survey which would lead to the design of a rational agricultural preinvestment program as in Sao Paulo.

The United Nations Development Program (UNDP),

The UNDP provides foreign technical assistance for agricultural preinvestment work through its Technical Assistance and Special Fund Proj- ect programs. Technical assistance and Special Fund Projects are requested by the Brazilian Government and, if they are approved, FAO supplies experts on fixed term assignments (of up to four years) through the cooperation of UNDP Headquarters in New York. At present, the approximate number of FAO/ UNDP professional staff in Brazil is 50, of whom 15 are on individual technical assistance assignments and 35 are working within agricultural Special

1/ The total cost of the project will be approximately US$30 million. ANNEX 14 Page 24

Fund projects. It is expected that the FAO staft on Special Fund projects will be increased to over 50 experts by the end of 19T0. The agricultural technical assistance personnel are distributed among diverse agricultural organizations. Because of this ad hoc pattern, it is not possible to evaluate the impact of these experts on preinvestment work.

The total cost of UNDP Special Fund projects so far approved is approximately US$70 million, of which just over half is for agricultural preinvestment projects executed by the FAO. Of a total of 24 projects approved, 10 are- directed toward agricultural preinvestment. Only three FAO/ UNDP Special Fund projects have been completed and all are expected to be followed-by second stage projects. Five projects are currently in operation and three have been approved and will be implemented shortly. The UNDP has been officially notified by the Brazilian government of requests for seven additional Special Fund projects and it is understood that the government expects to make three additional project requests. The distribution of these projects among agricultural fields is not guided by an established pattern of priorities, although UNDP and FAO personnel often advise on project requests and all requests are scrutinized from the standpoint of technical and administrative feasibility when they are presented.

Even though the FAO/UNDP programs of agricultural preinvestment activities have expanded rapidly in Brazil, they are still a comparatively small part of overall public agricultural preinvestment activity. The impact of large Special Fund projects in inducing agricultural development investment and in influencing policy has been highly variable. Particular success has been achieved in forestry and fisheries. In irrigation, a preinvestment project in the lower middle Sao Francisco Basin provided essential information for an irrigation investment project (now being considered for financing by the-IBRD). Other projects appear to have had less impact until now. These Special Fund projects are revieved below,.

Fisheries

A broadly defined first phase Special Fund project in fisheries assisted in the formulation of official fisheries policies (196T/1968). A second phase project (1969-1972) will continue assistance to the national Superintendency for the Development of Fisheries (SUDEPE), advise state governments on local fisheries development, explore fisheries resources and coordinate fisheries research and development.

SUDEPE is short of technical staff to provide adequate preinvestment services for the large amount of proposed investment in fisheries (mainly shrimp for export) which is resulting from the special tax incentive Law 221. The UNDP project is helping SUDEPE build up its general capability. The FAO/UNDP Special Fund Project and an FAO/IBRD Program mission helped initiate preinvestment studies for fisheries' ports to service the greatly expanded investments in boats and equipment which have taken place recently. A private consulting firm, PLANAVE, is currently making a feasibility study of a fisheries port proposal at Rio Grande do' Sul; the study ANNEX 14 Page 25 is scheduled for completion in May, 1970. The same firm has been asked by the State of Sao Paulo to prepare a similar investment project at the port of Santos. (The contract was to be signed in February, 1970 and the report to be ready by the end of 1970.) Although the source of investment funds for these two projects is not yet determined, the IDB has expressed interest. The State of Rio de Janeiro itself intends to invest in developing fish port facilities at Niteroi, which were also recommended by the UNDP project.

There is need to link these studies and preinvestment work on fisheries resources exploitation with-plans for the development of domestic handling, processing, distribution and marketing. Related to this, a study is required of alternative grading systems and new official regulations affecting the industry. One purpose of such investigations would be to encourage investment in fisheries products for the domestic market.

Forestry

The purpose of the first UNDP forestry project was to strengthen and expand the training of forestry engineers at the Brazilian National Forestry School at Curitiba 1/ and to initiate a national forestry research program with the Ministry of Agriculture and more recently with the Brazil- ian Institute of Forestry Development (IBDF) 2/. Although the school is now well established (supplying over 100 graduates per year), much work remains toward the latter objective, especially since large investments are now flowing into the forestry sector as a result of the 1967 tax incentive law. Details of the final proposal for a subsequent UNDP Special Fund forestry project are not yet known 3/, although it is certain to receive high priority form the government.

The project will help IBDF to develop a coherent national policy for private reforestation and afforestation investments under the tax incentive scheme, particularly in the South (where most investments are occurring). Technical assistance would be given for the economic zoning of forestry in the South. The new project should be particularly important in assisting preinvestment work on investment possibilities in integrated forestry exploitation in the Amazon (now under investigation by SUDAM) and in a large regional credit scheme for reforestation and afforestation in the South.

1/ Now a faculty of the University of Parana.

2/ Autonomous under the Ministry of Agriculture, established in 1967.

3/ A UNDP mission evaluating the initial request for this project was in the field at the time of the mission's visit. ANNEX 14 Page 26

Irrigation

FAO/UNDP Special Fund projects in irrigation are under execution in the Mirim Lagoon area of Southern Brazil (and Northern Uruguay) and the lower middle Sao Francisco Basin of the Northeast. The Mirim Lagoon project will, by the end of 1970, prepare a general development plan for the region, identifying projects (notably irrigation schemes for rice and improved pasture) to pre-feasibility standards. Projects of interest to the two Governments will subsequently be investigated possibly as UNDP mini- projects. At present there are no well identified projects of interest in the Brazilian-area. However, the development plan, to be produced by the end of 1970, should be reviewed. The studies thus far carried out are technical, and few economic, financial and marketing studies have been made.

The phase one Sao Francisco River Basin UNDP project fulfilled its objectives in carrying out a broad survey of the technical and economic feasibility of irrigation in the lower middle Sao Francisco Basin. "Semi- detsiled" designs were prepared for a number of possible schemes, of which one has been investigated to feasibility standards by private consultants for possible IBRD financing 1/. The objective of the phase two project (to be completed this year) is to establish two pilot projects: one on light and one on heavy soils on either side of the Sao Francisco River near Petro- lina. The project on the light soils is now-well established and has given valuable experience to SUVALE (and information for the appraisal of the investment project noted above). For the more fertile heavy soils, which require different farming techniques, the pilot proj.ect has been designed but not constructed.

The UNESCO/UNDP Special Fund project to investigate the hydrology of the Upper Paraguay River Basin (Pantanal) area has implications for the development of irrigated agriculture and related water transport, especially since private irrigation development for rice is now expanding in the zone. Consideration should be given to including an agricultural development preinvestment study as part of the project.

Agricultural Processing

The FAO/UNDP Special Fund project (1964-1969) for agricultural processing at the Tropical Center for Food Research and Technology in Campinas is concluding its work. This project was carried out in response to a request from the State Government of Sao Paulo, and has helped to build the Tropical Centre into a strong and effective institution. The project emphasizes the engineering involved in processing and has not been especially concerned in the key practical problems such as occur with marketing. Never- theless, as a result of the research work under the project, some expansion

1/ The Petrolina Irrigation Project, for which the final feasibility report was prepared by the Israeli consultants, TAHAL, in cooperation with SUVALE, the implementing agency. ANNEX 14 wage 27

of investments in the industry has occurred in Sao Paulo. However, even before the project, Sao Paulo was the center of the food processing industry in Brazil j/.

Now, as perhaps before, there is a strong case for combining this kind of technical work with financial evaluation and marketing surveys in the states where agricultural processing is relatively undeveloped but where potential exists. There are some places where the lack of adequate processing facilities clearly limits the development of agricultural production. For tropical products this would be true in many of the North- ern and Northeastern states. The UNDP are considering a second phase of this project which would be based to service these regions, allied with the Special Secretariat for Assistance to Science and Technology of the State Government of Bahia. / The recommendations of the joint FAO/UNDP mission to investigate possibilities for the new project are expected shortly. The new project, although based in Bahia, should service the needs of applied technical research in agricultural processing of the Northeast and the Northern regions in general.

Diversification

The Special Fund project for agricultural diversification in the Mogiana region (1969-1973) covers a relatively rich farming area of Sao Paulo and Minas Gerais. USAID, IDB, and IBC also do preinvestment and investment work in this area. USAID is sponsoring a storage distribution and marketing complex and IDB has made a loan for rural credit. The GERCA program of IBC has been monitoring a program of diversification. The terms of reference of this project are very broad; they include farm planning, management assistance to farmers, and various training facilities and programs. Since the project began, the general objectives of coffee diversification in the region have been transformed to coffee planting and rehabilitation because of the change in the coffee outlook resulting from the severe frost in Parana in 1969. There is a need at this stage to consider relocating this type of project to areas where assistance in farm management is more necessary such as in the agreste zone of the Northeast. Sao Paulo is quite self-sufficient with regard to farm management.

Pesticides

The Special Fund project for strengthening the Biological Insti- tute of Sao Paulo in research and experimentation with pesticides (1968- 1971) has worked closely with the chemical industry of Sao Paulo; much of the research work has been concentrated on coffee and on other crops grown in Sao Paulo. A shifting of such assistance to areas such as the North- east or northern Minas Gerais where work on pesticides is lacking, should have priority in the future.

1/ It is estimated that roughly 5,225 of the 9,950 food processing industries in Brazil are located in Sao Paulo. 2/ Established in 1969, evolving from the Bahia Institute of Technology. ANNEX 14 Page 28

Other Fields

Special Fund project requests are approved or pending approval (probably after some revision) in cacao production, research for improving wheat yields, research and training in livestock (cattle) production, and an inventory and development study of hydrological resources in the Northeast. As of December, 1969, requests were contemplated for a study of improved fertilizer distribution in the Northeast,,agricultural planning support services for the Ministry of Agriculture, end UNDP forestry projects for the Northeast (SUDENE) and the south (SUDESUL).

Most of these project requests are set out in very tentative form at present. The cacao project could provide valuable technical assistance to support investments currently under consideration for rehabil- itating the cacao areas. The wheat research project has scarcely begun operations and will concentrate on the developing varieties able to cope with soil aluminum toxicity and the absence of key trace elements.

In livestock research, projects are proposed in the Northeast and in the'West to investigate improved pastures, supplemental feeding, and disease control, among other factors, under different ecological conditions. The project in the Northeast is at. present conceived as a pilot operation, as contrasted with research and experimentation in the West. A project for improving teaching at the Veterinary School of the Federal University of Minas Gerais has been officially requested by the Brazilian government, while a project for livestock education at the Federal Univer- sity of Santa Maria in Rio Grande do Sul has already been approved.

The planned request for UNDP Special Fund.assistance in carrying out detailed feasibility studies for investments in fertilizer distribution in the Northeast deserves high priority. Possible,forestry projects in the Northeast and South should be reviewed once the detailed terms of reference of the new full-scale Special Fund forestry project are known. ANNEX 15

FERTILIZER AND FARM MACHINERY

Fertilizers

Farmers in Brazil used increasing quantities of fertilizers beginning in 1967, after usage remained static over the preceding six to eight years (Table 15-1). Improvements in prices, credit, soil testing services, and knowledge of the conditions under which use of fertilizer is profitable contributed to the rising trend.

The use data for 1969 were not available at the time this report was written (except for soluble P 2 0, which increased around 15 percent between 1968 and 1969), but they arg expected to show a continuation of the very high rate of increase in fertilizer consumption of recent years. Consumption varies greatly by region. Nearly 90 percent of the total is in the four southernmost States.

EveA,where used most heavily the rate of use is low as compared to most countrifes. The following data show nutrient consumption in kilograms per hectare of arable land: 1/

N p205 KP2O

Belgium a/ 130 135 173 Greece a/ 34 26 4 Spain a/ 18 15 4 UAR a/ 98 16 0.3 Mexico a/ 11 2 0.3 India a7 3 1 0.4 Brazil b/ 2 4 2.6, Rio Grande do Sul b/ c/ 4 14 3.7 a/ In 1964-65. b/ In 1968. c/ The most southernly state of Brazil. Obtaining economic responses to fertilizer applications in Brazil is difficult and often uncertain. Liming is generally required to correct acidity and aluminum toxicity, and minor element deficiencies may be encountered, commonly sulfur. Responses to fertilization appear to be light on many-soils even when all known practices have been used.

1/ These data are from Peter Knight, Agricultural Modernization in Rio Grande do Sul, Brazil, draft manuscript, May 1969, p. II-10. On page II-8 Knight notes that "....apparent consumption of the major nutrients has increased strikingly over the period 1955-68. The average annual compound rate of growth was 15.6% for N, 7.1% for P205 and 11.4% for K,20." ANNEX 15 Page 2

When the gross value of the crop is low, even a substantial percentage response may not be profitable. Taking these facts into account, it was estimated in 1964 that-only about 10 percent of the cropland warranted moderate to heavy applications of fertilizer. 1/

The optimum rates of use of fertilizer are not known for many of the soils and crops. Where they are known, and found to be high, common practice seldom approaches the optimum. The same is true of lime.

Knight cites three cases which illustrate the diversity of out- comes from.use of fertilizer in Brazil. In the first'example, he notes the following concerning lime on wheat at Girua (Rio "Grande do Sul): 2/

"Cost: 2 tons of lime per ha at NCr 40 per ton - NCr 80;

Additional output due to lime: 309 kg per'ha in each of 4 years;

Product price: NCr 380 per ton, bulk, it interior points;

Present value of increased output for 4 years (at 25%) - NCr 350;

Conclusion: the investment pays for itself in the first year."

The comparable data for lime on wheat at Chapada (Rio Grande do Sul) showed 2.5 tons of lime increasing yield'by 95'kilograms per hectare. The cost was NCr 100, the present value of the 4-year increment in return was NCr 107 at a 25 percent interest rate. 2/ In co'ntrast to the preceding example, these data sugges't that farmers are not alWdys wrong when they say that liming may not pay.

A third case is of interest. "In a detailed-examination of the profitability of fertilized artificial pastures planted in rotation with rice, Johnson and Oliveira found an annual profit 6n 'investment of 28 'percent. This study was meticulous in including costs, including liming, additional fencing for better control of grazing, and 'others .... To obtain the most favorable results, the pastures must be carefully managed and the cattle sold in the between-harvest period whlen prices are highest." 3/

1/ Robert Cate. Sugestoes para adubacao no base de analyse de solo. North Carolina State University International Soil Testing Project, Recife, 1965.

2/ OP. cit., p. II-30.

3/ Quoted by Knight, op. cit., p. II-34. ANNEX 15 Page 3

One of the important determinants of the financial return to fertilizers is their price in relation to the product price. In relation to wholesale prices of farm products, fertilizer prices in Rio Grande do Sul about doubled from 1960 to 1965, then fell about 40 percent in two years. They remained relatively stable during 1967-69 (Table 15-4). Phosphate prices are high compared with foreign prices. As noted below, around 40 percent of the phosphate supply is produced domestically, and the industry is protected from foreign competition. One important effect is to retard pasture development. Phosphates are essential to pasture development in many parts of Brazil.

Average prices for fertilizers in several States in December 1968 were (in NCr per ton) 1/:

Rio Grande do Sul Parana Sao Paulo Pernambuco

Ground limestone 43 33 -- --

Potassium Chloride 240 250 220 330

Ground Phosphate 200 260 180 --

Nitrocalcium 260 280 220 --

kAmonium sulphate 260 270 220 330

Single supsrphosphate 200 200 190 --

Prices paid by farmers vary considerably by location within states. For example, in 1969 the high and low prices at major country distribution points in Rio Grande do Sul were:

Lime NCr 35 to 62 per ton Urea 520 to 600 Triple Superphosphate 320 to 400 Potassium Chloride 230 to 350

Government credit for fertilizer purchases has been available to farmers in recent years without an interest charge, as compared to the 9-18 percent rate for most other purposes (however, in 1969 there was a shortage of funds for use in this way). To the extent applied, this scheme amounts to a significant subsidy when the recent annual rates of general price inflation are taken into account. (It is understood that the zero nominal interest rate has been replaced by a positive nominal rate of seven percent per year; this would still mean a negative real rate, of course).

1/ Getulio Vargas Foundation, Precos pagos pelos agricultores, 1969. ANNEX 15 Page 4

Recent events in Brazil lowering the cost to the farmer of fertilizers will have far-reaching repercussions in the quantity used. The exemption of fertilizers from the ICM tax of 17 percent has eliminated that significant cost-raising element. In an effort to bring fertilizer prices closer to the cost of c.i.f. imports, the government hopes to gradually eliminate tariff protection. The government may wish to explore the possibility of subsidizing some of the promotional expenses, i.e., demonstration farms. In the future only the construction of highly efficient fertilizer plants will be approved. The new ammonia plant planned for Aratu, Bahia for 1974 by COPETRAN is a good example as noted below.

Imports now make up moat of the Brazilian fertilizer supply. Around 94 percent of the total supply of nitrogen (N) was imported in 1968, as compared to 91 percent in 1966. The comparable figures for phosphate (P205) are 55 percent in 1968 and 28 percent in 1966. There is no domestic production of potassium. By far the most significant item produced domestically is single superphosphate; 458,000 tons were produced in 1968. In terms of tonnage, this represents about 76 percent of the total output of the domestic fertilizer industry. An ULTRAFERTIL plant for producing nitrogen (N) using as raw material imported naphtha and having a capacity of 116,000 tons of N per year has come on stream this year. This plant is likely to be higher cost than plants which use natural gas as raw material. Recent discoveries of large natural gas reserves in Bahia open the way for new low cost plants-based on natural gas. The new pricing policy to be implemented by the Government, along with the production and distribution of better crop response information, and assuring that finance is available for high-yielding investment in lime and fertilizer plants and distribution facilities will help increase the rate of growth in fertilizer and lime use.

Domestic production is expected to increase. Besides the ULTRAFER- TIL plant mentioned above, which has just come on stream, new capacity under construction or planned includes the following:

1) a plant by PETROQUISA at Camacari, Bahia, with a 200-ton per day capacity for ammonia/urea based on natural gas will be on stream at the end of 1970.

2) COPETRAN, a consortium formed by Paskin, FERTISUL, QUIMBRASIL, and PETROQUISA (a subsidiary of PETROBRAS), will begin construction of a 1,000 ton a day ammonia plant at Aratu, Bahia using as raw material natural gas. This plant, expected to begin production in 1974, will be a source of low cost nitrogenous fertilizers.

3) QUIMBRASIL has just presented a project for a low cost phosphate plant at Jacupiranga with the following capacity (in tons per day): ANNEX 15 Page 5

H2S04 450

H3P04 280 MAP(11-54-0) 400

This plant could come on stream at the end of 1972. 4) QUIMBRASIL also has done a preliminary study for establishing an H3P04 plant at Araxa. This plant will make use of apatite ore deposits and will separate the phosphorous using electricity which is readily available in the area.

There is an urgent need for more fertilizer use in the Northeast. The new low cost nitrogen plants in Bahia should help reduce fertilizer prices in the Northeast. High priority should be assigned to current studies of the feasibility of installing landing, bulk mixing, and distribution centers to promote fertilizer use in the region.

The Northeast, which contains 30 percent of Brazil's cropland, consumed approximately 18,000 tons of nitrogen fertilizer (12 percent of national consumption) and 23,000 tons of phosphate fertilizer (8 percent of national consumption) in 1968. Of this, more than 85 percent was applied on large sugar estates which obtain regular imports through Recife and Salvador. 1/ Small farmers in the region who grow crops such as maize, cotton, and beans use negligible amounts of fertilizers. They pay high service margins, as indicated by the following suggestive data on ammonium sulphate prices in 1968 (in US$ per ton): 2/ "World market" price 31.00 F.o.b. factory Sao Paulo 62.00 Small farmer: Recife 100.00 ) Fortaleza 140.00 ) estimates Sao Luis 185.00 ) The potential demand for fertilizers in the Northeast is difficult to estimate. At lower prices, sugar and non-sugar farmers in the coastal zone, and farmers in the Agreste, interior, and Northwest humid zone would increase purchases very substantially. An important reason for this view is suggested by the following quotation from Volume IV on the Northeast:

1/ Nevertheless, only about 40 percent of the sugarcane land in the Northeast receives fertilizer. 2/ Based partly on information collected by E. T. Powers, SUDENE, Recife. ANNEX 15 Page 6

"There is sufficient experimental evidence from the Mata, Agreste and Sertao to show that crops grown in the Northeast (under both irrigated and non-irrigated schemes) will generally respond to the application of nutrient elements and, in some cases, to lime. ... Yield increases as a result of fertilizer application have varied from about 15 percent to 180 percent where detrimental effects have not resulted from overliming or minor-element toxicity."

Practical means to obtain wide-scale fertilizer use in the North- east should be sought, possibly in line with the present program formulated by SUDENE (with UNIDO assistance). Farm-gate costs of fertilizers can be reduced significantly by abolishing all taxes, permitting duty-free imports, and by the public financing of distribution infrastructure. Public finance might be required to support the costs of a strong promotion campaign. In addition, initially it would be desirable to subsidize fertilizer costs and provide credit, in order to obtainsa sufficiently large demonstration impact in the region. Medium term credit (around five years) may be considered for a lime and fertilizer program. In Brazil, under conditions of rainfed agriculture, a bad crop year may be expected about once in five years. Provisions could then be made for deferment of obligations and perhaps for additional credit for subsistence. This may prove cheaper than massive public investment in the drought years. A special program is required along the lines of the ULTRAFERTIL operation inrthe south, whereby a package of services including soil testing and advice on the rate of application and complementary cultivation practices is offered to farmers.

Farm Machinery

Unlike fertilizers, the use of farm machinery has shown very little increase in recent years. Few countries have a lower density of. tractors than Brazil. It is estimated that there were not more than 100,000 tractors on Brazilian farms in 1968. Most of these were concentrated in the center-south states.

Local manufacture of tractors began in 1960. Output has ranged from about 6,000 units up to about 11,000 per year, with the average not differing greatly from the typical import figure of the 1950's. Imports are now negligible. Domestic prices appear to be about double those of the United Kingdom, although much less unfavorably priced when compared to prices paid by USA farmers. (Brazilian prices may ease downward somewhat in the near future, if manufacturers are permitted to use more foreign components, a proposal now under consideration by the government, and as the ICM tax has been eliminated).

The Ministry of Agriculture in 1968 announced a program (PLANAME) aimed at speeding up the rate of mechanization of agriculture. This has not been fully implemented. Steps need to be taken now to assure that farmers mechanize more rapidly where the economy of powered machinery is clearly demonstrable. There may be a role for price subsidies, particularly until the national tractor and farm implement industry can attain a volume which permits exploitation of scale economies to a reasonable degree. ANNEX 15 Page 7

There may also be economic oDportunities to expand the use of animal power. Although farmers everywhere seem to prefer to move directly from manual to mechanical power, the potential for a greater use of draught animals at least merits investigation, particularly for cultivation and weed control in the Northeast, on the smaller farms of the center south, and on settlement projects. The densely settled parts of northern Rio Grande do Sul are farmed with animal power, and the practical skills which have been developed there in handling drought animals and animal-drawn equipment could perhaps be extended to other relevant areas. Initiation of a series of testing programs in different regions under differing soil and cropping conditions would be of value in determining the technical and economic feasibility of animal power. Engineering and executive groups of the Ministry of Agriculture in selected states working with ABCAR affiliates and receiving technical guidance from the Ministry's central Office of Engineering and the Office of Statistics, Analyses and Economics appear to be the organizations best suited to do these investigations. it is important that trials and recommendations reflect data drawn from actual farm conditions rather than those of experiment stations.

In the frontier areas, the choice between hand and mechanical clearing techniques depends on specific situations. In some areas tractors are used for clearing and initial ploughing to obtain a more rapid and uniform development than can be achieved by hand labor. The chotice depends partly on the wage rate necessary to draw labor from areas in which it is in surplus, such as northern Rio Grande do Sul and the Northeast. This rate will rise in line with better opportunities in these areas. The rate may also be higher if, through intensification, more permanent agricultural systems are established in the present frontier region.

The small amount of farm machinery in the Northeast is used mainly for sugar-growing operations. The benefits of using machinery to plough early for crops such as annual cotton, corn, sorghum, and sesame in the dry zones (to assure timely planting full use of the short rainy season should be investigated. Such use should not aggravate local employment situations since it should help increase planted acreage and yields. In line with the proposed large soil and water conservation program in the Northeast (see Volume IV), tractors and some heavy machinery will be needed. Under such a program the case for more machinery should be advanced in situations where machine use will ultimately lead to more employment, such as mechanical terracing.

Recent moves toward the hiring out of mechanical equipment amongst farmers should be encouraged. Examples of this have occurred in rice and corn harvesting (wheat and soybeans have traditionally been machine harvested). Increased fertilizer and pesticide applications will justify tractor purchases in some areas where tractors had previously been of use only for ploughing, discing, and planting operations. A similar argument applies with regard to the expanded application of phosphate fertilizers on improved pastures.

Table 15-1

Apparent Consumption of Fertilizers, 1950-1968

Nitrogen Phosphate Potash Total Year N P205 K20 1/

------Thousand tons ------

1950 13.6 38.7 22.1 74.4 1951 17.9 59.2 27.4 104.5 1952 10.3 38.5 14.5 63.3 1953 21.0 56.4 30.7 108.2 1954 18.7 67.1 27.9 113.7 1955 23.6 74.2 48.8 146.6 1956 27.1 94.1 41.6 162.9 1957 26.8 115.1 60.2 202.1 1958 45.3 137.8 65.1 248.2 1959 60.8 121.8 57.4 240.1 1960 89.6 126.9 106.2 322.7 1961 55.1 118.8 70.7 244.6 1962 50.3 119.8 68.2 238.2 1963 62.1 153.4 91.8 307.2 1964 50.8 135.1 69.6 255.4 1965 70.6 120.1 99.7 290.4 1966 71.1 116.6 93.3 281.1 1967 103.4 204.6 136.9 447.9 1968 144.3 273.1 184.3 601.7

Source: IBGE, 0 Brasil Em Numeros and Anuario Eatatistico l/ Totals from unrounded data. Table 15-2

Consumption of Fertilizers by Type and Source, 1966-68

Type and Source -l966 1967 1968 '1969

- - - Tons ------Nitrogen

National Production 6,400 7,885 12,962 6,273 Importation 64 734 95 497 135 229 N.A. Total 7103 32 I40 191 N*A. P2 25 Soluble

National Production 614,072 92,283 109,397 139,338 Importation 27 500 73 691 104 880 105 o000 Total 1,,572 I674 214 2474

P2 5 Tricalcium National Production 20,000 16,669 13,086 Importation 5 059 21 983 45 936 Total 3

Total P2 5 National Production 84,089 108,952 122,483 Importation 32 559 95 654 15096u1 Total 204 606 73,9W Potassium

National Production 0 0 0 Importation 93 337 136 937 1244 000 Total 1736937

Source: Sindicato da Industria de Adubos e Colas do Estado de Sao Paulo. Unpublished. 1. Provisional estimate. Table 15-3

Production of Fertilizers, By Type, 1966-68

1966 1967 196L Product M.T. NCr 1000 M.T. NCr l,000 M.T. NCr 1,000

Ammonium Sulphate 12,401 2,432 12,478 2,408 10,395 2,157 Calcium Ammonium Nitrate 19,258 2,809 25,839 3,770 26,523 5,460

Single Superphosphate 316,483 38,231 453,128 54,828 457,777 74,610 Concentrated Super- phosphate (30%P205) 2,642 - - - 49,000 I/

Dicalcium Phosphate 2,642 1/ 3,854 1/ 2,000 1/

Thermophosphate(200P205) - - 2,786 1/ 14,118 1/ Ground Phosphate Rock 66,665 6,714 55,562 5,726 43,620 7,074

I/ Not available

Source: Associacao Nacional para a Difusao de Adubos (ANDA)* and Secretaria da Agricultura do Estado de Sao Paulo. / Table 15-s

Imports of Fertilizers, By Type, 1966 and 1968

1966 1968 Type M.T. US$1,000 Cif M.T. US$1,000 Ciif

Sodium Saltpetrel 28,083 1,600 17,710 992 Potassium Saltpetre 18,706 1,323 9,715 681 Ammonium Sulphon.ttrate 9,762 582 13,308 598 Ammonium Sulphate 238,076 11,288 418,858 Jh,808 Ammonium Nitrate 0 0 0 0 Calcium Ammonium'Nitrate 0 0 234 i8 Calcium Nitrate 398 25 436 26 Urea 105 11 48,765 3,739 Calcium Cyanamide 13,499 1,417 200 20 Sodium Nitrate 0 0 494 41 Normal Superphosphate 6,462 258 14,730 493 Triple Superphosphate 52,338 3,567 101,490 5,353 Phosphate Rock 112,199 2,574 325,998 6,116 Ground Phosphate Rock 0 0 3,810 113 Dicalcium Phosphate 1,440 123 6,021 407 Thomas Slag., 6,153 194 12,189 387 Thermophosphate 2,017 133 100 8 Ammonium Phosphate 185 16 109,258 8,086 Potassium Chloride 144,091 6,541 296,435 9,930 Potassium Nitrate 100 12 0 0 Potassium Sulphate 8,370 490 10,173 544 Magn. Potassium Sulphate 130 8 790 33 Compounds 199 17 1,274 133

Total 642,313 30,179 1,388,605 52,257

Source: Ministry of Finance, Brazil. Table 15-5

Farm Prices of Selected Fertilizers in Rio Grande do Sul, 1960-1968

Year Potassium Ammonium Chilean Triple Thermo- Simple Chloride Sulphate Nitrate Superphosphate phosphate Superphosphate 44% ...... NCr per ton, current prices.

1960 8,39 8,55 11,08 12,10 5,65 6,21 1961 13,20 15,12 14,83 16,28 8,86 7,91 1962 32,78 29,86 36,83 44,17 14,29 17,79 1963 53,04 48,94 58,13 75,91 30,32 30,04 1964 121,36 117,27 125,86 158,09 64,54 72,90 1965 197,50 202,50 194,50 290,00 106,50 125,00 1966 215,00 225,00 201,00 291,70 108,00 129,30 1967 234,00 250,00 241,00 338,00 128,00 164,00 1968 222,30 231,80 314,50 328,70 140,00 190,00 1969(Jul,y 305.00 300.00 374.00 415.00 170.00 240.00 -Aug.)

...... -... NCr- per ton (adjusted to 1969 price level).

1960 .219 224 290 316 148 162 1961 250 286 281 307 168 150 1962 395 360 445 532 172 214 1963 378 349 414 540 215 215 1964 485 469 503 632 257 289 1965 541 555 533 795 292 342 1966 390 408 364 529 196 235 1967 333 356 343 481 182 234 1968 278 290 392 410 175 237 1969(July 305 300 374 415 170 240 -Aug.)

Source: Current prices from Lavoura Arrozeira, bl-monthly journal published by the Instituto Rio Grandense do Arroz. Adjusted prices calculated on basis of index of wholesale prices of farm products (excluding coffee), Index No. 48 from Conjuntura Economica. Index for 1969 based on change In new series, Conjuntura Economica No. 275. Prices for kLamumonium Phosphate and Trilp1eStperphospatej Late 19_69

D I A H x O N I u x S v P K a P H 0 7 P H A T E TRIPLE PERPHOSPHATE I DAP (taxed) IDAP (tax frel DAP S !P P2 0 Content I _ I l W Content ta-xed tax free taxed tax free _(A) * (B) I (A) (C)l (A) (B) _c) a) Nutrient Coatent (kg/a.t.) 640 640 180 460 460 460 460 b) Nutrient percentage of totar nutrients content (%) 100.000 100.000 28.125 71.875 71.875 - - a) Fob price (for nitrogen: US$ 22,00 a 200 x 180) usS 60.50 60.50 19.80 40,70 40.70 40,00 40,00 4) Ocean freight ratee 8.50 8.50 2.39 6.11 6.11 8.50 8.50 e) C1F price - 180 days draft (dollars) 69.00 69.00 22.19 46.81 46.81 48.50 48.50

f) CIF coat in Aew cruzeirce - rate: NS 4,35 p/ dollar nes 300.15 300.15 96,53 203.62 203.62 210.98 210.98 t) Import licenee tax (310% on CIF coat) 0.90 0.90 0.29 0.61 0.61 0.63 0.63 h) Coaission on exchange 0,5% on CI? cost 1.50 1.50 -o.48 1.02 1.02 1.05 1.05 1) Fxchange brokerage and emoluments - 0.1909% on CIS coat 0.57 0.57 0.18 0.39 0.39 0.40 0.40 4) 15% outblj intereet on exchange closing (150 daye term) 22.51 22.51 7.24 15.27 15.27 15.82 15.82 k) Unloading expanses 10.00 10.00 2.81 7.19 7.19 10.00 10.00 1) Cuatoga expenaea 12.00 12.0o 3.37 8.63 8.63 12.00 12.00 a) tax for renewing of fleet - 20% on freight 7.40 7.40 2.08 5.32 5.32 7.40 7.40 a) Pert improvesent tax - 2% on CIF coat 6.00 6.00 1.93 4.07 4.07 4.22 4.22 e) Dutie: Diamoniuo phosphate - 30% On U0S103.25 z 4.35 134.74 - _ 134.74 - - - Triple euperphosphate - 20% on USS 67.25 x 4.35 - _ - _ 58.51 p) Sales tax - 17% an CIF coat plua 1)+ a). n)+ o) 78.25 - - 78.25 - 49.83 - q) 2% monthly intereat on initial expenee: 10% of k)* 1). a)+ n]+ a)+ p) 24.84 3.-4 1.02 23.82 2.52 14.20 3.36 (150 dgta term) r) Deductable 2% On CIF coat plua S)+ h)+ i)+ k)+ 1)t a). n)_ o)+ p) 11.03 6.77 2.15 8.88 4.62 7.10 4.93

fob coat por ton. - Santos 609.89 371.34 118.08 491.81 253.26 392.14 270.79 Freight Santos to S;o Paulo 8.00 8.00 2.25 5.75 5.75 8.00 8.0o Cost por toa. in Sao Paulo (in new cruzeiros) 6I7.89 379.34 120.33 497.56 259.01 400.14 278.79 Cost per ton, in Sic Paulo (in dollar.) / 142.04 87.20 27.66 114.38 59.54 91.99 64.og

.Su Source: Estimates assembled by the mission.

.g Prices at farm are about 25% higher than these quotations. Table 15-7

Production and Imports of Pesticides, 1958-67

Import Domestic Production ki Year Total Cif % of Total Equivalent Value Consumption Value - -Thousand US$- - Thousand US$

1958 13,500 11,588 85.8 1,912 14.2

1959 12,500 10,358 82.9 2,142 17.1 1960 17,200 14,941 86.9 2,259 13.1

1961 14,400 12,159 84.4 2,241 15.6 1962 19,300 17,067 88.4 2,233 11.6

1963 12,887 10,566 82.0 2,321 18.0 1964 13,852 11,566 83.5 2,286 16.5 1965 16,777 13,776 82.1 3,001 17.9

1966 24,009 21,066 87.7 2,943 12.3 1967 18,389 14,473 78.7 3,916 21.3

1/ Estimated

Source: Mr. Otto Lohman, Brazilian Pesticide Imports (1966 and 1967). Table 15-8

NATIONAL OUTPUT OF TRACTORS, AND IMPORTS, SELECTED YEARS THROUGH 1968

Local Year Manufacture Imports

------Units -

1951 . . 10,967

1955, * * 5,758 1960 10,547

1962 6,363 1,836

1963 9,737 1,298

1964 11,501 1,243

1965 8,558 318

1966 9,170 205

1967 6,964 173

1968 9,123 653

Source:. Various. Table 15-9

Retail Prices of Tractors in Brazil and the United Kingdom, late 1969

Brazil U.K. U. K. Domestic Price Brake Horse Massey as Percentage of Power Ferguson Valmet Deutz CDT Average Brazilian Price ------NCr per Unit ------

35 to 40 19,500 - - - 7,750 39.7

41 to 50 - - - - 8,750 - 51 to 60 22,800 19,200 24,300 - 10,000 45.2

61 to 75 - 21,700 - - 11,900 54.9

Source: U. K. prices are from the David Brown price list, November 1969. Brazil prices were assembled from various sources. Table 15-10

Retail Prices of Seed-Fertilizer Combination Drills, 1969

Brazilian Brazilian Manufacture Imported Price as a Type Sem Rival Seamato Massey International J. Deere Percentage Ferguson of Imported -- - - NCr per Unit-

15 Coulter 4,650 - 7,153 8,500 - 59.4

17 Coulter - 7,550 - _ 7,800 96.8

Source: FECOTRIGO, 1969 Estimated Costs of Production ef Wheat. Table 15-11

Retail Prices of Selected Farm Implements, Brazil and the United Kingdom, 1969

U.K. as a Percentage Item Brazil L/ U.K. of Brazil Price - - NCr per Unit - -

4 Furrow mounted disc plough 2,765 2,100 76

Mounted harrow, 32 discs, one plain, one row cut away 2,344 1,880 80

1/ From FECOTRIGO, 1969 Estimated Costs of Production of Wheat. 2/ From F.W. Pettik, Ltd., U.K. Retail Price List, November 1969..

ANNEX 16

THE OUTLOOK FOR AGRICULTURAL EXPORTS

This Annex discusses the more important of the key export items (excluding coffee, treated in Annex 10) and analyzes the overall outlook for Brazilian agricultural exports. The evidence suggests that a slowdown in the rate of growth of .exports can be expected if present trends continue. It points out the need for action to stimulate exports.

COTTON

The Brazilian cotton economy has been booming in many respects. The 1968/69 output of lint cotton is estimated at about 720 thousand tons, or roughly 20 percent higher than the 1967/68 level and about 50 percent above the 1962/63-1966/67 average. Exports totaled nearly 250 thousand tons, valued at US$131 million in calendar 1968 (compared to 189 thousand tons and US$91 million in 1969) and have probably risen by a similar amount in 1969 (Table 16-1). The 1969/70 crop may be in the order of 750-760 thousand tons. This remarkable performance stands in sharp contrast to the rather sluggish trends in Brazilian cotton in the past and to overall, generally depressed trends in the world cotton economy.

Contributing to these favorable developments, on the supply side, were: (a) a continued upward trend in yields, reflecting largely the significant progress achieved in the development, multiplication and distribution of improved seeds in the South in recent years; (b) some shifts in area to cotton from other crops (particularly peanuts); (c) high international prices in 1967/68, resulting mostly from two consecutive unusually-low crops in the U.S., induced by a policy aimed at reducing U.S. stocks; (d) higher minimum prices to farmers; and (e) the apparently improved profitability of cotton, associated with continued improvements in productivity.

On the demand side, marketing of the crop was helped by (a) a substantial reduction in export availabilities in the U.S., and (b) the elimination of the circulation tax (ICM) in the State of Sao Paulo and its reduction by 50 percent in Parana. To these ought to be added the export facili- tating impact of the change to more frequent adjustments of the exchange rate in line with changing prices.

As might be expected, however, the vast crop of 1968/69 had some disruptive effects on the market, particularly in the early part of the season. These manifested themselves in the form of a rush to sell on the part of the trade, perhaps excessive underquoting of world prices, and hesitation on the part of the authorities to remedy the situation by raising the official minimum export prices. While all pertinent facts are not sufficiently clear, it seems reasonable to suggest that, under prevailing world demand/supply conditions, the crop could have been marketed at somewhat higher prices. ANNEX 16 Page 2

The current strength in the Brazilian cotton economy is likely to continue in the 1969/70 season. Import demand is expected to revive in several countries. And availabilities in the U.S., where the crop is forecast at 10-15 percent below that of 1968/69, will continue to be low. Moreover, CACEX has apprently decided not to alter the already-low minimum export prices for the rest of the season. Thus, Brazil should not have serious difficulty in marketing another large crop under conditions very much similar to those of the 1968/69 season. Market conditions may even allow some improvement in prices.

The Long-Term Outlook: It must be noted, first, that of the factors identified above as contributing to the current success of Brazilian cotton, on the supply side, area expansion does not represent a structural permanent change. The current area planted to cotton, which is roughly 40 percent above the historical average, appears to be quite vulnerable to competition from other crops from both the agronomic and economic points of view. The improvements in yields that have been achieved are, of course, of a more permanent nature, but unless a geographic shift in area or a change in technique such as through irrigation occurs, the upward trend in yields is likely to taper off progressively. (Research agronomists in Brazil, though optimistic, are reluctant to venture specific judgments on the further yield-improvement potential in the South.)

Turning to demand, the outlook for domestic consumption of cotton in Brazil is marred by the intense and growing competition from domestically- produced man-made-fibers. Although the internal market for cotton is nevertheless likely to show some expansion in the future, the bulk of any increment in output will have to be absorbed by the export market. World import demand for cotton is expected to rise only marginally (by about one percent per annum) in the next 5-6 years. Some of the fortuitous developments (from Brazil's point of view) of the 1968/69 and apparently 1969/70 seasons, such as depressed crops and export availabilities in the U.S., are likely to prove to be temporary. The U.S., appears determined and is quite likely to raise its output and exports closer to their traditional levels over the next few years. Thus, continued downward pressures on prices may be anticipated for the long run. It appears that Brazilian cotton costs are quite competitive internationally and will continue to be so in the future. What is not so clear, however, is how future world cotton prices might affect the relative profitability of growing cotton versus competing crops.

The specific projections for cotton which are shown in Table 16-1 are based on the following assumptions and arguments:

1. Supply - the unusually large area under cotton in 1968/69 of 2.6 million hectares compares with an average of 2.2 million hectares in the 1961/62-1967/68 period. Analysis of past trends and of the elements of the current boom suggest that under normal "relative price" relationships, the normal cotton area may lie somewhere between these two figures, probably closer to the lower figure, e.g., at 2.3 million, which is adopted here. Unfavorable factors are the projected declining trend in prices and the possibility that ANNEX 16 Page 3

coffee might move to some extent back to Sao Paulo in the next few years. Average cotton yields have improved by about 30 percent over the last 9-10 years, largely through the use of improved seeds. Although there is, no doubt, further potential for raising productivity through a variety of measures, since large areas, particularly in the South, seem to be already saturated with improved seeds (the key factor so far), we have assumed a further increase of only 20 percent (over the average of the last three years) by 1980. These assumptions lead to production levels of about 650 thousand tons in 1975 and 700 thousand tons in 1980, compared to an average of 550 thousand tons over the last five years but 720 thousand tons in 1968/69.

2. Domestic Consumption - Domestic consumption of raw cotton in Brazil has stagnated in the last few years, bringing about a decline in per capita consumption from over 4 kilograms in 1963/64 to about 3.2 kilograms in 1967/68. We have assumed that per capita consumption will continue to fall in the next 10 years, but at a slower rate than in the past, due to overall improvements in the economy: it may' stand at 2.9 kilograms in 1975 and 2.7 kilograms in 1980. The deceleration in the rate of decline in consumption per capita, given the rapid rate of population growth, would lead to an absolute increase in aggregate consumption from 288 thousand tons in 1968/69 to 360 thousand tons in 1980. To this must be added estimates of raw cotton processed for export as textiles. Though Brazil's experience in exporting cotton textiles is rather brief and mixed, it is relevant to note that her share of the world market is very small and that the future period under consideration is sufficiently long to allow more progress in market penetration. We have therefore projected, rather arbitrarily, exports of cotton textiles to grow from 3 thousand tons in 1968 (but 9.2 thousand tons in 1966) to 25 thousand tons in 1980.

3. Exports - It may be concluded that neither Brazil's historical share of the world market (5.5 percent), nor her share in 1968/69 (9.6 percent) are indicative of the country's plausible share for the future. The latter would be probably somewhere in the middle, i.e., at 7.5 percent. The export availabilities resulting from the foregoing supply and domestic demand projections (namely, 315 thousand tons in 1975 and 340 thousand tons in 1980) are more or less consistent with the export demand potential arrived at on the basis of the projected share and could be marketed without too much difficulty. Unit values are likely to fall by about 20 percent in accordance with anticipated trends for world prices. Total earnings from raw cotton exports would rise from $131 million in 1968 to $140 million in 1975 and $145 million in 1980. In addition exports of cotton textiles would provide $20 million in the mid-seventies and $32.5 million at the end of the decade. ANNEX 16 Page 4

Conclusions and Recommendations: The above long-term projections are, of course, subject to normal margins of error. Moreover, they can be invalidated by unforeseen favorable or unfavorable, domestic or external developments. Brazil should pursue a flexible cotton policy designed to adjust best to such unforeseen developments, as it has done successfully in the last two years. But there is no question that projected trends in world consumption and exports and apparent U.S. objectives constitute serious obstacles to altering substantially the long-term trends for Brazil indicated above.

There seems to be some scope for Brazil to raise the average unit value of its exports, without influencing the trend in world prices in c.i.f. terms. This can be done through further shifts in the composition of output and exports to higher-priced varieties (longer staples) and grades, and through efforts to eliminate or reduce the price discounts applied by im- porters to'Brazilian cotton (compared to, say, U.S. cotton) for a variety of reasons, such as the excessive humidity of Southern cotton, inability to guarantee "Micronaire and Pressley readings" (standard measures of fiber fineness and strength) 1/, or the presence of foreign matter due to inefficient baling and handling.

Any intention to raise output above the levels,assumed here as a working hypothesis should be accompanied by efforts to influence the trend in demand. Although the avenues open to Brazil to do so direcly are limited, there is still some scope for action. Such action might include, for example, joining the International Institute for Cotton (an international cotton research and promotion organization established in 1966) 2/, creating a central fund for-domestic research and prmotion by levying a given tax per bale of cotton produced (similar to the current program in the U.S.), selective export incentives for cotton textiles for carefully identified product categories; and a closer study and awareness of the domestic man- made fiber industry - its prospects, capacity expansion, and implications. The-suggested actions may of course, have merit even in the absence of significant expansion plans.

There seems to be a greater need for coordination of cotton policy among, for example, growing, processing, and trading interests, research organizations, state governments and the Central Government. Efforts to introduce machinery for such coordination have been-limited, or shortlived, or ineffective in the past.

1/ The current discount due to these two factors is;about 1.4 cents per pound. At normal export levels, this implies aJloss in potential export revenue of $4-$5 million.

2/ There are unconfirmed indications that Brazil may have joined the Institute recently, since the Mission left the country. ANNEX 16 Page 5

Finally, turning briefly to the problems of the Northeast, it may be noted that in cotton many of these reflect the intrinsic weaknesses of the economy of this region. Only a few remarks on those arising from the particular characteristics of the cotton sector are offered below:

(a) In speaking about Brazilian cotton, the Northeast is generally identified as "the home of superior, perennial cotton." Superior, perennial cotton, however, appears to account for no more than one-third of the cotton output of the region; the rest of the crop is not equally or uniformly superior. In fact, some long-staples sell at a discount below shorter staples from the South. Moreover, Northeastern cotton is very heterogeneous typewise and gradewise, i.e., its type composition charts are not sufficiently and appro- priately skewed in the desirable grades.

(b) The most immediate problem seems to be improving the classification and grading system, and its implementation, with a view to assuring the growers a fair return and improving the marketability of the cotton, both internally and abroad, under more orderly conditions.

(c) There is, of course, considerable scope for technical assistance from the South to the North both in growing and marketing the crop. For example, possibilities of shifting from low yielding perernial cotton to higher yielding annual cotton depends on adaptation of varieties and techniques developed in the South to conditions in the Northeast.

OTHER FIBERS

Brazil produces and exports, in addition to cotton, several vegetable fibers such as (in order of their contribution to exports) sisal, wool, jute, ramie, and silk. Exports of such fibers totaled about $40, million in 1968, compared to $66 million in 1964. Roughly three-fourths of the decline over this period occurred in sisal, exports of which were more than halved in four years. In 1968, Brazil exported, in addition, $8.8 million worth of jute and sisal manufactures, compared to $3.6 million four years ago.

The global long-term outlook for none of these commodities is too promising, due principally to competltion from man-made fibers. Brazilian exports of all these fibers together are likely to rise from about $40 million in 1968 to about $50 million in 1980, and exports of jute and sisal nanufactures combined may rise from $8.8 million to $15 million over the same period. Detailed supply, consumption and export projections for the major three fibers - sisal, wool, and jute - are given in Tables 16-2, 16-3 and 16-4. ANNEX 16 Page 6

In the case of sisal, in which Brazil accounts for roughly 25 percent of world exports, the major obstacle to growih is import demand. Moreover, Brazil's share is more or less frozen under an informal, but so far well-respected export quota arrangement among producing countries. Current and projected output are far below the historical average or the production potential. In the case of wool and jute, while the world demand outlook is not bright either (though it appears to be better than for sisal), Brazil's share of the world market being negligible, the obstacle to more rapid growth would appear to be supply.

Among the crops considered in this section, that of most urgent concern to Brazil is no doubt sisal, because of the concentration of production in the No'rtheast - indeed, in some of the poorest areas of this region. Brazil does seem to have a comparative advantage in this crop viz- a-viz other exporting countries, but this is associated with the apparent paucity of production alternatives (low opportunity costs) in sisal growing areas. Engaging in aggressive price competition would tend to depress the real price received by farmers without promising offsetting permanent increases in output (and sales), since prices would soon fall below direct costs.

Brazil (and other sisal producing countries) should therefore concentrate on (a) efforts to improve the long-trend in demand, and (b) in the medium-term, adjusting best to market conditions. Whether the long-term trend in demand can be improved or not (by developing new end-uses, for example) is largely a -technical question which cannot be dealt with here. As to adjusting to the projected trends, the first thing that comes to mind is for Brazil (and other countries) to raise the proportion of sisal exported as manufactures. This will not be easy, however; raw fiber importing countries are already objecting to any move in this direction and may resist such developments. The above remarks suggest that the search for more remunerative production alternatives ought to be delayed. The required efforts to develop such alternatives as well as new uses for sisal are clearly beyond the means of the Northeastern states where sisal is grown.

FATS AND OILS

Brazil's production of fats and oils includes a wide variety of animal, vegetable, edible and inedible types. There are about 30 types of oil produced, but many of them are of minor importance. Among the edible vegetable oils, cottonseed, groundnut and coconut oils accounted for 75 percent of total vegetable oil production in 1965-67 (Table 16-5). Soybean oil is gaining rapidly in importance and should become the most important oil in terms of production, consumption and trade. Among the industrial (inedible) vegetable oils castor oil accounts for about 50 percent of total production in 1965-67. Of the animal fats, edible tallow, mainly edible lard, represented around 80 percent of total animal fat production and inedible lard ANNEX 16 Page 7 about 7 percent. Butter production is of minor importance, accounting for only slightly more than 5 percent of 1965-67 production. Production of marine oils is negligible in Brazil.

Compared with world fats and oils production, Brazil is a comparatively small producer. In 1965-67, the country's total production of all fats and oils accounted for only 2.7 percent of total world fats and oils production (including marine oils). In the same period, Brazil's vegetable oil production (including coffee oil and cocoa butter) represented 3.4 percent of world vegetable oil production, and animal fats 2.9 percent of world animal'fat production.

Brazil's world market standing as an exporter 'of fats and oils is of even less significance than production. In 1965-67, Brazil's total exports amounted to 155,000 tons and accounted for 1.5 percent of world exports. Castor oil (103,300 tons) and soybean oil (31,400 tons) were the major exports. Edible types are mostly consumed domestically while a large share of the inedible types (mainly castor oil) are exported (Table 16-5). Imports, on the other hand, are also insignificant consisting mainly of about 10,000 tons of olive oil. Thus the country is self-sufficient in fats and oils production.

While total production of fats and oils increased by 164,300 tons from 1960-62 to 1965-67, this increase was mainly required to take account of population increases and to maintain per capita consumption. Exports, particularly of edible oils, increased comparatively little. The total increase in edible fats and oils production amounted to 154,100 tons of which 136,100 tons (88.3 percent) were required to take account of increasing consumption due to population increases. Industrial oil production increased from 1960-62 to 1965-67 by 62,800 tons of which 28,400 tons (45.2 percent) were required to satisfy increasing domestic demands. The entire increase in industrial oil exports was attributable to castor oil exports. Future export prospects of industrial oils will also continue to depend on castor oil but spectacular increases are not expected in this sector.

Brazil hopes to expand edible vegetable oil exports (primarily in the form of seeds). This may present difficulties since the rapidly growing population exerts heavy demands on production expansion. In the 1960's per capita consumption increased only from 12.1 kilograms to 12.3 kilograms. The future production, consumption and trade situation for edible oils is indicated in Tables 16-5, 16-6 and 16-7. Taking account of population increases, the projections indicate that per capita consumption in 1975 would not increase above levels achieved in previous years.

There is also a possibility of enlarging the oil supply by processing rice bran. Brazi.l produces presently about 450,000 tons of rice bran with a total oil content of 40,000 tons. The processing of rice bran for oil could increase the oil supply in many developing countries. So far, however, the process has not been undertaken on a large scale since bran has to be processed immediately after milling. It can be most economically carried out in connection with large rice mills or where mills are concentrated sufficiently to permit rapid movement of bran to processing plants. Some smaller scale plants have beer Uaveloped and several plants are now in operation in Brazil. ANNEX 16 Page 8

As far as the export market is concerned, only soybeans and castor oil are likely to play a significant part in export expansion. Castor oil is exported as oil, since seed exportation is prohibited to support the local crushing industry. Furthermore, the seed is of little value on the export market. Its domestic use is as fertilizer. Soybeans, on the other hand, are exported mainly as beans.

Brazilian soybean production increased from 206,000 tons (37,080 oilequlvalent) in'19 60 to 751,000 tons (135,180 oilequivalent) in 1968 or by 17.5 percent yearly. The past output growth has been accomplished mainly through an expansion in area from 74,000 hectares in 1955 to 735,000 hectares in 1968. Expansion took place mainly on wheat land where a wheat-soybean rotation contributes to higher wheat yields. The expansion took place in response to a growing domestic demand for oil which expanded during the same period by 3.4 percent yearly. The surplus of production over domestic demand was exported as beans, while about 40 percent of the meal resulting from crushing was also exported. Compared with the world market, both bean and meal exports were comparatively small, accounting respectively for 2.3 percent and 4.5 percent of total world exports in these two products in 1965-67. The United States is by far the largest exporter of soybeans and soybean meal. 1/ In 1965-67, U.S. exports of these two products accounted for 89.6 percent and 72.3 percent respectively of world exports.

Our consumption and trade projections (Table 16-5) assume an increase in Brazil's soybean output from 58,300 tons oilequivalent in 1965-67 to 288,000 tons oilequivalent in 1975. This corresponds to a bean equivalent of 326,500 tons and 1,612,800 tons respectively. The projection assumes an increase in yields from a 1965-67 average of 1,211 kilograms per hectare to 1,350 kilograms per hectare and an expansion in the soybean area to about 1.3 million hectares by 1975, compared with 735,000 in 1968. Ap- proximately 200,000 hectares could feasibly be expanded on wheat land which presently exceeds the soybean area by roughly this amount. But the remaining 365,000 hectares would have to be grown in conjunction with other crops or on newly cultivated land.

Soybean exports are projected to increase to 463,800 tons (77,300 tons oilequivalent) from 175,840 tons of bean exports in 1965-67. This expansion implies that Brail's share on the world soybean market will,increase from 1.7 percent in 1967-67 to about 3.4 percent in 1975. It can only be achieved if the country makes great efforts to remain price competitive. This competitiveness is impaired by an inefficien,t marketing system including high transportation costs. These costs are nearly four times as large as U.S. costs, as the following table shows:

1/ The United States is also the major exporter of soybean oil in the world. In 1965-67, U.S. soybean oil exports were over 95 percent of world net exports. ANNEX 16 Page 9

Average Farm Prices and Marketing Costs in Brazil and the United States (dollars per ton)

Brazil United States

Farm price 73.00 93.00 Marketing costs to port 8.04 2.20 Port loading 7.70 1.00 Sea Transport 11.50 4.45

C.i.f. Europe 100.24 a/ 100.65

a/ In addition, there is a bagging cost of about US$1.80 per ton, which does not apply to the United States which ships in bulk.

In 1969 c.i.f. Rotterdam soybean prices 1/ were relatively favorable, varying between US$100 and US$109 per ton. But they have been declining and are expected to decline further to about US$90-95 by 1975. Two ways are open to Brazil to adjust to this price: reduce marketing cost or reduce the price paid to farmers. While there should be considerable scope to improve marketing costs, it is highly undesirable to decrease the farm price. This could very easily impair the ambitious production expansion which has been outlined previously. For our price projection, it was assumed that half the anticipated c.i.f. price decline of about $10 per ton will be offset by reductions in marketing, handling and transport cost. The same applies for meal exports. But since meal c.i.f. prices are not expected to decline any reduction in marketing and transportation costs represent an increase in prices to the producer.

Brazil produced about 40 percent of world castorseed output and accounted for approximately 80 percent of world trade in castor oil in 1965-67. Production expanded by 6.4 percent yearly from 1960 to 1968 while oil exports fluctuated violently between 42,000 tons and 145,000 tons during the same period. About one-third to one-half of Brazil's exports go to the United States.

While world production increased, the level of world oil exports in 1960-67 remained between 180-200 thousand metric tons, since production expanded more rapidly in the importing countries, particularly in the Jnited States. During this period Brazil export unit values fluctuated around US$230 per ton while exports varied between 80,000 and 120,000 tons. In 1968, however, exports increased and so did prices. Two aspects account for these developments. Firstly, the United States decided to increase its

1/ U.S. 44 percent protein. ANNEX 16 Page 10 defense stockpile from 22 to 50 million pounds. This increased U.S. import demand since domestic production expansion was insufficient to meet this goal. Secondly, Indian castor oil exports, which account for about 15 percent of world exports, are now practically exclusively disposed of in the centrally planned countries under bilateral trade agreements and do not compete with other suppliers in the free world market.

World exports increased therefore to 237,000 tons in 1968 from 179,000 tons in 1967, wlhile prices increased from US$235 to $313 per ton. Brazil took advantage of this situation by encouraging production and exports-through an increase in the farm support price of 88 percent. How- ever, in the long 'run, it is unlikely that world exports will exceed 240,000 to 250,000 tons without serious price decreases. At this level, it is assumed that-Brazil would export about 190,000 tons at an f.o.b. price of about US$230 per ton. The same projection applies for 1980.

In addition to the oil and seeds exported, Brazil also exports oilseed meals as residue from domestic oilcrushing. The percentage of meal exported from total supplies varies. In 1965-67, it was 5 percent of cotton!seed meal, 19 percent for linseed, 40 percent for soybean meal and 45 percent for groundnut meal. Our projections assume that the same percentage of domestic supplles will be exported by 1975 with the exception of soybean meal. Since it is expected that future livestock expansion will occur and intensify, it may be expected that the world demand for better feeds, to which oilseed meals will contribute an important ingredient, will increase. Soybean meal exports are, therefore, assumed to constitute 50 percent of domestic supplies compared with 40 percent previously. This amount, however, is still three times as large as 1965-67 soybean meal exports, as Table 16-5 indicates. There are a number of other oilseed meals, but their exports have not increased in the past, and they are not expected to expand in future. Unlike vegetable oils, soybean meal faces a strong demand on world markets, and the future supply and demand situation will be such that prices will remain at about $90-95 per metric ton.

LIVESTOCK

Compared with world meat production, Brazil is a relatively small producer. In 1965-67 total world meat output amounted to about 79 million tons. Brazil's share of this total was 2.8 percent (Table 16-8). In terms of world trade, Brazil's share is even smaller. In 1965-67 world net r.meat exports amounted to about 3.3 million tons, to which Brazil contributed 1.4 percent.

From 1960-62 to 1965-67 Brazil's total meat production expanded by 2.6 percent yearly. Since during the same period population increased by 3.1 percent and net exports also increased slightly (Table 16-9), per capita consumption declined from 27.4 kilograms to 26.6 kilograms. Compared with' per capita consumption in other countries, Brazil's consumption is still greater than in most Asian and African countries, but one of the lowest in South America, not to mention consumption in developed countries. A further decline in Brazil's per capita consurption is clearly undesirable, particularly if one considers that the increasing urbanization demands higher nutritional standards. ANNEX 16 Page 11

Of the various types of meat consumed, beef and veal are the most important, followed by pork at about half (7.6 kilograms) the per capita consumption of beef and veal (Table 16-9). However, per capita beef and veal consumptior. declined by 1.3 kilograms from 1960-62 to 1965-67 and thus was the major factor in the decline of total per capita meat consumption. Pork, mutton and lamb, and poultry per capita consumption increased slightly, the increase varying from 0.1 to 0.2 kilograms. Obviously, this was not enough to compensate for the decline in beef and veal consumption. This situation indicates that meat production should be accelerated, if for no other reason than to prevent further declines in per capita meat consumption. A production expansion at past growth rates would not be sufficient to maintain per capita consumption at 1965-67 levels, even if meat going for export would be diverted into domestic channels. This situation is indicated in Table 16-9 (Assumption I). It is, therefore, important that those livestock enterprises, which are suitable for relatively quick expansion of meat supplies, e.g., pork and poultry, should be encouraged.

In Table 16-9 we also present a projection which indicates a situation which, we think, forecasts a desirable and realistic aim of consumption developments (Assumption II). This projection mainly assumes that per capita beef consumption declines further, a trend that was already experienced in the early 1960's, but that the decrease in beef consumption is compensated by an increase in poultry, pork and fish consumption. Total per capita meat consumption would then remain at the 1965-67 level.

A third assumption (III) was made, applylng income elasticities which the Vargas Foundation calculated for the various types of meat. Under this assumption, the yearly growth rate for beef and veal output would have to be increased considerably to produce sufficient meat to satisfy domestic demand while the growth rate for pig and poultry production would decline compared with past growth rates. It is unlikely that this situation will arise in view of past performances of these livestock sectors.

The above projections assume no increase in exports above the 1965-67 period. Beef and veal exports are the only livestock products of significance. Offals exports also originate mainly in this sector. The question arises whether increases in beef and veal production beyond those projected would go for export or be consumed domestically. In view of the fact th*t 1975 projections indicate a decline in per capita beef and veal consumption of 1.8 kilograns, it seems reasonable to assume that a greater output would first go for domestic consumption to regain the 1965-67 level of 17.3 kilograms. To achieve this an additional 198,360 tons are required. This would raise the yearly growth rate of beef and veal production to 3.1 percent'(compared with 1.8 percent in 1960-62 and 1965-67). Only after this production expansion is achleved would it be reasonable to assume that additional significant export supplies would become available.

Beef and veal exports, including canned meat and offals, increased by 2,600 tons yearly from 1960-62 to 1965-67 (Table 16-10). This expansion, although small, contributed to the reduction it domestlc supplies and consequently per capita consumption. As has been explained previously, ANNEX 16 Page 12 there will be strong domestic demand pressure on beef and veal and it is unlikely that beef and veal exports can be expanded significantly without a considerable improvement in supply growth. It is useful, however, to look at Brazil's trade prospects, assuming exports could be increased.

The main features of the world beef trade since the beginning of the -1950's included:

(a) a large expansion in volume (6 percent yearly);

(b) an upward trend in prices; and

In-the future a slowing down in the growth of total world beef import de-mand to about 4.0 percent yearly is anticipated, but a growing demand will assume a domestic market in many emerging developing countries.

Two other developments in future meat trade deserve special mention. One is the trend toward lean boneless meat imports-by developed countries encouraged by recent outbreaks of foot-and-mouth disease in the United Kingdom which were partly blamed on bone-in-meat. This-development is likely to require fi?provements in processing facilities in exporting developing countries. The other feature, and of great importance to Brazil, is-'the continued emphasis of developed countries on manufactured beef imports, i.e., canned meat, frozen meat and recently cooked frozen meat parts. This is mostly lean meat from grassfed animals which are usually older at slaughter than the intensively fed animals in developed countries. The developed countries will continue to expand their production of this young type of beef meat with a comparatiVely high fat content. Because of their production conditions and farm structure, they- are:, however, not- in a position to produce sufficient amounts of lean beef. The import market for this -meat is likely, therefore, to'grow faster than-- the demand for meat from younger animals. It happens that the South American-countries-and Australia and New Zealand'have favotable conditions to produce this type of meat. So far, however, it was mainly New Zealand and Australia which reaped most of the rewards of the expanding trade.

Brazil's major customers for beef and veal are the EEC and the United States. The latter buys canned meat while Common Market imports consist mainly of frozen beef and veal. Italy is the major market. The United Kingdom has never been a major buyer of Brazil's meat and is unlikely to become so in the future, but Spain and Portugal are becoming increasingly important.

If Brazil would be in a position to increase export trade, she should have no difficulties in finding a market. There are, of course, other suppliers of manufactured beef from South America and Eastern European countries, but the supply situation is likely to be tight and- world market prices for manufactured beef are expected to rise by about one percent yearly from their 1965-67 level, as indicated in Table 10. ANNEX 16 Page 13

However, as indicated in Annex 17 on livestock, Brazil has considerable potential for increasing beef production. Considering the vast areas of existing and potential pasture land, the large cattle population and the present low level of productivity, a relatively small percent improvement in productive efficiency could produce significant amounts for export. The livestock development program being financed by the IBRD and the Inter- American Development Bank has gotten off to a slow start. However, recent increases in cattle prices and the elimination of Government interference in the cattle market should lead to increased investments.

Although international trade in pork products is limited, there may be an opportunity for Brazil to develop remunerative outlets abroad for high-quality pork and specialty items in significant volume. World pork shortages open up markets from time to time, as in 1969, and even in an abundantly supplied market Brazil should be able to compete with the pork producing countries if production efficiency and product quality are improved. Feedgrains and protein meals are now exported at world prices and the prices in the producing areas are substantially lower. If pig meat quality improves and prices are reduced in relation to beef prices, pig consumption is likely to go up and more beef will be available for exports.

TEA

In colonial times, tea was grown in Brazil, mainly in the State of Minas Gerias, but production declined and before the first world war all tea consumed was imported. Japanese immigrants took up cultivation in the State of Sao Paulo in 1920 and since 1940 a small quantity of tea has been exported. Total production in 1965-67 was 2,900 tons, 0.2 percent of total world tea production. 1/ Output expanded from the 1960-62 level of 1,600 tons to an estimated 3,400 tons in 1968, and it is expected to grow moderately in the next few years. The new plantings undertaken by COTIA are expected to add at full maturity 740 tons of tea, bringing total estimated production for 1975 to 4,000 tons (Table 11).

Tea consumption in Brazil is very low and in 1965-67 only an estimated quantity of 400 tons of tea were consumed in the country. At the present time, the tea industry is doing little to promote domestic consumption. Local taxes on tea are high, amounting to 25 percent of the wholesale price. Exports of tea have been increasing at the same pace as production. In 1960-62, 1,122 tons of tea were exported, valued at 0.8 million dollars

1/ Official production figures released by the Brazilian government show an output of 5,800 tons in 1965-67. The State of Sao Paulo (where an estimated 99 percent of the crop is grown) reports a production of 2,900 tons for the same 1965-67 period. The latter estimate is considered to be more reliable by informed trade sources in Sao Paulo as representing the total Brazilian tea production. ANNEX 16 Page 14

as compared to 2,540 tons, valued at 2.0 million dollars in 1965-67. Exports expanded further in 1968 to 3,034 tons and are expected to reach 3,400 tons in 1975 (Table 16-11). But the export unit value of Brazilian tea is expected to fall from the 1965-67 level of US$778.3 per metric ton to US$680 per metric ton in 1975. MATE Kate is a popular Brazilian drink especially in the southern part. The crop is harvested from wild trees in Rio Grande do Sul, Parana, Santa Caterina and Mato Grosso states. Production expanded rapidly in the mid-1950's from about 60,000 tons to a peak of about 136,000 tons in 1962. Since then, it has been slowly declining and in 1967 only 106,500 tons were produced, probably in response to difficulties in the export sector, and it is expected to remain at around this level. A large percentage of mate-produced is exported in either process- *ed or semi-processed form to other South American countries, namely Argen- tina, Uruguay and Chile and small quantities are shipped to the Federal Republic of Germany and the United Kingdom. Exports have been declining from about 54,900 tons, valued at US$8.6 million in 1960-62 to about 25,000 tons, valued atUS$4.9 million in 1968. The main reason for this drop in exports is the disappearance of the Argentine market. Exports to Uruguay and Chile, the other major markets, have also declined in recent years. The unit value of exports has increased from about US$175 per ton in 1960-62 to about US$204 per ton in 1965-67 for -processed mate and from about US$145 per ton in 1960-62 to about US$156 per ton in 1965-67 for semi-processed mate. Volume of exports should stabilize at around 25,000 tons of mainly processed mate in 1975-80, assuming that Argentina will not resume her imports of semi-processed mate. Efforts to develop export markets for the product in Europe and the United States have failed in the past, and the'possibility of-finding markets outside of Uruguay and Chile seem at this moment rather remote. Future exports are expected to remain at the 1968 level of about 25,000 tons, while unit export values are expected to decline to their 1960-62 level of US$175 per ton for processed mate and US$156 per ton for semi-processed-mate. SUGAR Brazil ranks second, after India, in world sugarcane output but fifth in world production of centrifugal sugar. The greater part of the country's production - 75 percent in 1968/69 - is consumed domestically. In 1968, domestic consumption amounted to 3.4 million tons. Per capita consumption, which was 37.3 kilograms in that year, has been increasing at the rate of 1.6 percent yearly. At this rate, it is estimated to increase to 41.7 kilograms in 1975 and 45.1 kilograms in 1980. Allowing for population growth, the domestic market is expected to absorb 4,595,000 tons in 1975 and 5,764,000 in 1980. Brazil's sugar industry is flexible because, up to 50 percent of total cane output is used for alcohol production. But prices paid for cane used for alcohol are lower than those paid-for cane used for sugar produc- ANNEX 16 Page 15

tion. By reducing alcohol production, Brazil can rather quickly provide additional sugar for export. However, the export market is determined by the country's preferential export quota on the U.S. market and her quota under the newly concluded International Sugar Agreement. For 1975, it is estimated that these agreements would allow Brazil to export 510,000 tons to the U.S. market and 500,000 tons to other markets under the Inter- national Sugar Agreement. The projected respective prices would be US$165 per ton 1/ and US$88 per ton. 2/ In order to meet export and domestic requirements in 1975, Brazil would thus have to produce about 5.6 million tons.

CORN/MAIZE

Brazil is the world's second largest corn producer, with an estimated production of 12.5 million tons in 1968. Exports amounted to an all- time high of 1.3 tiillion tons in the same year. This represents about 5 percent of world corn trade in 1968.

Corn output increased by 5.8 percent yearly from 1960-62 to 1965- 67 (Table 16-12). Domestic consumption increased by 4.9 percent in the same period and amounted to 11.6 million tons in 1965-67. About 47 percent of Brazil's corn is fed to hogs, 10 percent goes to the mixed-feed industry and 17 percent goes for human consumption. Assuming that the past expansion rate is to be maintained, domestic requirements should reach 17.8 million toRs in 1975 and 22.6 million tons in 1980. Exports also increased from almost nothing to 1.3 million tons in 1968. They are expected to increase further, but the expansion is likely to be limited by insufficient port facilities and the entire mechanism involved in expediting shipments. It is estimated that port capacities are sufficient to handle an export volume of no more than 1.5 million tons in 1975 and 2.0 million tons in 1980 which would be sold at an export unit value of US$46 per ton. The 1980 production forecast, to meet growing domestic consumption and exports, implies a doubling of the 1965-67 level of output.

Similar to soybeans, Brazil's sea transportation costs are higher than those of her competitors. Sea transportation costs to Europe amount to about US$8-9 per ton which is about double the cost of shipping that U.S. exporters pay. One major reason for these high costs is that Brazilian corn has to be shipped in small vessels of about 20,000-25,000 tons. Often it is not even possible to load these ships fully since harbor facilities are insufficient to handle cargoes of over 23,000 tons. Thus, the expansion in corn exports is closely knit to the enlargement and improvement in efficiency of port facilities.

RICE

World production of rice, excluding the centrally planned countries, rose steadily since the end of World War II at an average annual rate of 3.5 percent. World rice consumption has shown similar tendencies. Prices in the early fifties were comparatively high reflecting the effect

1/ About 7.5 cents per pound. 2/ About 4.0 cents per pound. ANNEX 16 Page 16 of the Korean war and two crop failures in India. For 12 years thereafter, prices fluctuated in a comparatively low and narrow range. During this period, production in South and East Asia, which constituted 87 percent of the total output, grew at an annual rate of 3.3 percent. In Latin America, the next most important region among developing rice producers, production increased faster, at an annual rate of 5.5 percent. During 1965 and 1966 world rice production declined on balance, due entirely to reductions in output in Asia. However, production in Brazil and other Latin American countries continued to expand.

A variety of factors led to sharp increases in export prices after 1965. Vietnam turned from an exporter to a large importer of rice; in Burma, output, and procurement for export, failed to increase. Prices reached peak levels in 1967, averaging $206 per ton for Thai rice 5 percent broken, f.o.b. Bangkok. Since then, however, prices have come down substantially to $151 per ton in January-March 1970. If the world supply and demand trends continue unimpeded, and if an easing of hostilities in Southeast Asia occurs, rice price should decline further to about $140 per ton f.o.b. Bangkok for Thai rice 5 percent broken. 'The corresponding level of competitive e*port price for average Brazilian rice, allowing for dif- ferentials in quality:and related factors, would be about $100 a ton.

World trade in rice is comparatively small, only 6.2 percent of the world output in 1966-68. Moreover, one-half of this trade moves under government-to-government contracts. Countries which do not have bilateral contracts have sometimes experienced difficulties in exporting rice at prevailing prices. It is, therefore, important that, apart from increasing its production and quality of rice milling, Brazil develop specific channels, perhaps including bilateral trading arrangements for the marketing of its rice. The quantities for which remunerative markets can be found depend on the rate at which merchandising arrangements can be made. Under favorable assumptions, it can be estimated that exports in 1975-80 can be expanded up to 250,000 to 300,000 tons valued at $25 to $30 million a year. This would correspond to the peak rate of exports attained by Brazil in 1965 and 1966 (Table 16-23).

BANANAS

Brazil, with an annual output of over 6 million tons, equalling total world trade, is the largest producer of bananas in the world. How- ever, most of the fruit is consumed locally and only 2 .to 3 percent of the output is exported. Although boxing has been introduced recently, a large part of the fruit is still exported in bunches.

Market outlets for Brazil are highly limited with exports confined to the neighboring countries of Argentina (under a bilateral contract) and Uruguay (Table 16-13). The quality of the fruit is substandard and handling, packing and loading are poor with the result that the fruit gets bruised and spoiled in the process. This partly explains why the export value of bananas from Brazil at about US$30 per ton averages one half of the average export value of the fruit (excluding the cost of boxes) from elsewhere in the world. ANNEX 16 Page 17

The world market is dominated by Central America and Ecuador, which together control two thirds of the world trade in bananas. The banana industry in these countries is highly organized, particularly in the case of Central America, and Brazil would have to go a long way before it could come close to their efficiency in production and marketing. Brazil, therefore, cannot be expected to share in the rather rapid growth being experienced by the world banana trade. Rather, the hitherto secure markets in the southern cone of Latin America have become vulnerable to competition from other sources of supply since the start of the revolutionary development of marketing bananas in boxes whereby the fruit can be transported and marketed more conveniently and with a minimal loss.

Per capita consumption of bananas in Argentina, the main market for Brazil, has steadily declined from about 10 kilos in 1959-61 to under 8 kilos in 1967-69. Simultaneously, Argentine imports have declined by 30 percent, with part of the domestic requirements now being met from indigenous production. It is important for Brazil to make a thorough study of the causes of the decline in its Argentinian market. Even if the prospect of regaining the loss in volume of exports to Argentina is not encouraging, the value of exports could be raised through improvement of quality and presentation of the fruit.

Assuming that some remedial action will be taken to reverse the steady decline in exports, Brazil can at best hope to raise its exports to 200,000 tons by 1975-80, valued at US$7 million (Table 16-14). The assumed unit value of exports does not include the cost of boxing which runs, for cardboard boxing in Ecuador and Central America, at US$22 a ton. If by 1975, Brazil makes a complete shift to boxing, the unit value of exports will show a rise corresponding to the value of the boxes, and total value of exports would rise to US$11 million, without necessarily any change in the price of the fruit.

ORANGES

The production of quality oranges in Brazil is concentrated largely in the coastal belt between Sao Paulo and Rio de Janeiro. The domestic and export demand for oranges as well as orange juice is conducive to marketing larger quantities, but production seems to be a constraint. In spite of its favorable location in the Southern Hemisphere which permits Brazil to market fresh oranges in the off-season (summer) in the Northern Hemisphere when the mediterranean region is not supplying the fruit and South Africa is the only competitor, Brazil has not been able to fully exploit this advantage.

Western Europe is the main market for Brazilian exports (Table 16-15). In the off-season Brazil accounts for only a fifth of the European market, the rest of it being supplied by South Africa. Moreover, the Bra- zilian share of the market has been declining (and for some reason Belgium has not been importing any oranges from Brazil). In fact, exports of fresh fruit reached their peak in 1965 and have since declined. Prior to 1962, ANNEX 16 Page 18 exports consisted of fresh fruit only. The large increase in exports of orange juice which commenced in 1966 (Table 16-16) caused a decline in the quantities of fresh fruit exported.

World consumption of citrus (fruit and juices), which has a comparatively high income elasticity of demand, is expected to maintain its past growth of about 5 percent per annum. World exports are expected to rise correspondingly. At the same time, world prices are expected to remain stable at about their present renumerative levels. By 1975, Brazilian exports of fresh fruit and juice could be doubled as compared to 1968 (Table 16-17). Brazil can be potentially a large supplier of off-season oranges to the Northern Hemisphere. Substantial new plantings have been occurring in recent years but to take full advantage of the favorable market prospects, Brazil would need further increases in plantings. More importantly, Brazil will have to improve quality and grading, mount a promotion campaign, develop additional marketing channels, and simultaneously expand its production of both single strength as well as concentrates of orange juice.

Brazil could profit from the Israeli experience in the field and perhaps there is a case for Brazilian/Israeli cooperation. Israel has a highly developed citrus industry, a superior grading and labeling system, and well-developed channels for the marketing of its fruit. If Brazil and Israel agree, they could enter into a partnership whereby Israel could extend technical assistance to the Brazilian producers in the expansion of off-season oranges of desired quality and. take over their marketing in selected new markets. In this way, Brazil would be able to expand its production and exports, and Israel would be able to assure their buyers in the importing countries that they can supply oranges to them on a 12-month basis. As soon as Israeli supplies slacken, they could start picking up fruit from Brazil, and revert back to Israel when the new season started in the Northern Hemisphere. A year-long market system would provide "captive" buyers for Israel and would insure a reliable export outlet for Brazil.

PEPPER 1/

The little corns of black and white pepper illustrate, in their own small way, the story of Japanese contributions in enriching the agricultural life of Brazil.. The few seedlings introduced by them in 1933, have since multiplied to perhaps 6 million vines yielding 14,000 tons of pepper in 1968 making pepper Para State's most valuable agricultural product. The 1960's were probably a period of most rapid expansion. In 1960-68 production tripled and area doubled recording an impressive increase in visible yields (Table 16-18). However, it is hard to discern a yield trend during the expansion phase because the age distribution of the vines is not known.

1/ See USDA, Foreign Agriculture, February 16, 1970 for a review of the Brazilian pepper industry. ANNEX 16 Page 19

The processing of harvested black pepper seeds involves im- mersion in hot water and drying in the sun which reduces their weight to 30 percent. Turning black pepper into white is the result of a dozen days of soaking in water followed by peeling, washing, and sun drying. The cost of processing explains why white pepper is priced higher than black pepper.

Exports of pepper from Brazil commenced in 1955. By then production had exceeded domestic requirements. Since then exports have risen to about six thousand tons valued at nearly ten million dollars (Table 16-19) representing about 7 percent of world trade. Export outlets are well diversified with the United States, Argentina, Germany and France being the principal markets (Table 16-20). United States is the main market for black pepper and Western Europe for white pepper.

World production and trade in pepper fluctuate a great deal from year, to year. Pepper prices are even more unstable as illustrated by last year's experience. Following a crop failure in Indonesia, which ordinarily is the second largest, after India, producer of pepper in the world, prices rose sharply in 1969. Wholesale prices of pepper in the United States averaged 23 percent higher in 1969 (46.4 cents per pound, or US$1,023 per ton) than in 1968 (37.8 cents per pound, or US$833 per ton). On a monthly basis the price variation was considerably larger (Table 16- 21).

In general, pepper prices have recently been attractive but, the situation may reverse itself after the recovery of production in Indonesia. It is forecast that unit values of exports from Brazil will average US$700 per ton in 1975-80, with value of exports averaging US$8 million (Table 16-19). The market will, however, continue to be characterized by sharp fluctuations in prices and world trade unless some remedial international action is taken. It may, however, be pointed out that Brazilian production has been rising at a steady pace, and fluctuations in production are experienced mainly in the Far East. In fact, Brazil has benefited from the instabilities of the pepper market.

THIE EXPORT OUTLOOK: AN OVERVIEW

It will be recalled that agricultural products account for 85 to 90 percent of Brazil's export earnings; of this, coffee accounts for about half. It is obvious that the outlookc for agricultural exports is important for economic development planning. A second point worthy of emphasis is that, except for a few crops, such as coffee, cocoa, castor oil and sisal, Brazil's share of world exports of most commodities is less than five percent 1/ (Table 16-22). Thus, a priori, a major determinant of the volume of

1/ Cotton, the second most important commodity among agricultural exports after coffee, is a borderline case: Normally 55 percent of the crop is consumed internally; Brazil's share of world exports varies from 4 to 6 percent. ANNEX 16 Page 20 exports in many products, where a small change in Brazil's share of the world market is unlikely to alter the supply-demand relationships in that commodity, is "export availability," i.e., production minus domestic "requirements". Constraints on expanding domestic production of such projects are examined elsewhere in the report, including Annexes 2,3, 10, 11 and 17. Taking these constraints into account, as well as,prospective global developments (particularly concerning price), this Section assesses the overall export outlook. For this purpose, agricultural products are defined as products of agricultural origin, that is, includlng processed products such as soluble coffee, wood pulp, canned meat, processed and canned fruits, and textiles of natural fibers. In spite of the value added content of such products in the industrial sector, their inclusion here is justified because the raw material content of such exports must be taken into account in arriv- ing at export availabilities. For example, textile exports are part of the fiber disposal picture, and canned meat is part of the meat disposal picture.

Product-by-product value, volume and unit value projections were made for 66 commodities presently accounting for 98 percent of Brazil's agricultural exports (Table 16-23). 1/ No uniform concept of "base period" was used, in order thus to be able to give proper weight to "relevant past experience," which varies, over time, from commodity to commodity. Generally, however, attention was focused on the 1960-68 period. The years selected for the projections are 1975 and 1980; but because of the year-to-year fluctuations which are inherent in the commodity markets, the figures should be considered as estimates for the mid and late seventies, or as 3-year averages for periods centered around 1975 and 1980.

The projections were arrived at, in most cases, on the basis of assumptions for supply and domestic demand, and forecasts of export availabilities. Extensive consideration was given to the absorptive capacity of the world market, at independently projected world demand, supply and price levels, to existing or prospective international commodity arrangements, and also to the quality or grade composition of Brazilian supply in relation to world requirements. It is not possible to present all the supporting work here, and only brief explanatory comments on key items and special situations are given.

The overall outlook for 1975 and 1980 is summarized in Table 16-25, along with comparable data for 1960-68. Barring remedial measures, the rate of growth in Brazilian exports during 1966-68 to 1975 is expected to slow down to 3.5 percent per annum, as compared to 4.6 percent in 1960-68. The growth may be further retarded in 1975-80 to an annual rate of less than 2 percent. These numbers include coffee, a key item.

11 Remaining productR, which account for less than 2 percent of Brazilian exports, and for whlich separate projections were not made, are identified in Table 16-24. ANNEX 16 Page 21

The value of coffee exports in 1960-68 increased at a modest rate of 1.8 percent, averaging US$768 million in 1966-68 as compared to US$689 million in 1960-62. 1/ Voluntary restraints on the volume of exports to support world prices broadly characterized this period of relatively slow growth in coffee earnings. The picture, however, changed in the closing months of 1969, when prices rose by nearly 25 percent because of frost and a series of short crops. The value of exports in 1969, provisionally estimated at US$800 million, was only marginally affected by the price increase. How- ever, the price increases, which may last for several years, imply that the value of exports for 1970-72 may average about a billion dollars a year. Therefore, as damaged coffee trees recover and additional supplies from new plantings begin after 1973, prices may decline with the result that the value of exports in 1975 will again recede below the billion dollar mark. Unless a high degree of voluntary restraint or internationally agreed control under the Coffee Agreement is exercised on the rate of new plantings by the major coffee producing countries, prices in 1975-80 will come under considerable pressure. The price declines may more than offset the increase in volume of exports with the result that in 1975-80, the value of coffee exports may not rise by more than 0.5 percent per annunm. If the International Coffee Agreement were to come to an end before then, prices as well as Brazilian earnings could fall even more.

To see the overall export outlook more clearly, let us exclude coffee. The rate of growth in the value of non-coffee agricultural exports in 1966-68 to 1975 is projected at 4.0 percent, barely one-half of the rate of growth experienced in 1960-68 (8.2 percent). This trend may possibly persist up to 1980; however, the annual rate of increase in 1975-80 is reck- oned at 3.8 percent. The general slow down is largely accounted for by fibers, sugar, forest products, vegetable seeds and products, and meat -- which recorded impressive growth during the 1960's. However, forest products and meat are expected to recover their growth momentum in 1975-80.

Several of the major export items or special situations merit com- ment. One is cotton. The volume of cotton exports recorded impressive gains in 196U-68 and prices remained generally favorable. However, the future rate of growth in volume of exports, which may slow down in any case, will be largely offset if the expected decline in world prices occurs. A second important product is sugar. The rise in sugar exports in 1960-68 was favorably irnfuenced by the redistribution of the Cuban quota to the United States market. Increase in quota to the United States is not anticipated and Brazil is not in a favorable position to compete in the free market. Therefore, the future growth in sugar earnings will have to rely exclusively on the strength- enings of prices. Thirdly, forest products: exports, particularly conifer- ous (pine) sawnwood and broadleaved logs and sawnwood rose sharply in-1960-68 under the impetus of strong world demand and rising prices. The near-term future is clouded by the depletion of pine resources and expanding domestic demand. However, the overall exports of forest products are expected to sharply expand in 1975-80, owing chiefly to veneer, plywood and woodpulp.

1/ Coffee is discussed in detail in Annex 10. ANNEX 16 Page 22

Fourth, the rapid growth during 1960-68 in vegetable oilseeds, oils and oilseed cake and meal was largely accounted for by soybean cake and by.sharp rises in prices and volume of castor oil (Brazil accounts for three-quarters of world trade in castor). A continued growth in exports of soybeans and soybean meal and cake is anticipated for the seventies. How- ever, the export prospects for castor oil are clouded by the likelihood of a price fall due to slackening import demand and probable stockpile releases by the United States. In the case of groundnut cake (the oil goes entirely to meet domestic demand), export performance is partly limited by production constraints.

A fifth group of interest is meat and meat products. Exports rose by nearly 10 percent per annum in 1960-68;-the comparable figure is expected to be a meager 1.7 percent in 1966-68 to 1975. Exports of beef and veal may actually decline as rising domestic demand reduces export availabilities. Horse meat exports, gaining from rising demand in the Japanese market, will be the mainstay of the growth in meat exports. However, meat exports may emerge as a major growth commodity in 1975-80 if adequate measures are taken to raise livestock-production.

Among the relatively minor export products, it is expected that orange juice and cashew nuts, which have a high income elasticity of demand and for which exports can be expanded rapidly if domestic production is ,rai4ed, and textiles, where Brazil has the advantage of being a minor supplier, will continue to expand rapidly.

The products which might experience a slowdown in export growth, or continue to stagnate, include pepper and tobacco. Pepper exports doubled in 1960-68 but in the future will be influenced by the expected recovery of output in Indonesia, the world's largest supplier. Exports of tobacco have been fluctuating around a flat trend and only a limited growth is anticipated. Cigar type tobacco is faced with production problems whereas domestic demand for cigarette tobacco has been rising rapidly.

Exports of products such as sisal, carnauaba wax, tea and mate have been declining. The best that can be anticipated is that the rate of decline will slow down. Sisal and carnauaba wax are faced with stiff competition from synthetics, and the demand is stagnant or declining. The Argentine demand for mate, a tea-like beverage, is declining and this is the main outlet. In the case of tea, Brazil -has little chance of competing with South Asia and East Africa. The prices of all these products are expected to decline, unless of course, international action leads to effective stabilization.

In 1960-68, stimulus to growth in agricultural exports was provided by new export products such as maize, soybeans, textiles and orange juice. Some of these new products continue to need development for export, as do some export products being limited by output constraints (cocoa, meat) ANNEX 16 Page 23

and by transportation problems (maize, rice). The problem is more difficult for products suffering fronr limitations or access to markets in the developed countries; examples are cocoa butter and paste, solubl]e coffee and textiles.

If these views are correct, the immediate outlook for exports of agricu. tural products lieed not bo cause for severe alarm -- a] tlough the important extent to whlich this outlook depends on a strouo, coffee price should not be overlookeci. TortetbelEss, the growing reed for foreign exchange and the cloudy out0ook for a.nricultural exports a few years hence, su-gest that acti-on is necessary to in.prove the performance of some of the tradi- tiona.1 e.xport products and encourage the growth of new ones. Proposed measures are discussed in the Lain report.

Table 16-i: TrendB in Brazilian Cotton: Actual 1960/61 to 196B/69, and Projections for 1975 and 1980

______Korta of Raw go-tt-Own !Ezpor Of CtsimVe Pro- U-unit ust Area Lolt duation Mtion value voe Value Value Volme value ooo ha.) (1Kutconl million $ '0o0 B.t. $ l * O .t./.t.

1960/61 2,023 208 123 271 151 15.6 95.4 177.8 4.03 2.21 1,826.9 1961/62 2,226 213 512 282 184 109.7 205.7 533.2 1.64 0.72 2t279.6 1962/63 2,226 220 488 282 249 112.2 215.9 519.5 1.05 o.52 2,015.3 1963/61 2,327 216 S4a 271 223 11h.2 221.8 515.5 1.67 .1.7 1,136.5 194V/65 2,327 193 .50 266 226 108.3 217.0 b98.8 3.27 3.32 98b.6 1965/66 2,226 243 512 260 20h 95.7 195.7 bB8.8 8.17 8.17 1,000.2 1966/67 2,023 220 444 271 221 111.0 235.9 b7o.6 10.31 9.17 1,124.2 1967/68 2,266 263 596 271 182 90.8 189. ht9.-5 1.47 3.90 1,116.8 1968/63g/ 2,631 273 720 288 358 130.8 2h7.6 528.4 4.13 2.87 1,137.6 &24m§tlions

1975 2,300 280 650 335 315 1W0.00 315.00 b50.00 20.0 15.00 1,350.0

1980 2,300 300 700 360 340 145.00 3W0.00 h25.00 32.5 25.00 1,300.0

1/ Calondar year, first of ts year shmon. 2/ Prelininary. Note: Production filgures vy not to equal to the product of arem,and ylield dUe to rou3ding.

Source: PaBt outpmt and disposal data, 1001, Cotton4.brld Statistics, varioua iLsu; past export data, IBNS, Anuaro Estatietico do BrwI8li varoious jusues Table 16-2: TrEDS IN BRAZILIAN SISAL: ACTUAL 1960 TO- 1968, AND PR^JECTIONS F0. 1975 AND 1980

Donestic _ =,orts of Fiber Exports of :'ant.actwes Calendar Year Productio xportsl7 Availabi- Unrit vt lities2/ Value Volume Value VJalue Vo 1e - alue

-o (cOO me-Luric tons)…------'00 'll.$m.t. $/r.t. MiJ .$ '000 m.t. $/m.t.

1960 134.9 107.9 27.0 22.3 107.9 207.1 1961 164.2 129.3 34.9 24.8 128.7 192.7 0.2 0.6 333.3 1962 '71!-0 i39.3 34.7 23i.8 137.1 160.I8 o.6 2.1 2?7.5 1963 172.1 133-9 38.2 36.4 130.0 280.3 1.2 3.9 313.7 1964 i87.1 137.-. 4J1.0 37.5 135.6 276.5 o.6 1.5 ' .9 1965 195.0 13.5 41.5 24.6 15,0.2 '63.5 1.C 3.3 293.8 1966 190.0 '59.0 31.0 23.2 152.6 151.8 1.7 6. 256.L 1967 185.0 135.3 L9.7 -_6.3 127.8 127.3 1.6 7.5 242.L 1968 '30.0 153.°c3/ 26.1 17.C 1).6.1i 16.5 1.6 7.8 2 2.6

Projections

1975 180.0 14o.0 40.o 15.6 125.0 125.n 3.3 15.0 220.0 1930 1a5.0 Lo.o 45-.Q 14a4 120.0 1-20 . 4.4 20.0 220.0

1/ Fiber aid manufactures. 2/ Production minus e:oo:s. 3/ ,,AO estti.ate for 26'J is 11h3.4 (135.6 fiber, 7.8 m-nufnctures).

Source: Production stat,istics fron FAO, ':ard Fiber StatisLics" (per-cdically published document), vario-s issues; others frort IBGE, Anuaro Zstatistico do Brazil zrious -ssues. Table 16-3: TREN1 IN BRAZIAN WO: ACTUAL 1960 TO 1968 AND ExPORT PRiOJECTIONS FMR 1975 AND 1980

Sheep 1u2ibers Production _ _ _ports_3 _ Brazil Rio Grande Brazil Rio Grande Imports Exports Domestic Unit do Sul do Sul Availabi)- Value Volume Value itie-- (millions) '000 metric torn s/m.t. million i 'O00 m.. 1960 18.2 10.1 22.7 22.1 0. 4 1.1 22.0 1.1 1.1 1,006 1951 19.2 10.8 24.6 23.9 1.2 0.4 25.4 0.3 1962 0.4s 673 19.7 10.8 25.2 24.6 o.6 0.1 25.7 0.1 0.1 474 1963 21.3 11.5 26.5 25.7 3.0 3.3 26.2 2.9 196-, 3.3 873 21.9 11.9 28.1 27.3 - 12.5 9.6 23.5 18.5 1965 1,272 22.3 11.9 29.1 28.2 - 24.3 314.8 15.0 JJ4.3 1966 22.1 1,040 11.8 27.9 27.1 0.1 21.8 6.2 25.5 21.8 1,168 1967 23.1 12.3 28.3 27.4 0.7 20.9 8.1 19.8 20.9 1968 24.6 947 13.4 30.7 29.6 1.3 19.4 11.3 15.5 19.4 799 Projections

1975 - - - - 22.5 25.0 900

1980 ------25.5 30.0 850

3, Includirg tope.

2/ Production pbls imports, minus exports.

Source: IBGE, Anuario Estatistico do Brazil, various issues. Table 16 4: TRE!4W IN sRAZTIIN JITE: ACTUAL 1960 TO 1968 AND PRDJECTIONS FMR 1975 AND 1980

Exports of Raw Jute Exports of Jute Textiles Dbmestic Jnit unit Production Area Yields RKports-t' AvailabiJ 7 Value Volume Value Value Volume Value

'000 . 0 ha. kgroi it- s o i 000°°°$ '000 m. t. Vn.t.

1960 38.9 28.0 1,389 0.2 38.7 48 0.2 209.6 - 1961- 48.2 35.6 1,353 0.3 47.9 78 0.3 281.6 - - - 1962 47.5 40.7 1,167 0.4 47.1 25 0.1 200.0 116 0.3 503.8 1963 44.1 36.1 1,222 3.1 41.0 546 2.6 207.8 238 0.5 6,20.4 1964 51.2 41.8 1,226 9.6 41.6 1,005 4.3 235.3 2,848 5.3 5 3 1965 61.6 47.3 1,303 17.2 44.4 2,531 10.1 250.9 4.234 7.1 59L.9 1966 44.5 33.7 1,320 6.5 38.0 882 3.4 257.8 2,C93 3.1 66-5.3 1967 40.3 43.2 934 10.2 30.1 886 3.5 252.7 3,239 6.7 L93.0 1968 51.2 48.4 1,057 19.1 32.1 774 7.9 199.6 7,222 15.2 474.1

Projections 1975 70.0 50.0 1,400 27.5 42.5 1,500 7.5 .30.0 9,(YY 20.0 450.0

1980 85.0 56.6 1,500 35.0 50.0 1,800 10.0 180.0 __& 0 0 25.0 0 25.o TI Fiber and manufactures. 2/ Production minus exports.

Source: -IBGE, Anuario Estatistico do Brazil, various issues Table 16-5: PRODUCTION, CONSUMPTION AND TRADE OF FATS AND OILS, AVERAGE 1960-62, 1965-67 AND PROJECTION FOR 1975

Production Net Tradel/ 1960-62 1965-67 1975 1960-62 1965-67 1975

...... 1,000 metric tons oilequivalent.

Edible fats and oils

Vegetable

Cottonseed 114.0 117.3 200.0 - 1.1 - 1.0 - Groundnuts 158.6 233.5 255.0 - 3.9 - 2.6 - 2/ Soybean 21.5 58.3 288.0 - 10.3 - 31.4 - 77.3 Sesame .7 .5 .8 - .7 - - Corn 4.6 6.2 8.7 - - - Olive 0 0 0 10.4 9.7 10.0 Babassu 56.6 57.4 58.o 4.0 7.2 7.0 Palm 4.2 9.8 18.0 - - - Coconut 64.2 102.0 180.0 - - - Cocoa butter 14.0 21.5 29.1 - - - Other 3/ 7.0 13.7 25.9 - --

Subtotal 445.4 620.2 1,063.5 -- 9.6 - 32.5 - 74.3

Animal fats Butter 27.14 25.0 30.0 - - - Lard, tallow 320.0 310.0 200.0 -4 Other 4.1 3.3 4.0 .4bv l.3' -

Subtotal 351.5 338.3 234.0 .4 1.3 -

Total edible 796.9 958.5 1,297.0 - 9.2 - 31.2 - 74.3

Industrial fats and oils Castor 79.6 120.5 211.0 - 64.5 103.3 -190.0 Linseed 8.2 12.h 20.0 - 1.2 - - Oiticica 20.4 26.2 32.0 - 13.0 - 8.5 - 13.0 'rung 1.1 1.1 1.1 - .4 - .6 Coffee 4.5 3.7 4.0 - - - Tallow 47.4 50.9 56.o - _ _ Other 2.5 4.0 5.5 - - 1.1 - 1.8

Total industrial 163.7 218.8 329.6 - 79.1 -113.5 -205.- Total Fats and Oils 960.6 1,177.3 1,627.1 - 88.3 -1W14.7 -279.7

1/ Minus sigin preceding figure indicates net exports. 2/ Squal to 432,880 tons bean equivalent. Exports are likely to be as beans. 3/ Of which about 2,0OO tons sunflowerseed oil. b/ Fishoil.

Source: Historical data from Anuario Estatistico do Brasil (various issues). Table 16-5: PRODUCTION, CONSUMPTIDN AND TRADE OF FATS AND OILS, Page 2 AVERAGE 1960-62, 1965-67 AND PROJECTIDN FOR 1975

Consumption Oilseed Meal Exports 1960-62 1965-67 1975 1960-62 1965-67 1975

..1,000 m tons oilequiv ...... 1,000 metric tons.....

Edible fats and oils

Vegetable Cottonseed 112.9 116.3 200.0 22.6 18.1 70.0 Groundnuts 154.7 231.9 255.0 83.h Ii41.6 148.o Soybean 11.2 26.9 210.7 - 138.5 460.2 Sesame - .5 .8 Corn 4.6 6.2 8.7 Olive 10.4 9.7 10.0 Babassu 52.6 50.2 51.0 Palm 4.2 9.8 18.0 Coconut 64.2 102.0 180.0 Cocoa butter 14.0 21.5 29.1 Other 1/ 7.0 13.7 25.9 58.6 46.1 24.0 Subtotal 435.8 588.7 989.2

Animal fats Butter 27.4 25.0 30.0 Lard, tallow 320.0 310.0 200.0 Other 4.5 4.6 4.0

Total edible 787.7 928.3 1,223.2

Tndustrial fats and oils Castor 15.1 17.2 21.0 Linseed 7.0 12.4 20.0 2.3 6.7 11.0 Oiticica 7.4 17.7 19.0 Tung .7 .5 .5 Coffee 4.5 3.7 4.0 Tallow 47.4 50.9 56.0 Other 2.5 2.9 3.7

Total industrial 84.6 105.3 124.2

Total Fats and Oils 872.3 1,033.6 1,347.4 166.9 351.0 713.2

1/ Of which about 2,000 tons sunfloweredseed oil.

Source: Historical data from Anuario Estatistico do Brasil (various issues). Table 164-6 POPULATION AND CONSUMPTION OF FATS AND OILS AVERAvE 1960-62t 1965-67 AND PROJECTION FOR 1975 OILEQUIVALENT

Yearly ieercent change 1960-62 1965-67 to to 1960-62 1965-67 1975 1965-67 1975

Population (million 71.9 83.9 110.2 3.1 3.1

Consumption Total (1,000 m,tons) 872.3 1,033.6 193)47J4 3.4 3.0 Edible 787.7 928.3 1,223.2 3.3 3.1 Industrial 84.6 105.3 124.2 4.5 1.9

Per capita consumption Total (kilograms) 12.1 12.3 12.2 0.3 - 0.1 Edible 11.0 11.1 11.1 0.2 - Industrial 1.2 1.3 1.1 1.6 - 1.7

Source: Historical data from Anuario Estatistico do Brasil (variouE issues)

Table 16-7: EXPORTS OF OILS 1/ AND OILSEED MEALS AVERAGE 1960-62, 1965-67 AND PROJECTION FOR 1975

Yearly jeercent change

to to 1960-62 1965-67 1975 1965-67 1975

..... e .*cthousand metric tons...... Oils

Total 88.3 144.7 243.7 10.4 6.o Edible 9.2 31.2 74.3 27.9 10.1

Industrial 79.1 113.5 169.4 7.5 4. 6

Oilseed Meals 166.9 351.0 713.2 16.0 8.2

1/ Including oilequivalent of seeds.

Source: Historical data from Anuario Estatistico do Brasil (various issues) Table 16-8: WORLD MEAT PRODUCTION AND SHARE ON TOTAL PRODUCTION BY REGION AN] SELECTED COUNTRIES AVERAGE 1965-67

Total Share of Total Produotion Production

(1,000 nuetric tons) (Percent) Europe 239319 29.5 North America 22,948 29.0 Central.America 1,649 2.0 South America 7s,164 9.1 of which: Argentina 2,9941 3.7 Brazil 2,274 2.8 Asia 3,532 4.5 Africa 3,166 4.0 Oceania 2,502 3.2 Centrally Planned Countries 1/ .21!763 18.7

World Total 799043 100.0

1/ Excluding Mainland'China

Source: FAO, Production Yearbook 1968. Table 16-9: PRODUCTION AND CONStDIPTION OF MEAT BY TYPES Y 1960-6z AND T 5-19b57VERAMB, PROJECTIONS FOR 1975 AND ANNUAL RATES OF GROMJ7H (thouuand metric tons, carcass weight)

Annual Rates of Growth Actual Pro.Jections 1975 * 1960-62 12965-67 to 1975 * to 1960-62 1965-67 I II III 1965-67 I II III Beef and Veal Production 1,361.4 1,484.9 1,743.5 1,743.5 1,977.7 1.8 1.8 1.8 3.2 Net trade 2/ - 23.8 - 36.0 - 36.0 - 36.o - 36.0 Consumption, total 1,337.6 1,448.9 1,707.5 1,707.5 1,941.7 1.6 1.8 1.8 3.3 Per caput cons. (kg.) 18.6 17.3 15.5 15.5 17.6 Pork Production 532.1 643.0 907.3 990.0 838.6 3.9 3.9 4.9 3.0 Net trade - - 0.6 - - - Consumption, total 532.1 642.4 907.3 990.0 838.6 3.9 3.9 4.9 3.0 Per caput cons. (kg.) 7Ai 7.6 8.2 9.0 7.6 Larib and Mhtton Production 24.5 32.8 55.4 55.4 43.5 6.0 6.o 6.0 3.2 Net trade - - 1.1 - - - Consumption, total 24.5 31.7 55.4 55.4 43.5 5.3 6.4 6.4 3.6 Per caput cons. (kg.) 0.3 0.4 0.5 0.5 0.4 Goat Production 17.8 21.3 29.5 29.5 32.7 3.7 3.7 3.7 4.9 Net trade - - - - - Consumption, total 17.8 21.3 29.5 29.5 32.7 3.7 3.7 3.7 4.9 Per caput cons. (kg.) 0.3 0.3 0.3 0.3 0.3 Poultry Production 7.2 24.7 70.O/ 70.02/ 33.5 28.0 12.3 12.3 3.4 Net trade - - _ _ _ Consumption, total 7.2 24.7 70.0 70.0 33.5 28.0 12.3 12.3 3.4 Per caput cons. (kg.) 0.1 0.3 0.6 0.6 0.3

Offals (edible) 4/ Production 52.7 61.5 80.9 80.9 80.9 3.1 3.1 3.1 3.1 Net trade - 1.8 - 2.5 - 2.5 - 2.5 - 2.5 Consumption, total 50.9 59.0 78.4 78.4 78.4 3.0 3.2 3.2 3.2 Per caput cons. (kg) 0.7 0.7 0.7 0.7 0.7 Horse Meat Production 5.7 / 18.0 18.0 18.0 13.6 13.6 13.6 Net trade - - 5.7 _ 18.0 - 18.0 - 18.0 Consumptlon, total - - - - Per caput cons. (kg.) - - - - - Total Meat Production 1,995.7 2,273.9 2,904.6 2,987.3 3,024.9 2.7 2.8 3.1 3.2 Net trade - 25.6 -49,9 - 56.5 - 56.6 - 56.5 14.3 2.5 2.5 2.5 Consumption, total 1,970,1 2,228.0 2,848.1 2,930.8 2,968.4 2.5 2.8 3.1 3.3 Per caput cons. (kg.) 27.4 26.6 25.8 26.6 26.9 - o.6 0.3 0.0 0.1

AssuMptions: I Continuation oi' i960-62 to 1965-67 production trends except for poultryj see footnote 3. I1 Maintaining 1965-67 per capita consumption levels, but adjusting consumption pattern, e.g., increase in pork consumption. III Consumption projection based on income elasticities.

1/ Excludes horse meat. 2/ Includes exports of canned beef. Assumnes twice the actual yearly increase achieved in 1960-62 to hi Tongues, tripes, kidneys etc. J/ Estimated. 1965-67.

Source: Historical data from Anuaric Kstatistioo do Brauil (various iosues). Table 16-10: EXPORT UNIT VALUES FOR BESF AND VEAL (dollars per metric ton)

Yearly Rate of -GowtJi 1960-62 1966-68 1975 1966-68 to 1975

Frozen 482 583 630 1.0 Chilled 131 570 620 1.0 Canned 816 791 V 865 1.0 Veal *526 545 590 1.0

Dressed, salted 3/ 19052 1,223 1,323 1.0 Horse Meat 309 450 4.2

Vt 1965-67.

gg1961-62/

Source: Historical data from Anuario Estatistico do Brasil (various issues). Table 16-11: PRODUCTION, EXPORTS AND CONSUMPTION OF TEA, 1960-62 AND 1965-67 AVERAGES AND PROJECTIONS TO 1975

(thousand metric tons)

1960-62 1965-67 1975

Production 1 1.6 2.9 4.0

Exports 1.1 2.5 3.4

Consumption (total) 0.5 0.4 0.6

1/ As reported by the State of Sao Paulo (reported to account for some 99 percent of Brazilian output).

Source: Historical data from Anuario Estatistico do Brasil and FAO Tea Statistics, Doc. CCP:Tah/A697WP1. ,able1XPORTS1642: PRODUCTION, AND CONSUMPTION OF' CORN 1960 A 9 7 AvERAGES AND PROJECTIONS TO 1.975 ANIl 1980

1960-62 1965-67 1975 1980

Production 9,098 12,103 19,290 24I,60o

Net trade - 2 - 535 - 1,55O - 2,000

Consunption 9,096 11P568 17,790 22,9600

Source: Historical data from Anuario Estatistico do Brasil, various issues. Table 16-13: EXPORTS OF BADINAAS BY DESTIVATION', 1962-68

(weight 1iOOO M tons; value million U.S. dollars)

1962 1963 1964 1965 1966 1967 1966 7ar- Total 1uarn- Total Quan- Total Quan- Total Quan- Total Quan- Total Quan- Total t tt Value ti«ty Value tity Value tity Value tity lValue * tity Value tity 1.alne

Argentina 180 2.1 175 1.9 186 14.2 194 5.2 179 4.6 149 3.9 140 L.!

Uruguay 32 1.0 29 0.9 34 1.5 18 1.0 26 1.7 22 1.7 20 1.5

All O:hers 4 0.1 2 0.1 5 0.1 4 0.1 ------

Total 216 3.2 206 2.9 225 5.8 216 6.3 205 6.3 171 5.6 160 5.6

Source: UN, Connodity Trade Statistics, 1962-1968. Table 16-114: PAST AND PROJECTED EXPORTS OF BANANAS FROM MAZIL

Valye Volume Unit Value of Export (million US$) (thousand metric tons) ($/metric ton)

1960 4.6 266.1 17.1

1961 3.8 270.5 14.0

1962 3.2 238.0 13.6 1963 2.9 226.5 12.9 196h 5.8 248.1 23.5

1965 6.3 237.3 26.A 1966 6.3 225.3 27.9

1967 5.5 188.0 29.5

1968 5.6 176.1 31.9

1975 7.0 200.0 35.0/

1980 7.0 200.0 35.ol/

I/ Sec the text remarks. Table 16-15: . EXPORTS OF ORATGES BY DESTINATION, 1962-68

(quantity 1,000 M tons; value million U.S. dollars)

1962 1963 1964 1965 1966 1967 1968 Quan-o- Quun- Total Quan- Total - Quan- Total Quan- Total Quan- Total tity Value tity Value tity Value tity Value tity Value tity Value tity Value

France 1-L 0.6 25 1.1 12 o.h 20 0.9 - - 6 0.2 7 0.2 Germany, F.R. 22 1.0 23 0.9 13 0.5 15 0.8 15 0.7 12 0.4 9 0.41 Netherlands 36 1.5 U 1.9 37 1.l 60 2.6 37 1.7 hO 1.6 26 1.1 U.KX. 30 1.5 38 1.7 22 0. 8 32 1.4 15 0.6 22 0.7 15 0.5 Sweden - - - - 3 0.1 h 0. - - 3 0.1 3 0.1 All Others 5 0.2 19 0.8 13 0.7 32 1.8 12 0.8 7 0.5 13 0.8 Total 107 L.8 19 6.4 100 3.9 163 7.6 79 3.8 90 3.5 73 3.1

Source: UN, Coninodity Trade Statistics, 1962-1968. Table 16-16: EXPORTS OF ORAN'GE JUICE,' BY JESTINATION, 1962-68

(quantity 1,000 M tons; value million U.S. dollars)

1962 1963 1964 1965 1966 1967 1968 Quan- Total Quan- Total Quan- Total- Quan- Total Quan- Total Quan- Total Quan- Total tity Value tity 'value tity Value tity Value tity Value tity Value tity Value

U.S.A. - - - - 2.0 o.6 1.0 0.5 2.0 0.7 3.0 1.3 12.0 4.6

Canada - - 2.0 1.2 1.0 0.6 1.0 0.3 4.0 1.4 3.0 1.0 6.0 2.7

France ------1.0 0.4 - -

Germany, F.R. - - 2.0 0.8 0.6 0.2 3.0 1.1 5.0 1.8 8.0 2.4 6.0 2.1

Netherlands ------1.0 0.3 2.0 0.8 1.0 1.6

U.K. - - - 0.4 0.1 0.8 0.3 o.6 0.2

Sweden - - - - - 0.3 0.1 0.6 0.2

All Others - - 1.0 0.2 0.4 0.1 1.0 0.1 1.? P.°4 0.9 0.5 1.3 0.4

Total - - 5.0 2.2 4.0 1.5 6.0 2.0 14.1 84. 19.0 6.8 30.5 11.8

1/ Includes small quantities of other juices.

Sourcet UN, Coimmodity Trade Statistics, 1962-1968. Table 16-17: PAST AND PROJECTED EXPORTS OF FRESH AND PROCESSED ORANGES

Fresh Oran-es Orange Juice Volume Value Unit Value Volume Value Unit Value (i,Ob tons) (million US$) ($Wton) (1,000 tons) (Tnrllion US$) ($/ton)

1966-68 Average 86 3 40 21 8 362

1975 150 6 40 50 18 360

1980 200 8 hO 70 25 360

Note: Unit values of export were compiled before rounding. Table 16-18: PRODUCTION OF BLACK AN]} WH{I' PEPPER IN BRAZIL

Year Production Area Yield (1,000 tens) (1,000 hectares) (kilos/hectire)

1960 4.1 2.4 1,701

1961 4.7 2.9 1,591

1962 3.8 3.0 1,259

1963 6.5 3.7 1,722

1964 6.5 3.8 1,721

1965 8.9 4.4 2,021

1966 9.9 4.4 2,2 43

1967 10.3 4.8 2,165

1968 14.1 5.6 2,532

Source: Anuario Estatistico do Brasil, 1963-69 issues. Table 16-19w EXPORT OF BLACK AND WHITE PEPPER FROM BRAZIL

Value volume Unit Value (million U5$) (thousand metric tons) ($/metric ton)

1960 2.5 1.9 1,303.3

1961 2.9 2.9 991.1

1962 2.2 2.8 802.4 1963 1.8 2.3 791.0

1964 3.0 4.0 751.1

1965 6.o 7.4 815.0 1966 5.4 6.4 847.8

1967 6.2 9.7 640.0 1968 5.6 9.7 574.3

1975 7.7 11.0 700.0 1980 8.4 12.0 700.0 Table 16-20: EXPORTS OF PEPPER BY DESTINATION 1962-1968

(quantity 1,000 M tons, value million U.S. dollars)

1962 1963 19694 1965 1966 1967 1968 QWan-iPTo Quan- Tlotal QZuan- ToLa'I uan- -ToTA2 I. 7aia wuan-QWMT-iTo-aL wuEF--ro- tity Value tity Value tity Value tity Value tity Value tity Value tity Value

U.S.A. 0.8 0.5 O.4 0.2 1.3 0.8 3.2 2.5 2.5 1.9 3.4 1.9 3.9 2.0 Argentid 1.1 1.1 0.8 0.7 1.3 1.2 1.0 0.9 1.2 1.2 1.2 1.0 1.0 0.7 Other Latin America 0.1 0.1 0.3 0.3 0.5 0.4 o.6 0.5 0.8 0.7 1.0 0.6 1.4 0.9

France - - 0.2 0.1 - - 0.1 0.1 0.3 0.2 1.1 0.7 0.9 0.5 Gerimtnj F.R. 0.3 0.2 0.4 0.3 0.6 0.4 1.5 1.3 0.9 0.8 1.6 1.0 1.4 0.9 Other Western Europe 0.4 0.3 0.3 0.2 0.3 0.2 0.7 0.5 0.4 0.4 0.8 o.6 0.9 0.5

All Others- 0.1 * - - 0.1 * 0.3 0.2 0.3 0.2 0.6 0.1 0.2 0.1

Total 2.8 2-.2 2.4 1.8 4.1 3.0 7.4 6.0 6.4 5.4 9.7 6.2 9.7 5.6

* Tess than $50,000.

Source: UN Comowdity Trade Statistics 1962-68. Table 16421s RICES OF BLACK PEPPER

United States Brazil Year Wholesale Price lj Unit Value of Export

1960 1,301 1,303 1961 992 991 1962 816 802 1963 750 791 19614 860 751 1965 1,058 815 1966 9148 848 1967 847 64o 1968 833 574 1969 1,023 -

January 1969 866 February 888 March 888 April 871 May 882 June 871 July 904 August 926 September 1,014 October 1,653 November 1,301 December 1,213

1/ Annual Average, Black Malabar, New York Spot. Table 16-22w BRAZIL'S SHARE IN WORLD GROSS ZXPORTS OF SELlCTED AGRICULTURAL COMMODITIES, 1965-67 AVERAGE

S.I.T.C. Woald r l B:sil Exports No. bport* as % of World

(.... Million U.S.$.....)

011.1 Beef and vedl meat llf.3 14.7 1.3 011.2 Sheep aud geat meat 28$.4 0.6 0.2 011.3 Pork meat 289,.9 0.4 0.1 011.5 Horses,, aose meat 33.,0 1.8 S5. 011.6 Offal$ 156;.8 1.1 0.7 012 Meat, drle ,,salted, ate. 384.7 1.5 0.4 013 Meat proparations 74Q,02 12.9 1.7. 03 Fisheries.products 2,060.0 5.3 0.3 042 Rice 1,051.1 20.6 2.0 043 Maize (corn) 1,500,1 27.3 1.8 051.1 Oranges 466.4 4.9 1.1 051.2(2) Other.citrus 42.1 0.1 0.2 051.3 Bananas 459.6 6.0 1.3 051.7 Coconuts 36.4 0.2 0.5 054.2 Beans, peas, lentils 266.8 0.1 0.03 061.1) Sugar, raw and 061.2) refined 1,977.3 72.5 3.7 071.1 Coffee,, green, roasted 2,193.3 1/ 725.1 33.1 072.1 Cocoa beans 518.4 45.9 8.9 072.2 Cocoa products 58.3 20.5 35.2 074.1 Tea (excluding mate) 662.7 2.0 0.3 075.1 Pepper and pimento 103.3 5.9 5.7 081.2 Bran, pollard and other by-products8 103.4 2.3 2.2 081.3 Groundnut, cake and meal 127.3 10.6 8.3 081.3 Soybean, cake and meal 289.7 10.8 3.7 081.3 Linseed, cake and meal 52.7 0.5 0.9 081.3 Oileeed, cake and meal, n.e.s. 22.7 2.7 11.9 121 Tobacco, unmanufactured 1,207.2 23.1 1,9 22 Rides and skins i/ 707.9 26.6 3,8 1.3 221.1 Groundnutits 278.2 3.7 221.4 Soybeans 830.8 16.5 2.0 221.5 Linseed 76.5 0.3 0.4 221.8 Sesame seed 38.6 0.3 0.8 63-645) Forest products 9,494.2 74.4 0.8 262.1 Wool, greasy 1t444.0 16.2 1.1 262.2 Wool, degreased 332.7 0.7 0.2 263.1 Cotton, raw 2,280.0 99.2 4.4 264 Juts 203.9 1,4 0.7 265.4 Sisal and other agave 97.4 21.3 21.9 421.4 Groundnut oil 140.0 0.6 0.4 422.5 CastQr oil 33.2 24.1 72;6 422.9 Tung oil 17.8 0.2 1.1

/ Indigenou exports / 1966-68 average Review Source; FAO, Trade Yearbook 1968 (pub.*Ushed pr*-print),. FMO COsmod!t. (various issues), Yearbook _q Ferest Produc,ts, 19,7 and 1968 issues. Table 16-234 AGPIVCULTURALFXFORTS OF BRAZIL, VALUE, VOLUMEAND UNIT VALUTE,1960-1968 AND PROJECTIONS (Value irk mrillion US$, Volume in thousand metric tonks, unit Value in $/metric ton)

1960 1961 1962 1963 1964, 1965 1966 1967 1965 1975 195o

:f:ee, Bearns Value 712.7 710.4, 64,2.7 74,8.3 759.7 706.6 761,.O 701,.7 774,.5 92-0.0 900.0 Volune I~/ 16,819. 0 16,970.6 16,376.1 19,513.1 11,,91,6.2 1.3,4,82.2 16,831.8 16,737.5 18,4,57.7 20,00o. 0 22,51.0J Unit Value j, 12.14 4,1.9 39.2 38.3 50.8 52.4 1,5.4 1,2.1 142.0 4,6.0 1,0.0

Ocf7ee, Soluble Value .. 0.1 0.1 0.1 0.2 0.7 9.5 26.3 22.8 32,.O 4,2.0 Vol'.:ne 0.1 0.8 0.8 1.4, 2.1 ll,.9 198.6 591.6 576.9 700.0 1,000. 0 Unit Valued 29.2 69.6 68.9 103.5 103.5 50,0 1,7.9 1,7.8 39.5 4,8.0 4,2.0 C,ott,,. axd Oth,er F`ibers Valu.3 45.6 109.7 13.22 11h.2 108.3 95.7 111.0 90.6 130.8 11,0.0 1145.-0 Volume 95.1, 205.7 215.9 221.8 217.0 195.? 235.9 189.4, 24,7.b 315.0 3140. 0 Unlit value 1,77.8 533.2 5i.9.5 515.0 1,98.8 0,8.8 1,70.6 1,79.5 528.1, 1,50.0 1,25.0 SiSal Value 22.3 24,.8 24,.8 36.1, 37.5 21,.6 23.2 16.3 17.0 15.6 3~. Volume 107.9 128.7 137.1 130.0 135.6 1.50.2 352.6 127.8 11,6.i 125.0 12 Z.0 Unit Value 207.1 192.7 180.8 280.3 276.5 163.8 151.8 127.3 116.5 125.0 13.20.

vkocl, including Tops Value 1.1 0.3 0.1 2.9 23.5 15.0 25.5 19.8 15.5 22.5 25.5 Volume 1.1 0.1, 0.1 3.3 18.5 l1,.3 21.8 20.9 19.1, 25.0 30.0 Unit Value 1,005.7 673.2 4,741, 873.2 1,271.5 1,o1,8.8 1, I68.4 91,7.1, 798.6 900.0 850.0

ValLe .. 0.3 0.4, 0.2 0.3 0.5 1.0 1.2 1.1, 3.0 3.0 Volume .. 0.8 0.9 0.6 0.9 1.7 3.1 3.6 4,.6 .10.0 10.0 Unit Value 44,13.9 1,25.1 1,03.3 337.2 280.7 319.6 332.1 315.0 300.0 3192.0

Jite Value 0.1 0.1 .. 0.5 1.0 2.5 0.9 0.9 0.8 1.5 1.8 Volume 0.2 0.3 0.1 2.6 1,.3 10.1 3.2, 3.5 3.9 7.5 10.0 Urit Value 209.6 281.6 200.0 207.8 235.3 250.9 257.8 252.7 199.6 200.0 180.0

Csr.er Fibers Value 2.7 3.1, 3.7 1,.2 4,.1 3.2 3.4, 3.5 5.0 5.5 5.0 ;olu.'ne 18.6 19.7 22.9 29.0 38.1, 22.9 114.7 13.5 27.7 30.0 30.0 Unit Value 211,3.1 1741,. 160.1 165.5 105.8 139.6 230.9 256.7 179.9 165.0 165.0

g;xa, Raw Value 52.5 65.6 39.1 62.7 33.0 51,.0 80.5 80.4, 101.6 128.2 11,0.5 Volumte 700.0 782.7 4,39.6 4,61.4, 252.1 709.8 1,004,.5 1,001.3 1,026.2 1,009.4, 1,10.0 Unit Value 75.0 83.8 89.0 136.0 130.7 76.1 80.2 8C.3 99.0 127.0 328.0 Forest rod..ts ':.eous Pine) Sawnwood Value 1,2.1 1,6.8 36.2 34,.8 4,6.4, 51.7 56.2 50.5 71.3 59.5 51.0 Volut"e 551,.9 651,.9 4,74.2 4,61.9 63i4.1 675,24 716.2 619.7 787.8 700.0 600.0 unit Value 75.9 71.1, 76.4, 75.3 75.5 76.5 78.5 81.5 9o.6 85.0 85.0 Broadleaved Loge A&Sawnwood Value 3.9 3.6 3.8 4,.7 6.0 10.5 12.0 12.0 11.9 9.0 15.0 Volume 73.6 72.0 71.0 77.1 86.5 101.7 118.0 135.6 111.4 100.0 175.0 Unit Value 53.1, 1,9.8 54,.2 61.3 69.2 103.4, 101.3 88.6 1o4,.3 90.0 85.0

Prepared Wood Value 0.3 0.1, 0.1, 0.7 0.9 2.0 4,.1 3.5 7.1, 16.5 35.0 (7eneer, plywood, etc.) Volume 2.7 3.2 2.6 4,.7 4,.8 7.1 9.5 12,.1 21.1 60.0 130.0 Unit Value 105.3-r 131.7 166.9 11,.6 189.0 282.6 2,31.2 21,5.6 34,9.8 275.0 250.0

Reconstituted Woo Value 0.1, 0.4, 0.1 0.2 1.0 1.8 2.2 2.9 3.05. 2 and~Wood ProduLcta Volume 3.6 2.5 0.8 2.8 13.0 20.9 21.1, 27.8 27.8 50.0 2,0.0 UnLit Valuse 99.1, 150.7 73.0 79.8 78.5 86.1 io4,.9 105.1, 107.8 105.0 105.0

Wood Pulp, Chezical Value- - 0.1 0.3 1.5 4,.2 2.5 1.2 1.1 16.5 h5.5 Volume - 0.4, 1.9 9.8 28.3 17.0 8.1 7.7 150.0 350.0 Urnit. Value - - 137.1 11,3.8 151.0 14,8.2 11,5.7 11,3.6 1.42.4, 1.10.0 130.0 Table 16-23: (Continued)

1960 1961 1962 1963 1964, 1965 1966 1967 1968 1975 1.93i rer'!a1.9 21 5. 908. t ~~~~~~Value 0.4, 0.2 .. 29.5 2.9 27.9 31.8 2.1 50690 8. ,,,.-n ~~~~Vol,ne 9.9 4,.4, . 699.2 62.3 559.7 627.1 4,30.4, 1,238.0 1,500.0 1, 803). Unat Value 4,1.1 4,0.5 4.12.2 '4,7.0 2,9.9 50.7 51.2 4,6.1 4,6.0 1,0.0

Mice Value .. 13.2 1,.7 - 0.9 23.8 33.3 4,.8 21.2 25.0 30.0 VolumeW 0d, 150.8 4,3.7 12.4, 236.8 289.3 31.9 .158.2 250.0 300.0 Unit. Value 624.5 87.3 108.7 - 68.5 100.4, 115.2 151.1 1324.1 100.0 103. 0

Corn Meal I/Value .. 0.1 o..6 0.6 2.14 3.3 1.1 1.8 (2.0) (2.0) Volume 0.5 2.0 0.9 12.4, 13.6 5R.1 624.2 21.6 38.2-- UnLit value 25.3 1,0.5 4,3.5 1,6.4, 46.9 4,6.0 51.3 4,9.8 4,7.8

CZcoa Beama Value 69.2 1,5.9 ?4.2 35.0 324.8 27.7 5O.? 59.2 1,6.1 53.0 56.0 Volume 125,5 101,.2 Su. 68.7 74,.7 92.0 UR4 M1A1 75 W)00. 15.0 Ut.itValue 551.14 1,1,08 1,37, 510.0 4,66.0o 301,1 41,5-0 51?d& 600 530.0 160.0

Cocoa Butter Value -21,.6 llj.8 16.8 15.7 10.8 13.3 20.8 25.1 25.9 30.0 32.0 Volume 22.6 15.0 16.8 l1h.0 10.3 17.2 21.0 21.0 18.1, 25.0 32.0 UrnitValue 1,090.0 984,.7 999.8 1,119.6 1,050.0 776.1 988.7 1,195.7 i,,01,.4 1,200.0 1,000.0

Co,coa Powder Value 0.4, 0.2 0.1 0.1 0.1 . 0.2 0.1 0.2 0.2 0.2 Volume 1.3 0.6 0.5 0.6 0.8 0.5 1.7 0.9 1.3 1.5 2.3 Unit Value 290.4, 280.9 11,3.2 110.0 119.7 66.2 90.7 123.0 157.9 125.0 100.0

Cocoa Cake Value 4,.4 1.5 0.5 0.6 0.7 0.3 0.5 1.1 1.1 0.90. Volum 20.1, 124.0 5.8 5.6 6.1 3.14 5.7 8.4, 7.1, 7.0 7.0 Unit Value 213.7 105.9 92.2 97.3 13.41 93.6 94,.1 182 1,. 3. 3.

Catr(ila Value 9.7 23.9 124.8 17.8 224.1, 26.8 22.3 23.2- 36.1, W,. ,. Volume 1,1.9 90.8 60.8 77.4 1n.110 14,0.2 95.0 74,.6 116.3 190.0 190.0 Unit Value 232.1 262.7 21,3.7 230.0 220.1 190.9 235.0 310.7 312.6 230.0 230.0

Babacu. Oil Value - - 0.7 0.1 -3.6 1.5 1.2 2.9 1.8 2.3 volume - - 3.3 0.6 - 12.0 5.5 1,.2 9.0 7.0 9.0 UnLit Value - - 205.5 185.4, - 296.9 276.0 285.6, 325.8 260.0 260.0 Olticica Value 2.2 3.0 5.2 2.8 4,.3 3.7 3.5 1.8 1.9 3.3 3.3 Volume 9.1 11.8 19.0 6.3 12.5 9.5 9.8 5.8 10.5 13.0 13.0 Undt Value 21,6.8 252.2 273.6 1,5o.5 31,1.8 389.6 357.0 316.3 179.2 250.0 250.0

Twig Value *0.1 0.1 1.1 0.2 0.5 0.2 - 0.7 0.6 0.6 Volume - 1.2 0.2 1.6 0.1, 1.1 0.7 - 1.9 2.0 . Unit Value * 88.9 658.1 605.1 1,76.5 1,80.1 292.1,4 357.1, 320.0 320.0

Groundnut Value - *0.1 1.8 --- 1.8 -- Volume - - 0.2 8.1 -4 7.8 -- Unit Value- - 216.2 210.2 -- 230.3 ---

Other Vegetable Oils Value 0.2 0.6 0.1, 1.1 0.5 0.6 0.1, 0.9 0.1 Volume 1.2 2.5 1.5 5.2 1.5 1.8 0.1, 4 3.6 0.5- unit value 181.6 21,8.0 238.1, 215.8 291.1 31,6.4,~ 1,200.0 W 17.2 269.2

Veg =be seedsValue - 6.9 8.14 3.1 -7.3 13.0 29.2 6.3 44,.1 61.2 Voltme - 73.3 96.8 33.1,4 75.3 121.2 301,.5 65.9 1a61.0 61,2.0 unit Value - 93.8 86.6 92.9 97.5 107.5 96.0 95.5 95.0 950

Groundinuts Value - 0.9 4,.1 2.5 .. 1.1 3.1, 3.6 2.3- Volume - 4,.6 21.9 1J,.9 01 18.1, 13.7 15.6 10.0-- Unit Value 199.7 185.1 167.6 18h,.5 222.1, 250.7 229.5 228.1,4

Sesame Value -0.2 0.7 0.2 - . 1.0 .. 0.2 0.2 Volume - 0.9 3.6 0.8 - 4...1.1 0.2 1.0 1.0 Unit Value - 176.9 185.5 186.6 - .. 229.7 24,2.1, 230.0 230.0 Other Oi.eeede Value 0.2 0.8 2 2.11 3.0 ~/ 0.3 1.0 0.3 0.2 0.1 0.9 0.9 Volume 0.4, 5.0 16.5 7/ 24,8 0.14 6.6 1.14 0.5 0.3 1.0 1.0 Unit Value 583.3 34~9.4, 111.o 121.6 11 6341, 14,9.4 213.2 510.6 538.5 880.0 880.0 Table 16-23: (Continued)

1960 1961 1962 1963 1964 1965 1966 1967 1968 1975 1980

Oilseed Cake and Meal Soybean Value _- - 4.1 4.o 7.7 14.6 10.2 18.9 42.8 60.8 Volume - - - 62.0 43.8 105.1 184.9 125.4 234.5 460.0 640.0 Unit Value - - - 66.7 91.8 73.1 78.9 81.5 80.7 93.0 95.0

Groundnut Value 3.0 6.7 5.1 6.9 1.8 8.6 11.7 11.6 7.9 11.8 12.7 Volume 53.8 132.9 83.7 107.8 28.0 121.8 154.6 148.4 102.8 148.0 155.0 Unit Value 56.5- 59.1 60.5 63.6 65.4 70;9 75.6 78.5 76.8 8O0.0 82.0

Cottonseed Value 1.3 1.4 0.2 1.9 1.0 0.3 1.6 1.6 b.S 4.1 4.1 Volume 30.4 33.0 4.5 33.;4 25:6 0;9 26;0 27.4 78.3 70.0 70.0 Unmt Value 42,9 41.2 38.2 55.9 37.1 27.8 61WT 57.0 57.8 58.0 58.0 Babacu Value 0.2 o.4 0.9 1.0 1.1 1.8 2:i i.8 1h9 2.2 2.5 Volume 3.4 11.2 19.7 16.2 32.5 32.0 36.3 35.7 32.9 40.o 4,5.0 Unit Valne 42.3 38.5 46.2 59.4 43.2 55.0 66.9 49.4 56.1 55.0 55.0

Liaeed Value 0.1 0.2 0.1 o.6 0.2 0.4 0.4 0.5 0.1 0.8 0.8 Volume 1.5 3.1 1.7 9.7 2.6 6.1 5.3 5.9 1.5 110 11.0 Unit Valae 75.5 52.8 55.8 66.3 65.6 65.2 73.4 82.2 79.6 75.0 75.0 meat feef, Frozen Value 3.2 j:o0 4.8 4.3 11.0 20.2 9.9 3.8 13.4 10.8 16.7 Volume 5.9 14.4 11.4 10.0 18.1 29.8 15.4 6.4 26.0 18.0 27.0 Unit Value 535.0 489.0 421.6 431.9 607.2 679.6 643.5 589.6 515.5 600.0 620.0

Beef, Chilled Value 0.1 .. 0.4 0.9 0.1 0.7 0.5 0.2 1.1 0.6 1.2 Volume 0.1 0.1 1.1 2.2 0.2 0.9 0.8 0.3 2.0 1.0 2.0 Unit Value 500.0 418.4 376.1 381.3 566.8 822.2 563.2 619.2 527.2 600.0 620.0

Beef, Canned Value 6.5 11.7 6.9 4.0 5.4 12.4 8.1 5.7 12.6 9.5 14.8 Volume 8.1 13.4 8.9 5.8 7.4 16.8 10.5 6.5 14.5 11.0 17.0 Unit Value 799.2 876.4 771.7 685.5 728.1 734.8 767.2 869.6 868.7 865.0 870.0

Veal, Eresh, adlled or Value _ 0.1 0.2 0.2 0.5 3.4 2.6 2.8 5.7 3.0 4.8 Frozen Volume - 0.2 0.4 0.4 0.7 5.2 4.6 4.9 11.2 5.0 8.0 Unit Value _ 512.8 537.7 489.1 659.4 657.3 560.5 566.6 508.3 590.0 m600. Horse Meat Value - - .. .. 0.7 0.9 1.7 2.9 4.9 8.1 9.2 Volume - - .. .. 2.2 3.5 5.4 8.1 12.6 18.0 20.0 Unit Value _ _ 222.2 280.0 319.2 249.2 317.1 361.6 390.0 150.0 460.0

Beef and^Veal, Dried, Salted Value .. 0.5 2.0 0.6 0.3 0.9 2.1 1.5 6.5 2.6 5.3 and Smoked Volume .. 0.5 1.8 0.5 0.2 0.7 1.7 1.3 5.1 2.0 4.0 Unit Value .. 982.1 1,122.4 1,154.3 1,135.1 1,230.7 1,241.1 1,148.3 1,279.6 1,323.0 1,330.0

Extracts and .tdces of Neat Value 1.8 2.3 1.7 1.5 3.6 6.6 3.9 1.1 2.0 4.0 6.2 Volume 0.3 0.5 0.4 0.3 0.3 0.7 o.6 0.3 0.6 1.0 1.5 Unit Value 5,105.3 4,903.9 4,862.4 5,402.2 11,603.8 10,166.9 6,860.7 4,155.9 3,546.2 4,000.0 4,110.0

Animal Offals Value 1.3 1.7 1.9 1.3 1.6 2.7 2.7 2.0 2.3 1.5 2.0 Volume 2.1 2.8 4.1 1.8 2.8 6.6 5.4 2.6 3.7 2.5 3.5 Unit Value 619.0 607.1 463.4 722.2 571.4 409.1 500.0 769.2 62L6 580.0 580.0 Table 16-23: (Continued)

1960 1961 1962 1963 19611 1965 1966 1967 1968 1-75 3

Valua ~~~~~6.16.0 41.7 6.2 3.7 ?.11 3.8 3.5 3.1 6.0 8.3

;-, 1,.me 120.2 120.4 1u.116 153.5 103.7 170.0 811.8 96.1 77.5 150.0 20. U.-atValue 50.7 119.9 412.0 410.2 35.8 413.5 11113 35.9 140.0 410.0 410.0

Crar;' Juice Vaple - -0.1 2.2 1.41 1.9 41.7 6.7 11.6 19.0 25.0 Volizi,e - - 0.2 5.3 3.8 5.8 13.9 18.6 30.1 50.0 73.0 Unit Value - 357.14 1407.8 375.7 327.1 3110.1 358.9 386.5 375.0 360.0 6 Baar.ana Value Li. 3.8 3.2 2.9 5.8 6.3 6.3 5.5 5.6 7.0 7.0 Volaz,e 266.1 270.5 238.0 226.5 2148.1 237.3 225.3 188.0 176.1 200.0 200.0 Unit Value 17.1 141.0 13.6 12.9 23.5 26.41 27.9 29.5 31.9 35.0 35.0 ~~.iedorVa~~~ue Baited 6.0 3.0 1.41 1.3 2.7 5.41 1.7 3.6 2.6 3.8 14.5 Vo"1'e 19.5 8.0 41.2 41.3 13.7 31.3 114.2 114.2 M.431.080 Unit Value 308.3 372.6 330.7 290.2 193.7 171.6 328.1 252.9 182.I4 250.0 250.0

Cat-,leand Calftkine, Tanned Value 0.3 0.2 0.1 . 0.2 3.1 41.2 3.5 2.3 2.8 2.8 cr rrepared Vol,ree 0.1 0.1 .. . .1 2.2 2.11 2.6 1.7 2.5 2.5 Unait Value 3,011.5 3,618.2 3,366.7 2,210.5 2,505.51 1368.6 1,790.2 1,3641.3 1,298.3 1,103.0 1, 103.-0

Goat 5kins, fried Valuie 3.0 3.5 2.5 2.5 2.2 3.7 5.5 3.9 3.8 2.0 2.0 Volw.ee 1.6 1.9 1.6 2.0 1.5 2.1 2.6 2.1 2.1 1.0 1.0 U.i t.Value 1,781.2 1,832.3 1,592.5 1,292.6 1,4198.0 1,738.7 2,265.6 1,867.6 1,823.7 2,000.0 2,030.0

Sheep Skins, 1fried 7ai'i'. 1.6 2.2 2.5 1.9 2.6 11.0 5.2 14.2 3.8 41.5 41.5 Volrz'e 1.7 1.8 1.9 1.8 2.1 3.2 3.7 . 2.9 2.6 3.0 3.0 Unirt Value 970.5 1,228.9 1,333.2 1,085.5 1,287.6 1,2410.8 1,388.5 1,1465.5 1,453.0 1,500.0 1,50.00 niLis and Skins Other Than Value 1.8 2.2 2.0 1.9 2.7 41.6 41.3 5.0 6.5 6.8 6.8 _rfInished Cattle VuluiLe 1.1 1.11 1.2 1.3 1.2 1.3 1.41 1.5 1.14 1.5 1.5 Uni,t Value 1,7141.0 1,592.3 1,591.2 1,389.11 2,210.3 3,5811.2 3,166.11 3,1425.0 14,501.0 1a,500.0 14,500.0

Tol-~~~~co ~Value 18.6 26.6 23.6 214.1 28.3 26.2 21.9 20.3 18.9 27.0 29.41 volume 31.3 418.2 411.1 413.9 59.8 55.0 115.6 144.9 38.5 55.0 60.0 U-ut Value 591i.2 552.1 5714.7 5149.2 1473.1 4176.5 1479.7 451.7 1489.8 1490.0 L&90.0

Brazil flute Value 111.3 15.6 9.9 8.9 10.1 11.6 35.1 10.1 35.0 15.0 15.0 Volume 26.41 36.3 23.0 25.2 214.2 19.9 30.3 20.0 36.2 30.0 30.0 Urat Valsm 5411.3 4130.9 1430.3 352.5 1130.9 582.11 497.14 507.0 1413.8 500.0 500.0 Cash-eWHuts Value 0.41 0.3 0.14 0.8 0.9 0.7 1.8 1.14 3.14 14.5 7.0 Volu.-e 0.7 O.ii 0.6 1.1 1.1 0.7 1.8 1.5 3.3 5.0 8.0 Unit Jalue 619.0 713.2 652.5 732.7 779.3 1,0014.2 978.8 909.5 1,010.5 900.0 900.0

Cashew Oil Value - - - - - 0.3 0.3 0.5 0.8 1.3 Volume - - - 1.6 1.6 3.7 6.0 10.0 Unit Value- - - - - 216.7 168.3 130.2 10. 0 130.0

Ccztton Value 41.0 1.6 1.1 1.7 3.3 8. 03 45 1112.0 32.5 Vol-ine ~ 2.2 0.7 0.5 1.5 3.3 8.2 9.2 3.9 2.9150 2. Unit, Value 1,826.9 2,279.6 2,015.3 1,136.5 9811.6 1,000.2 1,1211.2 1,1145.8 1,4137.6 1,350.0 1,30.00

Jute Value . 0.1 0.3 3.0 41.2 2.1 3.3 7.2 9.0 i0.6 Volume . .. 0.3 0.5 5.3 7.1 3.1 6.7 15.2 20.0 25.0 Unit Value . . 503.8 600.14 5514.3 5914.9 668.3 1493.0 1474.1 450.0 1125.0

Sisal Value .. 0.2 0.6 1.2 0.6 1.0 1.7 1.8 1.6 3.3 4.14 Volume o..6 2.1 3.9 1.5 3.3 6.14 7.5 7.8 15.0 20.0 Unit Value . 333.3 277.5 313.7 1121.9 293.8 256.41 2142.14 202.6 220.0 220.0 Table 16-23: (Continued)

1960 1961 1962 1963 1964 1965 1966 1967 1968 1975 1980

Carrauba Wax Value 17.8 14.1 10.0 10.2 10.2 10.8 9.7 7.5 9.2 10.0 10.0 Volume 11.1 10.4 9.5 11.3 11.1 12.1 13.6 10.9 13-3 15.0 15.0 Unit Value 1,604.9 1,359.5 1,051.2 901.1 923.8 892.2 716.5 689.2 690.5 660o. 660.0

Fisih Lobster Value 1.8 2.9 4.0 3.5 2.6 3.6 3.8 2.8 5.5 7.4 8.3 Volume 1.2 1.7 2.1 1.8 1.6 1.2 1.1 1.0 1.7 2.0 2.0 U.nt Valne 1,518.4 1,644.5 1,951.2 1,980.3 1,664.8 3,031.4 3,427.4 2,843.9 3,260.2 3,716.9 4,141.9

Shrimp Value 0.1 . - 02 0.9 0.5 1.2 3.5 4.0 4.4 valms . 0.1 .. .. 0.2 0.6 0.0 0.5 L.6 3.6 L6 Unit Valu.e 1,450.0 .. .. 1,571.0 1,614.0 ,129. 1,301.) t3,26.6 2,478.8 2,163.7

Tea and Mate Tea Value 0.6 0.9 1.0 0.9 1.3 1.7 2.0 2.2 2.3 2.3 2.7 Vol'e 0.8 1.2 1.4 1.3 1.8 2.1 2.5 3.0 3.0 3.4 4.0 Unit Value 766.9 780.6 666.o 691.6 750.4 809.7 816.3 726.4 749.9 680.o 68o.o

Mate Processed Value 4.1 4.0 4.1 4.1 4.2 3.8 5.0 3.9 3.7 3.2 3.2 Volume 22.6 23.6 23.8 23.1 23.0 19.6 23.8 18.5 18.1 18.0 18.0 Unit Value 180.1 170.9 173.3 177.5 186.1 192.0 208.9 211.2 203.2 175.0 175.0

Mate Semi-Processed Value 4.9 5.5 3.4 3.6 3.5 3.2 1.9 1.1 1.2 1.0 1.0 Voluae 33,5 37.4 23.8 25.4 25.4 22.2 11.7 5.8 7.2 7.0 7.0 Un:t Value 146.5 146.0 141.1 140.7 139.2 143.6 164.1 186.0 170.7 145.0 145.0

Pepp3er ralue 2.5 2.9 2.2 1.8 3.0 6.o 5-4 6.2 5.6 7.7 8.4 Vollune 1.9 2.9 2.8 2.3 4.0 7.4 6.4 9.7 9.7 11.0 12.0 Urnt Value 1,303.3 991.1 802.6 791.0 751,1 815.0 847.8 640.0 574.3 700.0 700.0

Total Products Listed Value 1,104.9 1,205.8 1,048.0 1,232.5 1,2258.4 1,300.9 1,463.9 1,340.6 1,580.9 1,920.6 2,086.2

Other Agricultural Exports Value 29.3 27.2 25.0 30.5 33.2 48.3 47.3 43.2 34.2 50.0 60.0

Total Agricultural Exports 8W Value 1,134.2 1,233.0 1,073.0 1,263.0 1,261.6 1,349.2 1,511.2 1,383.8 i,6i4.9 1,970.6 2,144.2

Brazil's Total Exports Value 1,268.9 1,402.7 1,214.3 1,406.4 1,429.8 1,595.5 1,741.6 1,654.0 1,881.3

Products Listed as Percent of 97.4 97.8 97.7 97.6 97.4 96.4 96.9 96.9 97.9 97.5 97.2 Agricultural Exports

Agricultural Exports as 89.4 87.9 88.4 89.8 88.2 84.6 86.8 83.7 85.8 Percent of Total Exports

Notes: .. Yes: than 5 metric tons or 5 thousand US$. Brazil's agricultural exports include: live anmals; primary materials, in the rough 1/ Thousand bags. end prepared of animal origin and of vegetable origin; textiles; oils, fats, greases 2/ US$/bag. and their derivatives of animal and vegeteble origin; foodstuffe and beverages; Green Equivalent, Thouand bags. manufactures of rubber, ebonite, and such; mamnufctures of wood and cork; paper and tExlusive of Pine. articles of paper; textile prodicts; easertial oils of vegetable or resinoid origin. Animal feed. 6/ High Unit Value due to Copaiba Oil. MainlyM/ Babacu Seed.

Souree: IC , Anuario Estatietico do Brasil and Eetatiatica do Comercio Exterior do Brasil varioue issues.

Table 16-24

SO(u Y OF SBRAIL9 EXRPORTS OF A658CULTMRAL PRODUCTS BY MAIN COMMDITY GROUPINKGS, 1960 - 1968 (minlion US$)

1960 1961 1962 1963 1964 1965 1966 1967 1968

Major Agricultural Products: Coffee 712.7 710.4 6L2.7 748.5 759.9 707.4 773.5 733.0 797.3 Cotton & Other Fibers 71.8 138.6 141.2 158.4 174.7 1)1.5 165.0 136.0 170.5 Sugar 57.8 65.6 39.5 72.9 33.1 56.7 80.5 84.2 106.3 Forest Products 47.6 52.1 43.8 37.7 60.8 74.4 79.7 72.3 98.2 Cereals 0.4 13.4 4.8 30.8 4.8 5h.4 68.6 28.4 81.8 Cocoa 98.6 62.3 41.6 51.4 46.5 41.4 72.2 85.4 73.3 Vegetable Oils 12.2 28.0 21.2 24.8 29.3 35.2 28.3 29.2 42.5 Vegetable Oilseeds 0.2 8.7 15.4 8.7 0.3 12.4 16.8 34.0 8.8* Vegetable Oilseed 7.6 11.0 9.7 15.1 8.o 19.0 31.3 25.9 33.9 Cake & Meal Meat 15.2 25.4 19.5 13.7 24.7 49.5 34.7 20.8 49.5* Fruit 11.8 11.2 9.1 12.0 12.7 18.5 17.6 17.8 29.7 Rides & Skins 14.3 12.6 10.2 9.0 11.7 23.9 30.3 25.6 23.3 Tobacco 18.7 26.8 23.8 24.2 28.5 26.4 22.3 20.5 18.9 Nuts 14.7 15.9 10.3 9.7 11.3 12.3 16.8 11.5 11.6* Textiles 4.6 2.1 2.0 3.6 7.3 14.2 1U.8 10.3 13.8 Carnauba Wax 17.8 l.1 10.0 10.2 10.2 10.8 9.7 7.5 9.2* Fish 1.8 3.0 4.0 3.5 2.9 4.8 5.2 5.1 10.2 Tea & Mate 9.6 10.4 8.5 8.6 9.1 B.6 8.9 7.2 7.2 Pepper 23 2.9 2.2 1.8 3.0 6.0 5. 6.2 5.6 Total Major 1119.9 12T314 10-1 5 124M.6 123.8 13817.4 1481.6 1360.9 1591.6 Agric. Prod. Other Agricultural Products Not Covered Abovet Live Animals 0.1 0.2 0.2 0.2 0.5 1.4 0.7 1.1 1.2 Bones, Antilers, 0.4 0.5 0.6 0.5 0.5 0.7 1.2 1.3 0.9 Hoots, etc. Vegetables 5.5 5.1 3.3 2.5 6.6 9.6 9.7 6.5 6.3 Other Waxes i/ 1.3 1.3 1.0 1.0 o.6 0.7 0.3 0.3 0.2 Beverages 0.2 0.1 *- 0.1 0.5 0.2 0.3 0.7 0.8 Rubber 3.0 5.6 3.2 2.1 4.7 7.4 7.8 6.1 3.5 Manufactures of Natu- .. .. 0.3 0.4 5.4 3.5 1.6 0.8 0.6 ral Rubber & Ebony Manufactures of Wbod 0.5 0.4 0.7 0.7 0.7 0.7 0.9 0.8 1.h and Cork Rzper & Articles Made ...... 0.1 0.2 0.2 of Paper 0.1 Essences of Vegetable 2.5 3.5 2.2 3.4 2.9 3.2 4.6 5.1 Origin 6.o Other Agric.Prod.n.e.s. 0.8 1.8 7.% 0.4 4.3 3 2.4 Total Other Agric. TZ. 183'5 11. I8:1 RT_I78 Products 22.9 M Total Agric. Exports 1134.2 1233.0 1073.0 1263.0 1261.6 1349.2 1511.2 1383.8 1615.0 * In many cases, the commodity definition is broader than in(subwquent)table 16-23 (shoving commodity exports by particular type) / Wax of abelhas, ouricuri, licuri, or uricuri. Source: IBOE, Anuario Estatistico do Brasil, various issues.

Table 16-25s Projected GroWth inx Agrlcultural ExpoQtt of BXBail

Ya-lue of pots- Annual Rates of Growth 1960-62 1966-68 1975 1960-62 1966-68 to to to Ave. Ave. 1975 1980 1966-68 1975 1980

Million U.S. dollars Percent

Ten Major Products

Coffee 689 768 966 940 1.8 2.9 0.5 Cotton 89 111 140 145 3.7 3.0 0.7 Sugar 52 88 128 141 9.2 4.8 2.0 Forest Products 48 83 107 151 9.5 3.2 7.2 Cereals 6 59 96 115 46.5 6.3 3.7 Cocoa 68 77 84 89 2.1 1.1 1.2 Vegetable Oils 20 33 49 50 8.7 5.0 - Vegetable Oilseeds 8 20 45 62 16.5 10.7 6.6 Oilseed Cake and Meal 7 30 62 82 27.5 9.5' 5.8 Meat 20 35 40 60 9.8 1.7 8.5

Four Cases of Rapid Growth a!

Orange Juice * 8 19 25 * 12.0 5.7 Cashew Nuts * 2 5 7 * 9.3 9.2 Cotton Textiles 2 6 20 33 19.2 15.5 10.2 Jute Textiles * 4 9 11 * 10.2 3.3

Four Cases of Slow or Negative Growth a/

Sisal 24 19 16 14 -4.0 -2.5 -1.5 Bananas 4 6 7 7 6.8 1.7 b/ 0 Carnaba Wax 14 9 10 10 -7.5 1.6 0 Tea and Mate 10 8 6 7 -3.2 -2.0 1.2

Agricultural Exports Excluding Coffee 458 735 1,004 1,210 8.2 4.0 3.8 Total Agricultural Exports 1,147 1,503 1,970 2,150 4.6 3.5 1.8 Non-Agricultural Exports 148 256 (550) (885) 9.5 (10.0) (10.0) Brazilts Total Exports 1,295 1,759 2,520 3,035 5.2 4.6 3.8

Agriculture as % of Total 88,6 85,4 78.2 70.8

* Less than $500,000 in base year; statistical growth rate is artificially high. a/ Growth rates computed before rounding, b/ Based on volume.

Source: Compiled from Table 16-23.

Table 16-26: BRAZIL - PRODUCTION, AREA AND YIELD OF PRINCIPAL AkRICULTURAL PRODUCTS (Product:on in 1,000 metric tons, Area in 1,000 hectares and Yield in kilogram per hectare unless otherwise stated)

l960 1961 1962 1963 1964 1965 1966 1967 1968

Coffee Production (1,000 bags of 60 kg.) 2,984.8 35,860 28,703 23,153 18,063 37,672 17,505 23,374 16,842 Area 1/ 4,419.5 4,691.7 4,420.3 4,081.8 3,845.9 3,511.1 3,057.5 2,791.7 Yield (bags of 60 kg./ha.) 6.67 2,622.9 7.64 6.49 5.67 4.70 10.73 5.73 8.37 6.42 Cotton (seed) Productiori 1,609.3 i,828.5 1,902.3 1,956.9 1,770.3 1,986.3 1,865.4 1,692.1 1,999.5 Area l/ 2,930.4 3,233.8 3,456.9 3,553.7 3,764.6 4,004.4 3,897.7 3,719.8 3,902.2 Yield - 549 565 550 551 470 496 479 45551 Wool Production 22.7 24.6 25.2 26.5 28.1 29.1 27.9 28.3 30.7 Jute Production 38.9 48.2 47.5 44.1 51.2 61.6 44.5 40.3 51.2 Area 28.0 35.6 40.7 36.1 41.8 47.3 33.7 43.2 48.4 Yield 1,389 1,353 1,167 1,222 1,226 1,303 1,320 934 1,057 Other Fibers Production 30.5 34.3 34.9 34.7 34.2 37.2 41.4 36.8 Sugar cane Production 56,926.9 59,377.4 62,534.5 63,722.9 66,399.0 75,852.9 75,787.5 7j,o86.5 76,610.5 Area 1/ 1,339.9 1,366.6 1,466.6 1,509.0 1,519.5 1,705.1 1,635.5 1,680.8 1,686.7 Yield 42,485 43,448 42,639 42,228 43,698 44,486 46,339 45,864 45,420 Wood (1,000 m3) Production 102,841 107,256 112,932 123,599 129,607 135,265 130,685 135,733 Corn Production 8,672.0 9,036.2 9,587-3 10,418.3 9,408.0 12,111.9 11,371.5 12,824.5 12,813.6 Area I/ 6,681.2 6,885.7 7,347.9 7,957.6 8,105.9 8,771.3 8,703.2 9,274.3 9,584.4 Yield 1,298 1,312 1,305 1,309 1,161 1,381 1,397 1,383 1,337 Rice (Paddy) Production 4,794.8 5,392.5 5,556.8 5,740.1 6,344.9 7,579.6 5,801.8 6,792.0 6,652.4 Area 1/ 2,965.7 3,174.0 3,349.8 3,721.8 4,182.4 4,618.9 4,004.9 4,291.1 4,459.0 Yield 1,617 1,699 1,659 1,542 1,517 1,641 1,449 1,583 1,492 Wheat Production 713.1 544.9 705.6 392.4 643.0 585.4 614.7 629.3 856.2 Area 1/ 1,141.0 1,022.2 743.5 793.5 733.6 766.6 717.0 Yield- 830.9 970.1 625 533 949 494 877- 764 857 757 883 Manioc Production 2 17,613.2 18,058.4 19,843.4 22,248.6 24,355.6 24,992.6 24,710.0 27,268.2 29,203.2 Area 2! 1,342.4 1,381.3 1,476.2 l,617.8 1,715.9 1,750.0 1,779.8 1,914.4 Yield 1,998.2 13,121 13,073 13,442 13,752 14,194 14,282 13,884 14,243 14,615 Table 16-26 (Gontinued)

1960 1961 1962 1963 1964 1965 1966 1967 1968

Banana Production (million bunches) 256.3 271.5 300.7 313.1 338.2 348.5 355.9 402.8 421.9 Area (1,000 hectares) 1/ 184.5 193.8 208.7 231.3- 227.7 238.6 250.0 255.6 268.5 Yield (bunchesAhectareT 1,389 1,401 1,441 1,354 1,485 1,463 1,424 1,576 1,571

Mangoes Production 1,824 1,868.3 1,921.1 1,931 1,901 2,019 1,951 2,018 2,255 Area (1,000 hectares) 37.6 38.0 39.3 40.7 41.4 42,5 44.4 43.3 44.5 Yield (fruits/hectare) 4,854.7 49,168 48,904 47,407 45,905 47,472 43,908 46,589 48,391

Water melons Production (million fruits) 86.7 80.5 80.1 78.9 82.2 78.9 83.1 95.3 104.0 Area (1,000 hectares) 115.0 114.4 132.8 109.3 117.7 119.7 112.5 126.8 126.0 Yield (fruite/hectare) 755 703 710 722 699 660 739 751 826

Grapes Production 427.1 450.9 400.6 506.8 403.1 550.9 522.6 500.8 539.0 Area 61.3 64.9 69.6 70.6 67.6 69.0 67.2 64.5 72.6 Yield 696.6 695.1 576.0 718.2 584.8 798.6 7,772 7,762 7,429

Tomatoes Production 397.1 391.0 488.4 496.1 553.3 579.8 678.8 744.7 775.3 Area 28.9 29.3 34.7 36.2 38.5 39.6 38.8 41.3 44.2 Yield 1,374.7 13,332 14,059 13,706 14.4 14,625 17,518 18,024 '17,534

Onions Production 210.3 192.6 226.6 194.8 241.1 225.5 277.3 250.2 272.6 Area 41.2 40.9 43.4 40.9 47.4 46.7 50.5 48.4 51.1 Yield 5,100 4,713 5,225 4,672 5,085 4,825 5,494 5,174 5,336

Garlic Production 27.3 27.3 26.6 27.9 30.9 33.2 32.7 32.8 37.3 Area 11.4 11.7 11.8 12.3 13.2 14.1 13.3 13.6 14.5 Yield 2,395 - 2,332 2,260 2,263 2,340 2,354 2,464 2,407 2,567

Beans Production 1,730.8 1,744.6 1,709.0 1,942.4 1,950.7 2,289.8 2,148.0 2,547.6 2,419.7 Area / 2,560.3 2,580.6 2,716.3 2,982.4 3,130.6 3,272.5 3,324.6 3,650.6 3,663.3 Yield 676 676 629 651 623 700 646 698 661

Sweet Potatoes Production 1,283.1 1,355.7 1,447.8 1,546.3 1,597.8 1,721.4 1,912.6 2,225.7 2,120.5 Area 133.3 137.4 145.0 152.4 158.4 168.3 175.4 185.0 182.2 Yield 9,627 9,869 10,032 10,088 10,088 10,227 10,906 12,029 11,635

Potatoes Production 1,112.6 1,080.3 1,133.9 1,167.8 1,263.8 1,245.9 1,328.8 1,466.5 1,606.5 Area 1/ 198.8 191.3 196.2 200.0 208.7 202.3 199.3 217.4 226.7 Yield 5,598 5,649 5,779 5,845 6,056 6,160 - 6,667 6,745 7,085 Tahle 16-26: .(Continued)

1960 1961 1962 1963 1964 1965 1966 1967 1968

Hides Production: Cattles 170.2 170.6 168.5 169.1 180.6 188.7 180.2 188.9 Pig 5.8 6.8 6.8 5.8 6.3 5.8 6.8 6.6 Skins Productiont Sheep 1.9 2.1 2.4 2.5 2.7 3.1 3.1 2.6 Goat 1.4 1.4 1.5 1.5 1.6 1.6 1.6 1.9 Wild cat (1,000 skins) 116.9 121.3 119.4 124.3 132.0 168.5 151.2 136.7 Peccary (1,000 skins) 252.9 292.6 324.9 351.1 393.8 414.3 493.2 503.9 Lizard (1,000 skins) 94.4 137.2 162.4 163.0 528.5 566.o 444.8 757.9 Crocodile (1,000 skins) 803.4 860.4 1,003.6 948.9 1,182.9 1,275.2 1,302.6 1,284.4 Tobacco (leaf) Production 161.4 167.8 187.0 206.8 210.4 248.2 228.3 242.8 258.0 Area V 213.2 227.7 232.3 250.4 250.5 273.8 265.0 260.8 275.7 Yield 757 737 805 826 840 906 862 931 936 Olives Production 0.4 0.4 0.6 0.8 0.9 0.8 0.9 1.0 1.0 Area 0.4 0.4 0.5 0.5 0.5 0.6 0.7 0.8 0.8 Yield 1,024 1,047 1,283 1,451 1,556 1,476 1,305 1,324 1,299 Brazil Nut Production 39.4 51.7 45.4 40.4 44.2 40.8 55.5 34.2 Cashew Nuts Production (million fruits) 2,148 2,516 2,890 3,414 3,118 3,402 3,398 4,085 4,540 Area (1,000 hectares) 49.4 55.3 59.4 64.8 63.6 64.4 73.5 77.3 72.2 Yield (fruits/hectare) 43,459 45,452 48,625 52,653 49,047 52,826 46,245 52,856 62,897 Carnauba Wax Production 11.0 11.4 12.1 11.8 13.0 12.7 12.2 1.14 Crustacea Production 38.3 48.7 44.5 43.3 51.4 57.6 55.6 70.8 Pepper Production 4.1 4.7 3.8 6.5 6.5 8.9 9.9 10.3 14.1 Area 2.4 2.9 3.0 3.7 3.8 4.4 4.4 4.8 5.6 Yi eld 1,701 1,591 1,259 1,722 1,721 2,021 2,243 2,165 2,532 Tea Production 2.7 2.8 5.0 6.1 6.2 6.2 6.5 6.4 4.6 Area 4.1 4.1 4.2 4.3 4.3 4.3 4.4 4.4 4.5 Yield 657 681 1,201 1,1441 1,448 1,449 1,472 1,443 1,031 Mate (Erva) Production 110.7 131.7 136.0 125.1 127.8 123.3 122.8 106.5 Rubber Production 23.1 22.7 21.6 20.6 28.3 29.3 24.3 21.2 23.0

V Area aown up to 1965; area harvested afterwards.

Note.- Yield calculated from unrounded figures.

Source: Anuaric Estatistico do Brasil, 1963-69 issues. Table 16-26: (Continued)

1960 1961 1962 1963 1964 1965 1966 1967 1968

Alfalfa Production 227.1 213.8 210.2 189.0 203.3 195.6 198.3 175.9 168.6 Area 30.7 29.1 28.2 27.3 27.7 27.5 27.8 27.8 25.8 Yield 7,403 7,349 7,457 6,913 7,345 7,105 7,125 6,330 6,533

Cocoa Production 163.2 155.9 140.4 143.5 153.7 160.8 170.4 194.7 149.3 Area i/ 4,708 474.3 464.8 469.6 487.1 482.3 455.9 473.1 432.7 7ield 347 329 302 306 315 333 374 412 345

Castor seed Production 224.7 207.8 225.0 240.0 310.3 355.o 329.3 355.2 370.3 Area 254.5 283.4 284.2 307.2 347.6 394.1 347.1 360.6 377.0 Yield 883 733 792 781 893 901 949 985 982

Babawa Production 100.7 117.4 136.7 142.1 155.2 170.9 172.8 174.9

Citicica Production 37.9 62.7 51.7 50.8 53.3 52.3 38.3 40.6

Meat (carcass ueight) Production: Beef and Veal 1,359.2 1,369.1 1,356.0 1,360.9 1,437.2 1,496.8 1,452.3 1,505.5 Park 474.1 534.1 588.4 574.9 578.0 595.8 665.1 668.0 Sheep and Lab 22.1 24.8 26.7 27.3 29.8 33.8 33.9 30.7 Goat 17.0 17.6 18.8 19.9 20.6 21.1 21.7 21.1 Poultry 5.9 7.8 7.8 7.9 15.6 18.1 25.3 30.7 Edible Offals Q.9 53.1 54.0 49.5 52.4 60.8 59.6 64.0 Total Meat &9 2,2,320.0 207,213

Tung Production 8.3 10.1 10.7 11.9 11.9 12.5 18.6 20.4 16.9 Area 5.1 5.2 4.7 4.4 4.5 5.0 5.9 6.3 5.7 Yield 1,620 1,956 2,286 2,687 2,615 2,508 3,136 3,266 2,975

Groundnuts (unshelled) Production 408.4 584.4 647.8 603.8 469.7 742.7 894.9 750.7 753.9 Area 1/ 291.0 436.4 476.5 422.9 429.8 540.6 643.6 693.9 606.4 Yield 1,403 1,339 1,360 1,428 1,093 1,374 1,391 1,082 1,243

Soybea- Production 205.7 271.5 345.2 322.9 304.9 523.2 595.0 715.6 654.5 Area 171.4 240.9 313.6 339.8 359.6 431.8 490.7 612.1 721.9 Yield 1,200 1,127 1,101 950 848 1,212 1,213 1,169 907

Linseed Production 30.2 27.7 43.6 20.4 53.7 42.1 36.4 28.3 28.2 Area 42.7 46.1 55.4 55.9 67.4 69.8 57.9 44.2 44.6 Yield 707 602 788 364 797 604 630 641 633

Coconuts Production (million fruits) 436 418 429 494 503 529 691 824 691 Area (1,000 hectares- 73.6 76.8 78.8 83.0 84.0 87.7 100.9 108.7 114.4 Yield (fruits/hectare) 5,931 5,444 5,444 6,020 5,992 6,038 6,853 7,579 6,o3

Oranges Production (million fruits) 8,360 8,809 9,255 10,532 10,275 11,427 11,767 12,523 13,587 -Area (1,,OO hetares) 2/ 112.2 118.8 125.8 138.7 143.8 150.3 165.4 166.7 1/3.2 yield f ruits hectarLJ 74,421 74,180 73,552 75,916 71,455 76,o54 71,157 75,143 78,45C9 ANNEX 17

LIVESTOCK

Beef accounts for 42 percent of the value of total livestock production, milk 24 percent, pork about 18 percent, poultry and eggs 11 percent, wool 1.5 percent and mutton and goat meat together about 1 percent. The total livestock product is valued at some US$1.4 billion and comprises 8.5 percent of the GDP.

Brazil has the physical potential for a viable and productive livestock industry. The wide variety of ecological zones provide opportunities for developing most types of animal production. About 122 million hectares of land is presently under pasture, from which about 1.5 million tons of beef is marketed annually. In addition, there are vast areas of virgin lands which could be developed for cattle production. The national cattle herd was estimated by the Ministry of Agriculture to be 92.2 million head in 1968 but these figures may be overestimated. Dairy cattle numbers are also difficult to estimate as dairying is frequently interrelated with the beef enterprise. About 12 million cows are milked with about one third milking at any given time. I/

The livestock industry is inefficient, as indicated by the estimated cattle offtake of about 10 percent. This means that for every ton of beef produced, 50 animals must be fed and maintained, compared with around 12-14 in the more advanced countries. The problems involved in improving efficiency are complex, but can be solved with the application of known technology and sufficient economic incentives.

Beef supplies per capita are steadily declining and prices have increased while pig and poultry prices have recently declined. To what extent this will continue in the future is unclear. Pork already provides about 25 percent of the total meat consumed. Export policy is relevant in this connection. Traditionally beef exports have taken about 2 percent of national beef production and about 1-1/2 percent of total export receipts. (Hides, skins and wool provide a further 2-1/2 percent of total export receipts.)

Regional Aspects of Livestock Production

The main ecological zones of Brazil are shown in Map 4, and discussed in the main report (Volume I). The met tropical region comprises some 300 million hectares of tropical rainforest largely within the Amazon basin and along the eastern coastal strip. The 1.5 million cattle in the basin are located primarily in the State of Para. Here buffalo are important. Cattle production is based on natural pasture formed after a "slash and

1/ Estimated by Mr. Fidelis Neto, Director, Dairy Section, Cattle Breeders Association. ANNEX 17 Page 2 burn" cultivation for rice. Cattle must be moved from low-lying areas during the wet season. Problems of land clearing, annual flooding, transport and communications retard cattle development in the Amazon.

The forest area of the eastern coastal strip is small and its animal output of limited significance (see Volume IV which deals with North- east Brazil).

The woodland savanna region consists of 200 million hectares of shrub forest cover on well drained but acid soils. The cattle population is about 20 million. Current practice is to clear the forest for planting of rice or maize. The crops are cultivated by hand for three years to control weed growth before establishing Jaragua grass (Hyperhenia rufa). Soil fertility is rapidly depleted by crop cultivation and during severe dry seasons the pastures are invariably low producing and are quickly invaded by secondary growth. The acid cerrado soils are deficient in phosphorous and sulphur. There are indications that with fertilizati6n, productive legume-based pastures could be established. It is also likely that the need for cultivating these soils following forest clearing could te dispensed with if the pastures were intensively grazed.

The dry tropical areas in northeast Brazil comprise some 800,000 hectares of semi-arid land and currently has about 10 million cattle. The area around the waterpoints are heavily grazed and further development depends on additional waterpoints. The region is described in detail in the report on the Northeast (Volume IV).

Warm humid temperate conditions are found in a rather heterogeneous zone of some 50 million hectares extending northward from the temperate araucaria pine forests of Parana to the tropical areas of the Northeast. The zone has rainfall of 1,000-2,000 mm, a short but pronounced dry season, and good soils.

The pastures are mainly guinea, jaragua, molasses and pangola grasses with a negligible legume component. They can still be greatly improved, even though their carrying capacity is already high by Brazilian standards. Tropical pasture legumes, phosphatic fertilizers, and better pasture management with more fencing could raise the productivity of these pastures several-fold.

This region contains about 25 million head of cattle, the densest cattle population in Brazil. It is also the area of most intensive farming, both with livestock and crops.

The natural grasslands are In three main areas: (1) in the extreme north in Roraima, savannah grasslands of poor. quality cover some 1 million hectares. The immediate potential for livestock in this area is limited partly because of remoteness from markets; (2) The Pantanal zone, ANNEX 17 Page 3

located in the western part of Mato Grosso, comprises 18 million hectares of low-lying land. The vegetation of these flood plain areas is a grassland association of Andropogons, Paspalums, Digitarias and Echnincloa species and covers some 12 million hectares. The remaining 6 million hectares of higher land in the Pantanal is covered with light forest. Some 3 million head of cattle are reputed to graze over the flood plains. Properties are large and cattle are ranched on an extensive basis. The zone is capable of considerable development; (3) Rio Grande do Sul, with a temperate climate and about 16 million hectares of natural grassland. The quality of natural pastures is poor in the coastal area and north central depression, variable in the northeast and good in the areas bordering Paraguay and Argentina. Deficiencies in winter pasture are the main problem. These could be overcome by new species, better fertility control, fencing and management practices. The area has about 10 million cattle, 10 million sheep and 6 million pigs, all of temperate breeds. Stocking rates vary from 2-4 hectares per head of cattle in the poorer areas to about 1.5 in the better areas.- Dairy farming is restricted to two main zones, one near Porto Alegre, the other to the northeast of the state. Ecological conditions indicate a substantial comparative advantage for milk production and the state might readily become the source of manufactured dairy products for the tropical zones.

In these different zones, the cattle enterprise evolved at different rates, both in numbers and apparent productivity, during the past decade or so. The differences affect the results to be expected from various measures to promote cattle production. For example, the 10 million head of cattle in Rio Grande do Sul are concentrated largely in the south central part, and have been maintained with little change in numbers on a declining area of pastureland. Cropland increased at the expense of pastureland in the State as a whole. The competition of crops with cattle centered mostly in the central depression and northern parts of the State, where the margin of advantage for cattle was less than in the main cattle area. This State has no significant resources of land not presently being used for agriculture. Improved production efficiency -- better use of land presently devoted to cattle -- offers the principal means of expanding output and curbing further displacement of cattle by crop enterprises.

The warm humid area is somewhat diverse as to the degree of occupa- tion and balance among enterprises. Most of the cattle in the region are in Sao Paulo and Minas Gerais. Numbers of cattle and area in pastures have increased in both States, concurrently with moderate increases in crops. Forestland declined in both States. Any substantial further increase in either cropland or pastures would be at the expense of the other. In Sao Paulo the ratio of crop to pastureland in 1960 was about 1:2, in Minas Gerais, about 1:7. Both were roughly unchanged from a decade earlier, indicating little shift in comparative advantage between cattle and crops. Since cattle and crop production areas overlap more broadly here than in Rio Grande do Sul, it would appear that a generalized increase in cattle productivity might induce significant shifting of land from crop to cattle production. ANNEX 17 Page 4

In the woodland savannah - largely Mato Grosso (less than Pantanal) and Goias, plus parts of Sao Paulo and Minas Gerais - pastureland predominates in the use of farmland. Although crop area doubled, or more, between 1950 and 1960, the ratio of crop to pastureland in 1960 was still 1:19 to Goias and 1:60 in Mato Grosso. Altogether only about one- third of the land in these States was in farms in 1960. This region offers a vast potential for increasing cattle output by bringing new land into production without competing significantly with crops.

Animal Health

The most important cattle diseases include foot and mouth disease ,(FMD), brucellosis, paralytic rabies and tick born fevers. A program to ,control foot and mouth disease initiated in Rio Grande do Sul in 1965 has ,progressed to include over 80 percent of the cattle in 1969. A similar ,program is in various stages of development in other southeastern states. The Ministry of Agriculture has negotiated a loan frMpm the Inter-American Development Bank for expansion of the vaccination program. Many farmers in areas outside the official FMD control projects also vaccinate regularly. Some research is carried out by the FMD center near Rio. This same group provides a virus identification and vaccine quality control service and 'field advice on the control of outbreaks. Vaccine is produced by private ,fompanies; volume and quality of vaccine production appear adequate.

The extent of infection of brucellosis,and other veneral diseases .is unknown. Control is spasmodic and largely based qn test and slaughter. There are indications that the major cause of low reproduction ,rates is >nutritional rather than pathological.

Ticks are controlled in areas of severe i,nf£estation by dipping. 'Paralytic rabies is controlled by annual vaccination.

Federal veterinarians provide meat inspection services at the 'major slaughter plants. Inspection certificates for brucellosis and .tuberculosis are required for interstate live animal,shipments.

There are eight veterinary schools in Brazil with a total of about 1,000 students, producing about 150 graduates annually. The number of professional veterinarians is small in relation to the size of the livestock "industry, and veterinary policy must aim therefore at preventive medicine.

,MarketinR

Marketing of cattle involves movement over long distances, making transportation a key consideration. The major movement routes are shown in the report on the Northeast (Volume IV). Many of the breeding areas are still without roads, and cattle must be driven to highway,loading points. Substantial progress has been made in recent years in improving roads and construction for new areas. This is;resulting in increased trucking of livestock, and changes in marketing patterns. ANNEX 17 Page 5

There appears to be a trend to develop slaughter-plants closer to the production areas. For example, inland slaughter-plants have been established at Campo Grande and Goiana from which carcass meat is being railed to Sao Paulo.-

Cattle are usually sold direct for slaughter rather than through livestock fairs and markets, with exceptions in the Northeast. Official grading systems for livestock and meat do not exist. Many slaughter-plants, however, do increase unit weight prices for heavier and fatter cattle, based on higher dressed weights.

Progress is being made in livestock market practices, but there is a need for investment in modernizing slaughter-plants, in improving livestock and meat transport, processing and storage facilities and in mechanized dock handling. Consideration should be given to creating official grades for beef and pork to enable price incentives to producers for livestock improvement. Direct price controls on meat were abolished in 1965 but the Government continued to regulate export and domestic markets. Export taxes of 20 percent to 30 percent existed on beef, and market prices were set for both live cattle and meat. These controls aroused the strong opposition of cattle farmers. In 1967, when an IBRD loan for livestock development was negotiated, the Government pledged it would remove all remaining price and export controls on livestock products. This pledge has now been fulfilled.

Cattle prices throughout the last 15 years have been erratic but their trend has been upward. Although cattle prices started very low owing to intense price control 15 years ago, they have increased to a somewhat greater degree than the price of general industrial products and the cost of living. The high income elasticity of demand for beef and other factors suggest that this trend may continue.

Taxation and Fiscal Incentives

The total direct tax paid recently by the livestock producer amounts to some 20 percent of the value of his gross product. There are four main taxes and several minor ones (see Annex 4). The most important tax is the ICM, which is levied at a rate of 17 or 18 percent on either the full value or a nominal value (depending on the state) at the first sale of each animal and then on the value added in any subsequent transaction - provided adequate receipts for first sale tax payments can be produced. Otherwise, the tax on full sale value is again charged. The ICM tax began in 1967 and represented a sharp increase in statutory tax rates. In order to escape the increased tax burden, clandestine transactions and slaughter grew rapidly. A stricter control on clandestine killings and on the sale of beef by small market butchers, and the collection of the ICM at point of slaughter rather than at each sale of an animal (as is done in some states like Sao Paulo), could reduce some of the unfavorable effects of this tax. ANNEX 17 Page 6

One result of 'present tax policy, so far as livestock is concerned, is probably to encourage an extension of the area over which cattle are run, rather than increasing the productivity and efficiency of existing farms. A revision of the basis on which livestock production is taxed is most desirable, and should center on an improved system of land and income taxes.

Cattle Production

Cattle production in Brazil is a pastoral enterprise and land- intensive in nature. Most cattle are grazed on properties that range in size from 100 hectares to more than 10,000 hectares, with an average of about 1,000 hectares. Average stocking rates are about 3.0 hectares of pasture per cattle unit, with herd sizes concentrated in the 400-1,000 head range. Investments per unit of land are very low. Management of the larger properties is usually in the hands of a paid manager and ownership is frequently a family partnerhip or a private company.

Beef production is typically in three phases: the production of the weaned calf; the growing of the weaner; the fattening of the steer. Age of steers when sold for fattening varies from three years to four years dependent on local nutritional levels. There has been a dramatic change in geo- graphy of the beef industry in recent years and the trend is continuing. Breeding herds have been moving into the frontier areas, and the growing and fattening operations are expanding in the more favorable areas closer to markets. Large ranches are being established in the frontier areas of Western and Central Brazil by businessmen and corporations. These opera- tdons are often well financed and a relatively advanced technology is being adopted.

In the developed areas closer to population centers, cattle farming is complementary to crop production and involves dairying and the fattening of steers on semi-improved pastures. In these areas both farm and herd size are smaller and productivity per unit of land is higher than elsewhere.

The most striking feature of cattle production is the low productivity of the majority of the cattle herds. Calving percentages generally range from 30 to 70 percent with a national average of less than 50 percent. Slaughter cattle usually require four to five years to reach market weights. Animal mortality is excessive, particularly during periods of extended drought. Marketing is seasonal and most cattle are sold early in the dry season before the feed supply becomes critical. Mating is uncontrolled and little culling of breeding cows takes place. Weaning, when it occurs, involves separating 12 months old stock from their dams, and in many cases only male stock are withdrawn from the herd. Although bulls run with the herd continuously, calving is largely seasonal and occurs at the start of the rainy season. ANNEX 17 Page 7

Much of the milk is produced as a by-product of the beef enterprise, with production being influenced in part by the beef-milk price relationship. About 10 percent of the milking herds can be classified as specialized dairy enterprises. Cows are usually milked once a day for the excess production after satisfying the needs of the calves.

Some of the more progressive specialized cattlemen are demon- strating that with good management, beef and dairy enterprises can be efficiently operated in Brazil. An educational and supervised credit program would help motivate the rank and file producers to adopt their methods.

The basic cause of low productivity is inadequate nutrition. Most herds are dependent on natural grasses of relatively low value with little or no supplemental feeding. The gains made during the rainy season do little more than replace the weight lost during the dry season. In some areas, the shortage of water in the dry season complicates the problem. Even in the dairy production areas where cows are maintained under more intensive management, milk production per cow is extremely low, principally because of inadequate intake of forage. (The dependence on high-cost cottonseed meal for dry season feeding is wasteful as much of the protein is utilized for energy when carbohydrates are lacking.)

The most critical problem is the lack of feed during the dry season. There is no pat answer for all situations, as physical conditions vary greatly between ecological zones and they are never identical even within an area of relatively similar conditions. Furthermore, the economics of utilizing a given approach will vary with different situations. Three approaches to the problem are identified.

One is pasture improvement. This has generally received little attention - natural grazing has a negligible legume component, and the grasses deteriorate in protein and mineral content as the dry season advances. Several species of tropical legume and exotic grasses have proven useful in many areas. Seeding of these legumes would appreciably extend the grazing season and would increase protein and mineral intake,' thus enabling cattle to go into the dry season in better condition. Im- ported seeds of several improved strains of tropical pasture legumes are available in Brazil. Locally grown seed could easily be provided.

Phosphate fertilizer can substantially raise the carrying capacity of legume based pastures in many areas, as well as reduce mineral deficiency in cattle. Ground limestone is indicated on the acidic soils, particularly in the more temperate regions. There is a critical need for cheaper sources of both of these materials. ANNEX 17 Page 8

Rotational grazing and reserving pasture areas for dry season grazing can increase the carrying capacity and lengthen the grazing season. The cost of extra fencing should be compared with expected extra returns and relative cost of supplementary feeding when determining feasibility in a given situation.

A second approach to nutritional improvement is storing forage. This offers the most practical solution for most situations as nearly all parts of the nation receive enough rainfall to produce some kind of forage crop for storage either as silage, hay or in shocks. The use of silage is spreading in the more intensive production areas of the South, but, in general, little attention is given to stored forage. High cost of harvesting equipment and aversion of many specialized cattlemen towards crop production appear to be two major deterrents. Silage production is best adapted to the larger beef and dairy ranches where volume can justify machinery costs. Small operators could well consider production of sorghum and similar forage crops for storage in shocks.

A third approach is through supplemental concentrates. During periods of nutritional stress, these help to reduce welght losses and improve fertility. Protein is required for efficient use of low grade forage. Soybean meal and cottonseed cake are available in most parts of the country. The economic feasibility of their use in beef breeding herds depends on the amount and quality of the forage available. Cattle can synthesize part of their protein needs from nitrogen in urea. Urea can be toxic to cattle unless fed with a readily available source of carbohydrates such as molasses.

Lack of calcium and phosphorous are important factors in the low fertility rate. Steamed bonemeal can provide an excellent local source of these elements. Demonstrations in some other mineral deficient areas of the world have shown that this one practice can raise fertility rates over 20 percent.

Turning now to breed improvement, the cattle in tropical Brazil are principally zebus and zebu crossbreeds. European beef breeds, principally Herefords, are concentrated in the southern temperate zone. All of the European dairy breeds, with Holsteins predominating, have been introduced into the major dairy producing areas and are widely used for crossing with zebus. Brazilian purebred breeders have greatly improved the zebu breeds originally imported from India, and have potential for further improvement of economic traits if they adopted performance testing techniques. These breeds are described in the report on the Northeast. The ability of the zebu to survive under nutritional and heat stresses is well established. The indigenous Creole types of cattle are rapidly disappearing as a result of continued crossing with zebu bulls over the years. Non- descript zebu types have evolved, particularly in the interior, as a result ANNEX 17 Page 9 of uncontrolled breeding practices and poor nutrition. This is the basic breeding stock from which the bulk of the improved herds of the future will be built. Before genetic capacity for high rates of gain and early maturity can be built into this stock, there must be improvement in management and nutrition. Local cattle can then be upgraded quite rapidly by the introduction of bulls from good performing lines and by artificial insemination where its use is practical. The basic breed improvement program for commercial herds in tropical Brazil should be to upgrade with improved zebu bulls. The European beef breeds are not suited to the tropical environment. The Zebu cross breeds appear to be adapted where levels of management and nutrition are good and breeding is controlled.

The merits of crossbreeding for beef production in the southern temperate zone should be investigated. Introduction of 1/4 or 3/8 zebu blood into the herds of European breeds could increase calving percentage and growth rate.

The common practice in dairy operations is to upgrade zebus with European dairy bulls. Milk production of purebred and crossbred dairy cows is generally far below their genetic ability because of the nutritional constraint. As the degree of European breeding increases, the need for ample forage becomes more critical.

Limited use is being made of imported semen to introduce superior bloodlines. The merits of establishing artificial insemination centers with stud bulls in the more concentrated areas of production should be investigated.

Investment in the Cattle Industry

In general, capital investment in cattle farming represents less than US$200 per head of breeding stock, as compared to about US$650 in the U.S.A. The major improvements to date include land clearing and pasture establishment, fencing, development of water points and construction of cattle yards. Most of the capital is in cattle and land, with very little in on-farm improvements.

Net cash income per animal is very low. The cash return to management and investment appeared to be around 3 percent on average holdings (on the basis of depressed prices in the first half of 1969). This low rate of return at existing prices has caused considerable discontent among Brazilian cattle farmers and many have been reluctant to make further investments. On the other hand, there are individuals and firms investing in land as a hedge against inflation, or for the purpose of achieving tax savings by developing land in the tax incentive zones of Amazonas and the Northeast. ANNEX 17 Page 10

Improvements in the productivity of cattle herds dramatically increases the rate of return on cattle investment. Doubling of existing levels of productivity is a feasible objective on most properties, and gross income could be doubled with only a small increase in operating costs. Detailed estimates of increased costs related to increasing productivity are not available, but in the IBRD-supported beef cattle project the economic rate of return to additional investment aimed at increasing productivity has been estimated at 17 percent.

According' to the Bank of Brazil, the present inflow of institutional investment credit into the total livestock industry is about US$100 million annually. Much of this is directed to the dairy, pork and poultry sectors, but no quantitative breakdown is available. As most loan money is repayable within two years, and one-third is short-term working capital, it is probable that less than US$200 million of institutional credit is -actually in use by beef cattle farmers at any one time. This indicates that farmers often secure investment credit through non-institutional. sources. It appears that without an expansion of iistitutional lending these sources will not be adequate to meet credit requirements for development purposes during the next ten years.

Pig Production

The pig population, estimated at about 66 million, 1/ is distributed throughout Brazil with highest density in the southern temperate zone. Total pig numbers have increased about 45 percent in the past ten years. The lard-type hog is the most common. However, most of the major foreign breeds have been introduced and widely used in crogrfng with the native types.

Breeding stock and growing pigs usually range for much of their feed and little attention is given to husbandry. Fattening stock are commonlv hand-fed under semi-intensive conditions on maize, manioca, or crop residues. Slaughter age averages 18 months, at which time hogs are in very fat condition. Sows farrow annually with litters averaging around six pigs. Mortality rate is said to be about 45 percent for young pigs and 25 percent for older animals. This suggests that about 2-3 pigs are sold per sow per year as compared to about 15 per year under modern conditions.

It appears that even though investment per pig under range conditions is low prior to the fattening stage, the costs of fattening are high. Older animals are less efficient in utilizing feed,, and the excess fat is expensive to produce. Pork carcasses in Brazil contain about 55 percent fat which is trimmed off and sold as lard at a lower price than the average value of the carcass. This has a depressing effect on prices paid to producers for pigs.

1/ This estimate differs from trade sources which have a considerably lower estimate, but which may not include pigs raised for home consumption. ANNEX 17 Page 11

There is a growing consumer demand for leaner meats and vegetable oils rather than lard. Brazilian pork producers may experience increasing difficulty in the future to maintain their competitive position with beef and chicken, unless they improve their production efficiency and market a more acceptable and less wasteful product. Pork consumption is currently about 7.6 kilograms per capita or about 25 percent of total meat consumption. This is a high percentage by Latin American standards. Further increases in domestic pork consumption, or even maintenance of current levels, will depend partly on future beef/pork price ratios and quality of pork. A price differ- ential between high and low quality cuts of beef is becoming more common in the increasingly sophisticated urban markets. The demand for pork is more strongly influenced, therefore, by the cost of the lower-priced cuts of beef than by average beef prices. On the other hand, the peak flows of beef reach the market between March and August, whereas most pork is sold between September and February. To this extent the two products are complementary.

Export prospects for pork appear good in the short run in view of the current decline in world supply of pork and pork products. Moreover, since Brazil is exporting maize at world market prices for livestock feeding, there are good opportunities for Brazil itself to utilize more of this maize for livestock and poultry production. This would require more efficient management and technology.

A more modern and intensive system of pig production is developing in the States of Santa Catarina, Parana and Rio Grande do Sul, where production is tied more closely to maize than in most other areas. This area has advantages for development as a modern hog production area. The greatly increased productivity per sow as a result of modernized technology more than offsets the associated increase in costs. Less feed would be required to finish lighter-weight, younger and leaner pigs.

Chances for success of such a program would be enhanced if the pig producers organized cooperatives to provide technical and credit assistance, and handle purchase and storage of feed and marketing of the pigs. The program would also require the establishment of carcass grading standards based on backfat thickness and payment according to fat measurement. Cooperation from, and possibly contract arrangements with market outlets serving the more affluent consumers would help establish markets for a superior product.

Sheep Production

Brazil's sheep population, estimated at around 25 million, has been increasing steadily at about 3 to 3.5 percent per annum. About 55 percent of the sheep are in the State of Rio Grande do Sul, where they are kept primarily for wool production. The balance of the sheep are distributed throughout the drier areas of the country and are nondescript types ANNEX 17 Page 12 subsisting on range vegetation. The annual per capita consumption of mutton is about 0.36 kilograms. Most of the slaughtering takes place on the farms. Mutton and goat meat are important sources of meat for many rural families.

In Rio Grande do Sul, breed improvement schemes, in which artificial insemination has been used, has resulted in the development of improved flocks of the Corriedale, Romnev and Polwarth breeds. In striking contrast to this emphasis on breed improvement, little attention has been given to the development and use of better pastures. These still consist primarily of natural unimproved species which have become adapted to the summer and autumn growing season, but there is little vegetative growth during the colder winter period. Measured growth rates of steers grazing on native pastures in Rio Grande do Sul show that a summer liveweight gain of 120-160 kilograms is followed by a winter liveweight loss of from 30-80 kilograms. This highlights the basic problem which has been facing the livestock producer for many years. This problem is accentuated bv the relatively low standard of management under which stock graze the same pastures during most of the year, receiving little attention, apart from the seasonal chores such as shearing and marking, and some measure of disease and ,parasite control. In consequence, overall stocking rates average less than three mature sheep per hectare. Animal productivity is also low, as indicated by lambing percentages of around 60 percent.

The introduction of improved legumes and grasses, which when adequately fertilized are capable of maintaining growth during the critical winter months, coupled with increased rotation of pastures, additional water supplies and improved husbandry, could result,, as in neighboring Uruguay, in a threefold increase in mutton and wool production per hectare. It should also be noted that increased production of mutton could help reduce domestic consumption pressures on beef and possibly provide enough twool for export.

TPoultry

A modern poultry industry has developed close to the major urban centers. Individual production units range from 2,000 to over 10,000 birds. '.The technology is advanced and production efficiency is reasonably high. 'Local hatcheries are supplying hybrid chicks of the best foreign laying and broiler strains. Modern feed plants provide well-formulated poultry rations. 'The price of mixed feeds ex-mill is about US$90 per ton and the feed industry appears soundly based and competitive. Many of the producers have organized cooperatives to supply feed and chicks and to market eggs and broilers.

Broiler production is said to be increasing at a rate of about 40 percent per year, accompanied by a decreasing price trend. Prime chicken in late 1969 was quoted at about US$0.50 per kilogram live weight or US$0.70 per kilogram dressed. Consumption of poultry is likely to increase above the current figure of only 2.0 kilograms per capita. ANNEX 17 Page 13

The impact of poultry development has been dramatic in the case of eggs. The former wide fluctuations in seasonal supply have been reduced and quality control has been established. Eggs are currently quoted at about US$0.50 per dozen. Future expansion of egg production in the established areas is likely to be moderate as the industry is now meeting current market needs.

A high proportion of the poultry farms are owned by businessmen who have ample credit available to them. There are indications that the industry is beginning to move towards vertical integration, as it has in many other countries. The main problem of the poultry industry is seasonal fluctuations in grain prices.

Livestock Research

Livestock research is done by many of Federal, State, University and private agencies. The Federal Ministry of Agriculture manages (through EPE, its research division) nine regional research stations with a total budget for 1970 (excluding permanent staff salaries) of US$1.3 million. The amount of livestock research undertaken within this program is undefined in the budget. In practice it appears to be very small, with the exception of the regional research group in Rio Grande do Sul (IPEAS). Within each state, the Ministry of Agriculture also maintains a research team outside of the responsibility of EPE. The total budget for these state-based groups approximates US$2.1 million for 1970. Their work is largely based on the ABCAR extension organization and is concentrated on crops.

The Ministry of Interior is concerned with various investigational activities within its regional and specialized development agencies. Very few of these investigations are directly relevant to livestock development problems, however. The total research budget for these agencies appears to be about US$2.5 million.

A number of State governments, especially Pernambuco, Sao Paulo and Rio Grande do Sul, do agricultural research. The research station at Bage in Rio Grande do Sul has done useful work on temperate pasture management, and the Instituto Agronomico of Campinas is perhaps the largest and strongest agricultural research station in Brazil. Even so, its work on tropical pastures has been very limited.

Non-government research of interest to the livestock sector has been done largely by IRI, a research group initiated by the Rockefeller Foundation but operating since 1963 with USAID funds as the principal supporting finance. USAID has now declined to continue grant aid to IRI and has offered loan funds to replace grant money.

The Pan American Foot and Mouth Disease Centre in Rio is funded by OAS (Organization of American States) and administered by the Pan Ame- rican Health Organization. Its program includes virus identification, vaccine research and an advisory and consultative service. ANNEX 17 Page 14

This proliferation of research agencies and experimental stations has not been able to mount a well planned and effective attack on the problems of the livestock industry. Detailed investigations are required on many aspects, including; (a) the selection of grass and legume species for pastures for all major ecological zones; (b) the nutrient requirements for pasture species on various soil types; (c) selection of suitable rhizobium strains for selected pasture legumes; (d) clearing techniques for land for pasture as distinct from that for crops; (e) form and rate of pasture improvement and utilization in properties being developed; (f) effect of protein and mineral supplements in the dry season on cattle fertility and the best way to provide these items; (g) selection of adopted varieties of forage crops and development of practical techniques for production, storage and feeding in all ecological zones; (h) impact of early weaning on herd fertility and rate of growth of cattle; (i) intensive fattening as a way to increase the productivity of the national herd; and (j) economic evaluation of input-output relationships on farms of varying sizes in major ecological regions.

To improve the orientation and usefulness of animal production research will require: (a) more money from State and Federal Governments; (b) a closer relationship between research staff and the farming community; (c) separation of research facilities and staff from university and extension groups; (d) consideration of livestock development problems on an ecological rather than geographical basis; (e) provision of higher salaries and more advanced training to key research staff; (f) recognition as an issue of overwhelming importance that the investigational capability which can be utilized by Brazil be directed to a set of priorities consistent with their economic importance.

The most suitable type of research organization for livestock appears to be a central council made up of federal and state governments and producer interests. This council should be charged with deciding upon research priorities and of allocating to regional livestock research stations the resources required to get the assigned job done. The number of livestock research stations should be limited and located in the larger ecological zones of economic importance. Field work should, in most cases, be done cooperatively with private land owners rather than on a large number of strategically located minor research stations. University and extension staff, in addition to local producers, should be brought into the councils of the regional research stations and they should be intimately involved in the design and implementation of investigational activities.

A livestock research budget of US$50 million per year would be in keeping with the economic importance of the livestock industry and with the returns that might be expected from the well planned use of such a sum. ANNEX 17 Page 15

General Recommendations

Top priority should be given to developing the commercial beef industry and expanding at a rate which will enable increasing exports. Programs in hogs, poultry, sheep and dairy should emphasize production efficiency to assure ample supplies, and reasonable prices of animal products for domestic consumption. To attain these objectives, it is recommended that:

a) Programs for beef cattle should center on fuller utilization of understocked areas, developing modern beef breeding enterprises in suitable new areas, expanding in cattle fattening operations, and improving efficiency in general.

b) Priority should be given in research and extension to the vitally critical problems resulting from the dry season. Fundamental research at the stations should be coordinated with field trials covering different local conditions. The State extension agencies should be provided with adequate resources to provide intensive technical assistance and demonstrations with cooperating beef ranchers. Progressive livestock producers should help plan for local research programs and conduct cooperative field trials.

c) More long-term supervised credit should be made available to cattle raisers receptive to technical assistance.

d) Production, processing and distribution of improved pasture grass and legume seed should be greatly expanded.

e) All feasible ways of increasing to its economic level the use of- superphosphate on pastures should be exploited.

f) The existing price policy for cattle and the freedom to export beef without tax or quota restrictions should be maintained.

g) The ICM and other taxes bearing on the livestock industry should be revised to encoirage increased production and efficiency.

h) The basic improvement program for commercial herds in Tropical Brazil should be to upgrade with improved zebu bulls. The production of zebu crossbred steers may have merit where levels of management and nutrition are good. Crossbreeding should be ex- plored in the southern temperate zones as a means of increasing reproduction and growth rates in European type cattle. Perfor- mance testing should be adopted by purebred breeders and more advanced commercial breeders to improve the economic traits of breeding stock. ANNEX 17 Page 16

i) A coordinated and more efficient livestock transportation and marketing system should be sought urgently, and long range plans for expanding facilities for handling beef for export should be made.

j) Dairy producers should be encouraged, through effective milk handling regulations, price incentives for quality milk, and supervised credit and technical assistance to develop more specialized and efficient production units. Educational programs with dairymen should concentrate on providing adequate forage for dry season feeding and on improving husbandry practices. A study should be made of the potential for artificial insemination centers in the more intensive dairy areas.

k) The pig industrv should be assisted to move to intensive and efficient systems of production, and to production of leaner pork. Price incentives for lean pork based on fat measurement of the carcass should be established. A pilot lean pork production project involving a group of pig producers in Southern Brazil and cooperating market outlets should be set up to perfect techniques in production and marketing.

Investment Opportunities and Preinvestment Needs

These include:

a) the livestock sector needs more long-term credit. It is estimated that beef industrv in Brazil during the next decade could profitably use about US$1.5 billion for on-farm cash investment. On this point, it should be noted that in September 1967, the IBRD provided a US$40 million livestock development loan to the Brazilian Government, but disbursements have been slow. The reasons for this were examined in December, 1969, bv an IBRD mission which recommended certain changes in the relending terms, in the interpretation of the loan agreement, and in the processing of loan applications. If these changes are made, it is expected that the loan will be rapidly dis- bursed because the need for, and profitability of, well-used credit is high.

b) The Bank of the Northeast has submitted to the IBRD an agricultural credit request approximating US$50 million. This application was reviewed by preappraisal mission in November 1969. About 80 percent of the credit requested would be used for on-farm investment in cattle production in the Northeast region.

c) Joint rice and beef enterprises occupy over one million hectares of irrigated land in the center south. Yields of both products are low but the potential for increasing outputs is considerable. The required investments include land levelling, improved irrigation and drainage, pasture improvement, and more fencing. Feasibility ANNEX 17 Page 17

studies should be undertaken. (A related investment possibility would involve the sub-division of large properties into economic sized units for intensive farming by promising young farmers, and provision for financing.) d) Several feasibility studies are in order, as noted above. To reiterate, one would investigate the economy of improving processing facilities of the cooperative dairy plants in the Rio de Janeiro, Sao Paulo and Belo Horizonte milksheds. Another study might investigate the economy of superphosphate plants and distribution centers in strategic pastoral areas. A third would research pasture development problems and techniques including land clearing, pasture establishment, maintenance and utilization, and improvement of soil fertility and pasture yields. A fourth would investigate the input-output relationship and the economics of livestock production under varying sizes of farm and other conditions -- to enable useful estimates by region of net farm income, surplus available for investment, and of returns to investment. Finally, the appropriate regional pattern of specialization of the livestock industrv needs investigation, along with the policy measures most useful in stimulating growth in line with this pattern.

ANNEX 18

PRICING AND MARKETING FARM PRODUCTS

This annex outlines the marketing and pricing system for agricultural products, what is going on in private and public sectors to bring about change for the better, and how investment programs and public policy can be made more effective in expediting desirable changes. The role of Government in investment, regulation and services is discussed.

Brazil has long been preoccupied with problems of marketing its major export commodities, and with assuring a domestic supply of basic foods at stable prices. Most of the effort has gone into operating programs, such as those of IBC, IAA, and SUNAB and its auxiliaries CIBRAZEM and COBAL. 1/ Recently there has been increasing attention to initiating and improving service and regulatory programs -- such as market news, situation and outlook work, inspection and grading for the domestic market, and marketing research -- which would serve both to improve the function- ing of the private marketing agencies and to provide knowledge required for developing and administering governmental policy and programs on prices and marketing.

Price Policies and Programs

Brazil's economic policies affecting agricultural development deal with three types of price problems: (1) problems of low prices arising from chronic oversupply on domestic or international markets, and with secularly or cyclically declining prices; (2) sporadic price fluctuations arising from severe year-to-year instability of supply; (3) symptomatic manifestations of inflation. Seasonal variations in prices within crop years have also been a cause of concern.

Chronic oversupply on world markets has been the basic problem of coffee, sugar and cocoa. Government intervention in coffee marketing began in the first decade of this century, and continued almost without interruption to the present day. Sugar has been influenced strongly by the relative inefficiency of the Northeast, and the competitive strength of sugar cane versus other crops in the Central South, especially Sao Paulo. Cocoa prices have alternately weakened and strengthened in irre- gular cycles of several years, and the Brazilian price problem was accentuated by a prolonged and serious declining trend in productivity (-2.4 percent a year, average for the period 1947-1965).

Year-to-year instability of supply and price was a major reason for Government efforts to influence prices of articles of domestic consumption (Table 18-1). It was believed that the supply of some annual crops

1/ IBC, Brazilian Coffee Institute; IAA, Sugar and Alcohol Institute; SUNAB, National Supply Superintendency; CIBRAZEM, Brazilian Storage Company; COBAL, Brazilian Food Company. ANNEX 18 Page 2 was usually low following a year of low prices because farmers responded to low prices by planting less. Thereupon, reduced supplies brought about high prices in the following season. Actually, change in yield per hectare has been the principal cause of changes in total supply and changes in area planted have usually been minor. Furthermore, changes in prices tend to stabilize income by acting as a counterbalance to changes in quantity produced. Thus, stabilizing prices without stabilizing yields may lessen farmers' capacity to maintain output in a year following a small crop unless credit is'readily available. In fact, Brazil's price programs have had little effect on year-to-year changes in prices, of most crops, since stock carryovers have been small.

For some products, especially beef and milk, supply responses are slower. -Relative scarcity with high prices, or oversupply and low prices tend to persist over several years.

The third type of price problem is related tod inflation. Chronic inflation probably enhanced popular and political sensitivity to rising prices. Until checked by a change in Government policy in 1964, the price level had increased at a rising rate since World War II. At the peak of the inflation, maximum changes in the general price index reached 11 percent a m6nth (December 1963 to January 1964) and 95 percent a year (July 1963 to July 1964). Any price which took the lead in the general rise tended to become a target for repressive measures whether or not the rise for that pr6duct may have been needed to redress a supply imbalance.

Seasonal variations in prices tend to be larf&e? particularly when superimposed on rapid inflation. From harvest tine to the end of the crop year prices have been known to double or triplfe, Thus, there have been instances in which traders who bought at the lowest prices and sold at the highest prices made fantastic profits. Stith instances have strongly influenced Brazilian policy on food prices. As a former Superin- tendent of SUNAB (Nati6hal Supply Superintendency) wrotee, "Many people, when they hear of SUNAB, think immediately of price fixing and control. But this function is only occasional, springing from the necessity of disciplining the market for food, where, generally, free competition does not prevail, requiring the presence of the State to cottect the distortions that arise. If it were not for the activity of the Superintendency, scru- tinizing prices daily, the oligopolists would impose on consumers whatever prices they choose, provoking price increases through mere artificial ma- neuvers, which benefit producers in no way whatsoever." 1/

It would be costly for traders, or for a price stabilization agency, to assume that seasonal price rises invariably provide handsome profits to whoever undertakes to store grains in Brazil. Seasonal price

1/ Enaldo Cravo Peixoto. A SUNAB e o Abastecimento de Trigo no Brasil. Ministerio da Agricultura. Superintendencia Nacional de Abastecimento. 30 pp. proc. Undated, probably 1969. ANNEX 18 Page 3 rises have not been so dependable a source of profits. Calculated incomes from storing rice, corn and beans in several States in 1966 and 1967 ranged from profits of 50 percent to losses of 30 percent (Table 18-2). Thirteen out of 22 examples resulted in losses. It could not be maintained that these calculations provide valid estimates of the size of long run average profits from storage, but it does appear that traders are as likely to incur losses as to reap profits from storage operations.

To combat agricultural price problems, a considerable number of policy-making and operating agencies have been brought into being. One set of agencies, specialized by commodity, includes the coffee, sugar, cocoa and rice institutes, and the wheat program (IBC, IAA, CEPLAC, IRGA, SUNAB-DTRIG, CITRIN). 1/ Another set supports minimum prices for a variety of other products (CFP, National Commission on Food Supply, Bank of Brazil, SUNAB-CIBRAZEM-COBAL). 1/ A third set of agencies, overlapping somewhat with the minimum price group, is charged with checking rising prices and alleviating short-run scarcities (SUNAB-COBAL-CADEP). 1/

The special commodity programs cover important export commodities (coffee, sugar and cocoa); rice, the leading Brazilian crop in terms of farm value, but mostly consumed domestically; and wheat, the leading import commodity. Each of these commodity programs has a variety of objectives, of which price is one. The relative importance of the price objective varies from commodity to commodity.

Coffee and sugar programs are predominantly concerned with price, enforcing determinations with respect to price levels by effective control of distribution, or of production and distribution. The cocoa program, on the other hand, consists mostly of activities having little direct influence on prices. Price objectives of the rice program are geared to the maintenance of minimum prices, using the machinery of the Government's minimum price program. Prices for rice are determined by the Government, guided to a considerable extent by recommendations of the regional association, the Rice Tnstitute of Rio Grande do Sul.

In al] of the foregoing programs, price levels have been fixed near world market levels, except for coffee and wheat. Prices to coffee producers ihave been backed off from the world market by a "retention levy" or "contribution quota" on the foreign exchange received for exports. The primary objective of the wheat program has been to promote domestic production in a driv,e for import substitution. Minimum prices for wheat for the 1965 to 1969 crops were fixed substantially above the world market level (approximately double in 1969). Both domestic and imported supplies are controlled by the Federal government through a complex of agencies,

1/ CIPLAC, Executtive Commission for Recuperation of Cacao; IRGA, Rice Institute ot Rio Grande do Sul; DTRIG, Wheat Department of Bank of Brazil, CITRIN, National Wheat Commission; CFP, Commission for Financing Production; CADEP, Campaign in Defense of the Popular Economy. ANNEX 18 Page 4 including SUNAB, COBAL, CITRIN and CACEX of the Bank of Brazil, which has a monopoly of procurement and distribution of both domestic and imported supplies.

The minimum prices program was initiated with legislation enacted in 1951. More than a dozen products have been supported at one time or another. Prices to be supported were announced at the beginning of the planting season. Sometimes they were raised before harvest. Usually, they were set conservatively, so as not to incur heavy cost to the government. In addition, the heavy rates of inflation meant that in most years the effectiveness of the announced price was diminished by 20 to 40 percent over a six-month period. Announced prices were effective at the large consuming markets, prior to 1967-68 crops, with charges for sacks, handling and transportation to be deducted to arrive at the price actually paid to the farmer. Beginning with the 1967-68 crop, minimum prices were announced at interior points, so the farmer would have less difficulty in determining what he might actually get.

Minimum prices were made effective mainly by purchases from producers until 1967, although loans were used as a means of support for some products from the outset. Beginning in 1967 loans became the principal means of support. The government agency financially responsible was the Commission for Financing Production (CFP), but the Bank of Brazil was used as the agent for making purchases and loans, the Brazilian Storage Company (CIBRAZEM) provided warehousing services, and the Brazilian Food Company (COBAL) handled sales and distribution of commodities acquired under the program. The National Superintendency of Supply (SUNAB) was the parent organization to which CIBRAZEM and COBAL were affiliated. A National Commission on Food Supply passes on CFP's recommendations of the prices to be placed in effect. Upon approval, the minimum prices are established by Presidential decree.

Effects of the minimum price program on crop production have been quite variable. Apparent successes were the exception rather than the rule. Purchases and loans reached 6.5 percent of the corn crop in 1963, 23 percent of rice in 1965, and 12 percent of beans in 1967. These presumably were years of greatest impact of the programs for the respective crops. Prices received by producers in the State of Sao Paulo were much below normal in each instance -- probably the program prevented even greater losses to farmers. Most of the time, however, the program seems to have had negligible effects on farmers' decisions to plant these crops -- at least, efforts to measure the effect statistically have given negative results. It does not seem to have been possible to establish, unequivocally, that acreages planted have been greater than they would have been in the absence of a program, or that use of inputs such as tractors and fertilizers responded measurably.

Minimum prices benefit both consumers (to the extent that they tend to stabilize supplies, and thus prices, from year-to-year) and producers. The maximum price program, on the other hand, is of interest mainly to consumers. ANNEX 18 Page 5

Aside from minimizing public discontent over rising prices, efforts to impose maximum prices or to control margins have temporary effects, at least, on important price indexes. The wholesale price index affects interest charges on part of the Federal debt, represented by Treasury certificates whose face amounts are adjusted periodically (monetary correction) on the basis of changes in this index. The cost- of-living index enters into the annual readjustment of minimum wages, which in turn become the basis for further price adjustments. Thus, there is great pressure on the government to hold down prices. Items having heavy weights in the index, such as beef, are particularly watched. The method of calculating the wholesale index was revised in 1969, reducing the weight of beef prices from 10.3 percent to 5.7 percent in the general index.

To suppress undue increases in food prices SUNAB had a wide range of powers, including authority to fix prices and marketing margins. In 1969 SUNAB fixed margins for beef and milk. It also fixed prices which might be paid to producers for milk. It did not fix wholesale prices of beef directly. Prices for a list of 33 items were fixed in stores participating in a "voluntary" program known as CADEP (Campaign In Defense Of the Popular Economy). The list included most staple foods, and household supplies, such as soap. Stores were free to participate in the program or not, as they chose. Participating stores gained the publicity, attract- ing customers who might buy items not on the controlled price list, as well as price-controlled items. Also, participating stores could purchase some essential items through COBAL -- this might mean obtaining domestic supplies acquired by COBAL earlier through the minimum prices program, or imported supplies, at times when domestic supplies were scarce. Prices established under the CADEP program were subject to monthly review by SUNAB, and revised wqhen changes occurred in wholesale prices.

Processed food products also were subject to industrial price controls, exercised by the Interministerial Price Council (CIP). Tlese controls were administered with some flexibility. An industry desiring a change in prices was required to submit cost information justifying the request -- the requests were not always granted. In December, 1969, it was announced that beginning in January, 1970, prices may be adjusted for authorized changes in wages, or in foreign exchange value of the Cruzeiro, without prior approval.

SUNAB's beef price program in 1969 consisted of the promulgation of margins for retailers in all major cities. In Sao Paulo and Rio de Janeiro, SUNAB also participated actively in meat distribution. Cattle were purchased by SUNAB and slaughtered in a plant at Aracatuba, Sao Paulo, whichi It leased and operated, or in privately owned plants on a commission basis. In procuring cattle for its slaughtering operations, SUNAB's policy was to pay prevailing prices. In selling the meat, however, SUNAB charged prices which, during most of 1969, were far below the equivalent of live cattle prices. The difference (loss) was made up out of the Federal Treasury. Since the Ministry of Finance was in position to compare the ANNEX 18 Page 6 beef subsidy with the probable increment in interest payments on the ad- justable Treasury certificates in the absence of the subsidy, it may be presumed that the course chosen minimized the Federal expenditure.

The quantity of beef supplied to the Rio de Janeiro market in 1969 was variously estimated at 50 to 60 percent of the total supply. In Sao Paulo, SUNAB's share was estimated at 40 to 50 percent. Butcher shops obtaining their supplies from sources other than SUNAB paid considerably higher prices for beef, since their supplies did not receive the subsidy. However, such shops were required to observe the maximum retail margins, in Cruzeiros per kilogram of beef of specified cuts and qualities. As a result, in November, 1969, the best quality of beef retailed in Rio de Janeiro for about 2.50 New Cruzeiros per kilogram (US$0.27 a pound) in shops obtaining beef from SUNAB, and for 4.00 New Cruzeiros per kilogram (US$0.45 a pound) in other shops (hind quarter cuts, bone removed). SUNAB's business obviously was limited by the quantity it was willing and able to supply. Constraints appear to have been the amount of subsidy it was willing to pay, and the effect that any expansion of its procurement efforts would have had on live cattle prices.

The SUNAB beef price program of 1969 differed from earlier efforts. In the early 1960's, efforts were made to fix beef prices by decree. With this, supplies became scarce in Sao Paulo and Rio de Janeiro, whether because consumers became more eager to buy at what came to be bargain prices, or because live cattle prices became depressed and farmers began to reduce their marketings. The supply crisis eventually became acute, and police were sent to confiscate cattle from the ranches, to be slaughtered and sent to Sao Paulo and Rio de Janeiro. This did not prove popular with farmers, nor effective for long in obtaining adequate supplies.

The problem of beef prices is highly seasonal. The volume of marketings is low from about July or August to November or December. This is the dry Brazilian winter and early spring season known as the entresafra ("between harvests"), when pastures are poor and cattle on the ranches normally lose weight. Marketings begin to increase after November and prices tend to decline. Thus, crises of supply and price tend to occur during the entresafra. The confiscation remedy was tried in the entresafra of 1965. In 1966, as part of a general relaxation of economic controls, beef prices were allowed to rise. Consumption was checked and distribution became more normal, even though slaughter decreased from the previous year. In the entresafras of 1968 and 1969 SUNAB became active with its new slaughter and subsidy technique, forcing domestic retail prices below a remunerative level for slaughtering plants, particularly in Rio Grande do Sul. Some found that they could pay prevailing prices for live animals and sell beef in European markets.

The beef price and supply situation in 1968 and 1969 presented a paradox. The domestic market was supplied fairly adequately, with part of the supply heavily subsidized. Farmers complained of abnormally low ANNEX 18 Page 7 prices (up to July or August of 1969, at least) and their complaint was consistent with the apparent ability of packers to export beef. Cattle prices in December, 1968, were lower, relative to the general level of wholesale prices, than at any time since 1960. Marketings were sufficent to meet both the subsidized domestic demand and an export level that had- not been equalled since the 1940's. Both the utilization and price trends were contrary to expectations based on studies of demand and supply, which had indicated that Brazil's domestic beef supply would lag increasingly behind demand from the mid-1960's through the 1970's. 1/ The prospective deficits implied a rising level of beef prices relative to other food prices.

Either a weakening of domestic demand, or the liquidation phase of a cattle cycle could account for this paradox. Brazil does appear to have a cycle in numbers of cattle slaughtered. Between 1949 and 1967 there were four peaks in numbers of cattle slaughtered. 2/ Official slaughter data for 1968 and 1969 are not available (as of December, 1969), but cattle slaughter in the first half of 1969 may have set a new record, based on slaughter data from Rio Grande do Sul and Sao Paulo. The last previous peak was in 1958. Thus, 1969 could mark the end of a liquidation phase, with reduced marketings and higher prices in prospect for the next few years.

SUNAB's beef marketing activities in 1968-69 probably had relatively little effect on the general level of cattle prices. Some cattle were probably diverted from private channels to SUNAB, causing financial problems for the private firms affected by this diversion. Such firms may have been able to offset part of their losses by reducing.prices paid for cattle in some locations, but their opportunities to do so would have been limited to areas beyond the influence of either SUNAB or of firms engaged in exporting beef.

There is reason to expect that beef prices will rise relative to the general price level over the next several years. The cattle cycle may have reached the start of the buildup stage, implying reduced marketings and rising prices. Public policy makers should make due allowance for the fundamental factors in the situation and avoid attributing the price rise simply to manipulations of middlemen. Otherwise, there is likely to be renewed dis- ruption of meat distribution, and continued disincentives to cattlemen. 3/

1/ According to FAO's Indicative World Plan, Brazil's meat supply was in balance in 1962. Consumption was expected to reach 3,863,000 tons by 1975, while production would rise to only 3,522,000 tons. Interpolating on the basis of the respective growth rates, Brazil's expected deficit would have been 75,000 tons in 1969, most of it in beef. Instead, Brazil exported 93,000 tons of beef in 1969. 2/ See: Guilhermo Dias, "Various Aspects of Beef Production in Central- South Brazil" ANPES study no. 7. Sao Paulo, 1966. 3/ In February 1970 SUNAB discontinued its intervention in the beef market. ANNEX 18 Page 8

Agricultural MarketinR

Meeting Brazil's agricultural marketing needs involves three classes of problems: (1) increasing the capacity of tthe marketing system to keep it abreast of agricultural output and market demand; (2) raising marketing efficiency; (3) solving a variety of structural deficiencies. Little study has been given to these problems. Growth and improvement in the agricultural marketing sector has been largely the result of private initiative. There is little recorded information about the characteristics of the marketing system, how it has been changing in recent years, and what changes will be needed to improve marketing efficiency and to keep marketing services abreast of the growing needs.

Maintaining adequate physical capacity of marketing facilities, properly located, has been a major problem. The magnitude of the problem is barely suggested by the overall growth rate of 4 1/2 percent a year. in gross agricultural output in the 1947-65 period -- which implies a doubling of volume every 16 years. Growth rates for specific products in specific areas may be much greater than this. Soybean output increased from 152,000 tons in 1959 to 936,000 tons in 1969, a growth rate of 20 percent a year. Providing handling, storage and processing facilities for the increase of more than 3/4 million tons of output in less than 10 years was a major achievement. There are indications that investment in facilities-preceded and stimulated' the increase in soybean production -- a feat of successfully anticipating and,synchronizing incipient final demand with production potential.

Crop.output' in the frontier States of Parana, Mato Grosso., Goias and Maranhao grew at annual rates of 10 to 12 percent a year over the period 1947 to 1965.. Such rates require a doubling of' facilities every six to seven-years (without allowing for the tendency for quantities marketed to, grow. faster thanwquantities produced).

Growth in output of selected products of industries using agricultural raw.materials varies considerably from product to product in the past two decades (Tabl?e 18-3). Dry and pasteurized milk, sugar, vegetable oils: and paper grew most rapidly -- 7 percent or more annually. These were industries which probably at times-experienced shor-tage of capacity. Meat-,, butter and leather had low growth rates. These industries probably suffer from excess capacity, overall, although new construction may be advisable, to update technology or to exploit emerging locational opportunities-.

The problem of capacity became conspicuous at times when exceptional crops overburdened storage facilities. An example of this.took place in'November, 1969, while the mission was in Brazil. A bumper crop'of wheat in Rio Grande do Sul overtaxed storage and transport facilities, and wheat was stored' in the open -- stocks of canvas were quickly exhausted to provide temporary protection. Similar events in the past have:made storage a.perennial cause of public.concern. One study of storage needs in 1963 listed 10 s.torage studies and.reports that were completed between 1943 and 1962. Sev- era'l of' the-reports were' national plans-for warehousing farm products.. ANNEX 18 Page 9

This public concern led to the creation of a number of State and Federal warehousing enterprises during the two decades following World War II. The Central-South region of Brazil had about 15 million tons of storage capacity in 1965, of which 5.3 million tons belonged to various governmental enterprises. Notwithstanding the concern of the activity, a storage problem remains. As the wheat crisis of 1969 illustrated, there is still not enough capacity properly placed to meet every need. Furthermore, many of the facilities continue to be underutilized.

Privately-owned storage facilities tended to be more fully utilized than publicly-owned facilities in Brazil. In 1965, private facilities had 54 percent of the capacity and handled 73 percent of the volumes of business. Stocks acquired or financed under minimum price programs made up the bulk of stocks in publicly-owned warehouses. Commercial customers tended to prefer privately-operated warehouses because operating practices were more flexible, and charges more reasonable. Possibly, publicly-owned warehouses more frequently emphasized size and economies of scale at the expense of other economic factors affecting overall marketing costs, were less conveniently located with respect to the needs of private trade, and adversely affected by shifting patterns of production and distribution.

This description is based on a recent study of needs for intermediate storage facilities for grains and potatoes in the Central-South. 1/ The study took cognizance of deficiencies in the analyses underlying previous storage studies, principally the inadequate appreciation of the realities of marketing mechanisms. A major objective was to estimate existing storage capacity, storage demand in 1970, and additional capacity needed by that date in each of 34 "production zones" in the seven States of the region. Anti- cipated deficits totalled nearly 4 million tons. The report did not make this a forecast of need, pointing out, for instance, that only specific analyses at the project level could determine whether a new storage unit in a deficit zone would constitute an economically preferable alternative to the utilization of idle capacity in other zones. In fact, the study brought out strongly the limitations arising from the countless and unavoid- able working hypotheses, assumptions, projections and generalizations upon which the estimates are based -- limitations which can be removed only on the basis of specific information applicable to specific projects.

The storage study just discussed may serve as a general example of the problem of assuring that the capacity of marketing facilities will be adequate for Brazil's developing agriculture. Even so simple a marketing function as storage raises complex problems in determining how many units of what capacity, offering what services, are needed in which locations. The storage study frequently cited the role which changes in location of

1/ Pesquisa Basica Para Um Programa Global de Armazenagen Intermediaria. CIBRAZEM. Rio de Janeiro. 606 pp. 1969. ANNEX 18 Page 10 production, and progressive improvement in road and rail transport have played in determining optimum solutions to such problems, and how such developments have sometimes made an otherwise efficient installation unprofitable before its physical usefulness was past. The same things can be expected to happen to other marketing enterprises besides storage. Improved transportation sometimes accentuates the advantages of larger facilities over small facilities, while at other times it favors a more complex flow of products from production areas to consuming areas, reducing the quantities flowing through term-inal markets and favoring intermediate-sized facilities so located as to take advantage of a wider range of alternative markets. A striking example of this occurred in the United States, in the meat packing industry. Brazil's livestock marketing system may be on the verge of a similar metamorphosis.

Turning now to the second category of agricultural marketing problems, that of raising marketing efficiency, there can be no doubt that it is an urgent necessity for Brazil. But it is a problem much more diffused, multifaceted, and difficult to harness in a development plan than are the problems of capacity just discussed.

There appears in recent years to have been a significant increase in labor productivity in manufacturing industries based on agricultural raw materials. Employment rose only about half as much as sales over the period 1949 to 1968. Employment in retail and wholesale trade in food and beverages, likewise, rose less rapidly than physical quantities between 1950 and 196Q0. In textiles and clothing, employment in retail establishments approximated the growth in volume of sales, but employment in wholesale establishments increased less than volume handled.

While it seems that marketing efficiency has been increasing-, it is gengrally agreed that many inefficiencies remain. Some are rooted in obso:- lete techniques (for example, grains continue to be hand-led mostly in sacks, rather than bulk), or in institutional forms (retail enterprises, for example) inappropriate for .Todern conditions. Obsolete firxed facilities, as long as they remain usable, permit continued operations on margins that discourage replacement with newer, more efficient facilities. However, new construction to take care of increasing volume, or to replace facilities which can no longer be used, appears to provide the basis for the improvements in efficiency that have been observed. Coexistence of newer, more efficient facilities within the trading area of older, less efficient facilities leads to competitive stresses, which may spill over into the arena of public pplicy if the older firms are politically strong.

Transportation makes up a big part of marketing costs. The recent st,d7y of intermedisate storage requirements added considerable further evidence as to the many ways in which the marketing system has already vbeen affected by improved transportation. More direct routing of goods from producing to consuming areas reduces freight charges directly, cuts down on the number of times go,ods need to be rehandled, facilitates bulk handling, ANNEX 18 Page 11 promotes the use of larger plants to achieve economies of scale, and increases competitive pressures tending to eliminate the less efficient marketing units at all stages of the process.

The flexibility of the motor truck has contributed to the general improvement of marketing. The large volume of traffic in agricultural produce and farm production supplies is quite evident as one travels the highways in Brazil. More than 40,000 kilometers of road were built, and more than 5,000 kilometers paved annually between 1965 and 1968. No data are available on improvements in the quality of unpaved roads, but this could also have been significant. Numbers of trucks registered increased about 20,000 units annually from 1964 to 1967, about 4 percent a year. Between 1958 and 1964 the increase was even more rapid, about 30,U00 units annually, or more than 7 percent a year.

The full potential of improvements in transportation for improving marketing efficiency frequently cannot be realized without far-reaching changes in the structure of the marketing system. Needed changes at one stage of the system may not be practical until complementary changes are made at another stage. One of the gains from vertical integration may lie in this fact. Extending the range of decisions over which a single firm has control may hasten the introduction of cost-reducing innovations.

This illustrates the third class of problem in Brazilian farm product marketing, viz., structure. A multidimensional set of structural problems is present in the Brazilian system, or embodied in the policy issues confronting the government. One dimension concerns the relative roles of publicly and privately-owned enterprises. Another, the degree of concentration of control (oligopoly or oligopsony) at a given stage of the marketing system. A third, already referred to from the point of view of technology, arises from the coexistence of facilities at varying ages or stages of obsolescence.

The public versus private ownership issue was considered in the recent study of needs for intermediate storage. The findings do not pre- clude a public role in ownership of marketing facilities, but they do suggest tihat the proper role may be quite limited. Levels of occupancy tended to be higher in privately-owned facilities and since costs per unit of storage tend to vary inversely with the level of occupancy, private storage would tend to be less costly than public storage. Private facilities apparently offered more flexibility in services, which yielded cost benefits to users in addition to the gains from higher occupancy. Public ownership seems best adapted for projects in which the service to be performed is relatively simple and well-defined, the economies of scale are very great, and the amount to be invested in individual projects is very large.

Concentration of control, i.e. market power, at times presents a serious economic problem. The statement of the Superintendent of SUNAB, cited above, indicates the concern in Brazil over this aspect of marketing. Typically, market power is thought of as something that comes with the growth of very large firms. In Brazil, however, small local merchants have, in the ANNEX 18 Page 12 past, enjoyed considerable market power by virtue of poor transportation, which sharply limited the number of alternative outlets available to farmers. In such circumstances local prices might fall far below a proper relationship to prices prevailing in central markets. The widening of marketing margins might even correspond to a short-run rise in costs if the local glut overtaxed the capacity of local facilities. With improvement in tranisport facilities, however, there sprang up a class of buyers (truckers, or "cam- ionheiros") eager tQ profit from suclh widening of local marketing margins, and competing with the local traders. In some instances the camionheiro may, in fact, have been able to provide equal service at even lower cost than the conventional type of local trader. At other times, no doubt, cam- ionheiros may have abused opportunities to exploit unwary producers, but it is doubtful that such instances offset the general gain from the entry of additional buyersiwho provided a more direct link to central markets. The growth of cooperatives also strengthened competition in farmers' local outlets for some products.

Agriculturally-based corporations are distributed throughout the list of Brazil's 500 leading corporations, arrayed by size, but tend to be more concentrated toward the lower end of the size range. 1/ In the top 50 corporations, 13 were agriculturally-based, wlhile the last 50 included 25 agriculturally-based firms. The largest agricultural firm, a tobacco company, ranked 9th. Beverage firms ranked 18th and 26th, and the largest food firm, engaged in vegetable oil processing, ranked 30th. In meat packing, four firms were in the top 500, ranging in rank from 199th to 367th. A more relevant measure of economic concentration would compare the volume of business of the leading firms against the total volume of business in. their supply or marketing areas. By such a measure the fluid milk marketing firms in the larger capital cities have some of the largest market shares. The vegetable oil industry appears to be highly concentrated, also.

Total investment in food processing industries was about US$350 million in 1959. Maintaining the 1959 ratio to value of production, this would have grown to about US$800 million by 1968. Total value of sales in the two years was approximately US$1.4 billion and 3.3 billion, respectively. Fixed assets of the 52 food manufacturing firms in the 500 leading corporations amounted to US$320 million in 1968.

The capital structure of food industries in 1963 consisted of about 62 percent equity financing and 38 percent borrowed funds. 2/ Borrowed funds were almost entirely from loans maturing in less than 6 months. Assets were

I/ Based on a composite measure of size including net worth and reported profits in 1968. See Caderno Especial, Conjuntura Economica, Vol. XXIII, No. 11, November 1969. 2/ Survey of 109 firms conducted by Fundacao Getulio Vargas for BNDE. (National Development Bank). "A Industria de Alimentos No Brasil." Fundacao Getulio Vargas. Rio de Janeiro. 149 pp. proc. 1966. ANNEX 18 Page 13 divided 37/63 between fixed assets and working capital. About half of the working capital was in inventories of raw materials and finished goods. Ra- tio of equity to fixed assets was about 2 to 1. The food firms in the tabu- lation of leading firms for 1968 had a ratio of equity to fixed assets of 1.1 to 1. Apparently, self-financing of working capital became less important between 1963 and 1968. In 1963, one out of five firms reported that lack of working capital was responsible for underutilization of plant capacity.

Brazilian policy with reference to agricultural marketing as of December 1969 appeared to stress four main activities: additions to storage capacity, construction of wholesale market centers for major cities, expansion and improvement of port facilities, and expansion of supermarkets. M1any activities other than these four with implication for bettering the marketing process were going on, or were under consideration, but either involved less effort, or were of less certain priority, given the recent changes in the Federal administration.

The least certain of the four main activities, perhaps, is the storage program. As noted above, a major study of storage needs was published in 1969, and a harvest-season crisis in the wheat area late in the year gave impetus to the long-standing public interest in this subject. On the other hand, the low utilization of capacity among existing publicly- owned warehousing corporations could be expected to induce them to take a conservative view of additional storage construction. The Strategic Deve- lopment Plan for 1968-1970 recommended priority for construction of 2 million tons of storage capacity, about one half the anticipated deficits. 1/ Much of this program, especially in the public sector, was behind schedule at the end of 1969.

The wholesale market center program of the 1968-1970 Development Plan contemplated new and expanded projects for all major cities: Sao Paulo, Rio de Janeiro, Recife, Belo Horizonte, Salvador, Porto Alegre, Fortaleza Belem, Niteroi/Sao Goncalo, Brasilia, Aracaju, Maceio and Manaus. Sao Paulo's wholesale center was opened in 1966, but needs additional food handling and storage capacity. The remaining cities are in the planning or construction stages, with Recife in partial operation. An executive group for modernization of the foods supply system has been established to stimulate progress on the program. Wholesale centers require large investments and major changes in trade patterns. It is difficult, also, to break with traditional and out- moded concepts of the services to be performed in new wholesale market centers. As a result, many delays occur in planning, financing and constructing them.

1/ Programa Estrategica de Desenvolvimentos 1968-1970. Areas Estrategicas I E II, Agricultura E Abastecimento. Ministerio do Planejamento e Coordenacao Geral. Setembro 1969. ANNEX 18 Page 14

The need for improved port facilities for exporting agricultural products became apparent within the past decade. Sporadic exportable sur- pluses of corn (especially large in 1965 and 1968) stimulated the port pro- Jegt for Santos, which also has been slow to be implemented. Basic improvements are needed in harbor depths, numbers of ship berths, and land transport to and from port areas, as well as facilities specifically for efficient handling of particular products such as grains.

Supermarkets and self-service stores were to be expanded greatly under the Strategic Development Plan for 1968-1970. Officials of the new Federal administration reaffirmed this goal in public statements in late 1969. A goal of 4,500 supermarkets was set for 1985; 600 by 1971 as compared with 500 existing when the Plan was drafted. Need for change arises from inefficiencies in present food retailing, which consists of many small shops, and of "feiras livres," temporary markets set up in streets blocked off to vehicular traffic and held one day a week in each location. The replacement of small family-run stores and feiras livres by supermarkets and self-seryvice stotes has been slow, in part, because of the high cost of store space. Brazilian cities have high population densities and high land values, whereas supermarkets and self-service stores require relatively large areas. The Plan estimated that chain store organizations would provide half of the financing needed, Brazilian Government sources 20 percent, and international organizations 30 percent. Table 18-1. Year-to-Year Variability in Prices of 14 Major Crops, 1944-1965.

Crop Coefficient 1 2 f Extreme deviations from trend Variation - Below Above ------percent------

Rice 26 39 47

Corn 20 26 38

Wheat 32 40 59

Coffee 37 47 65

Cotton 28 29 71

Cocoa 38 37 80

Sugar Cane 25 31 45

Beans 22 31 48

Mandioca 17 27 22

Potatoes 22 29 33

Bananas 20 28 42

Oranges 23 31 47

Tobacco 114 25 22

Peanuts 30 314 69

1/ Based on standard e5ror of estimate of price from the regression log P = a + bt + bt ; P = price and t = time in years.

Source: Louis Herrmann, Changes in Agricultural Production in Brazil, 19147-1965, in press. Calculated Outcome of Storage of Rice, Beans and Corn Between Harvest and Following Preharvest Season, 1966 and 1967, Specified States. L/

Harvest In Following Preharvest Season Season Breakeven Average Gain Product Year State Averae Price Cost Price (loss) NCr7kg NCr/kg NCr/kg Percent 2/

Rice 1966 Goias .128 .204 .307 51 it " Parana .144 .207 .309 49 Minas Gerais .1h4 .229 .323 41 " " oSao Paulo .160 .252 .352 40 .126 30 Corn Ht it .070 .097 23 It if Parana .048 .074 .091 18 it it Minas Gerais .086 .119 .L41 Beans Parana .290 .374 .420 12 Corn Santa Catarina .066 .099 .105 6 Beans Minas Gerais .449 .576 .557 ( 3) Rice 1967 Sao Paulo .275 .416 .382 ( 8) Corn " Minas Gerais .108 .140 .128 ( 9) It if Sao Paulo .097 .134 .116 (13) Beans 1966 if It .449 .576 .487 (15) Rice 1967 Goias .246 .374 .319 (15) Corn 1967 Parana .075 .110 .092 (16) Rice It .289 .400 .329 (18) "1 " Minas Gerais .274 .396 .320 (19) Beans It if .349 .441 .338 (23) "1 " Parana .267 .339 .244 (28) Corn Santa Catarina .104 .150 .104 (31) Beans Sao Paulo .352 .445 .302 (32)

Source: Anuario Estatistico and 0 Brasil Em Numeros. 1/ Based on prices received by farmers reported by Getulio Vargas Foundation. Breakeven cost includes purchase price, simple interest at 3% a month, allowance for inflation at compound CD rates of 2.3% a month in 1966 and 1.75%p in 1967, storage at rates charged by CASEG, and, H for rice and corn, physical loss of 1% a month. 2/ Percent of breakeven cost. Table 18-3. Agricultural Manufacturing Industries: Output of Selected Products, 1950-1968.

Product Output Growth rate 1/

1950 1959 1968 2/ 1950-1968 1959-1968 1950-1968 ---- Thousand tons ------Percent------

Meat 3/ 1,112 1,465 1,654 4/ 3.1 1.5 2.e4 Lard and bacon 5/ 177 241 334 4/ 3.5 4.2 3.8

Fish, processed --- 78.3 6/ 100.4 --- 6.7 --- Dairy products

Pasteurized milk 161 334 487 7/ 8.4 5.8 7.3

Butter 24.5 28.9 25.0 7/ 1.8 -2.0 0.1

Cheese 24.1 38.6 42.7 7/ 5.14 1.4 3.6

Dry milk 7.8 33.4 59.5 7/ 17.5 8.6 13.5 Sugar 1,1403 3,108 4,,204 9.2 3.4 6.2 Vegetable oils 8/ 88 172 292 7.7 6.1 6.9

Leather 9/ 145 193 200 4/ 3.2 0.4 1.9 Paper 248 440 773 6.6 7.3 6.9

1/ Compound annual rate between dates indicated. 5/ "Bacon" consists largely of fresh pork fat. H 2/ Ecxcept as noted. 6/ 1963. 5/ Beef, pork, mutton and goat. 7/ 1966. E/ 1967. F/ For food use, excluding palm oils. 9/ Cattle, hog, sheep and goat hides. Source: Anuario Estatistico and 0 Brasil Em Numeros.

STATISTICAL ANNEX

CONTENTS

Table

1 Population, Total, Rural and Urban 1950 and 1960 -70

2 Indices of Real Product by Sector, Selected Years, 1950-1967

3 Production, Area, and Yield of Principal Crops, 1960-66

4 Agricultural 'Gages in the State of Sao Paulo, by District and Category, March 1969

Agricultural Land Prices in the State of Sao Paulo, by District and Type of Land, June 1969

6 Agricultural Land Prices in the State of Sao Paulo, by District and Size of Farm, June 1969

7 Imports of Specified Agricultural and other Commodities by Value, 1955-68

8 Agricultural Exports by Value by Major Item, 1960-68

9 Cost of Living Trends in Sao Paulo and Rio de Janeiro, 1960-69

10 dholesale Price Index Trends, Agricultural and Industrial Products, Selected Years, 1950 through 1969

11 Trends in Wholesale Price Indices for Food and Other Products, Selected Years 1950 through 1969

12 Average Prices Received by Farmers for Main Products, Selected Years 1950 through 1968

13 Apparent Consumption of Fertilizers by Region, Selected Years through 1968

14 Tractor Production in Brazil, 1960-1967

15 Agricultural Credit Granted by Bank of Brazil, 1965-1968

16 Distribution By Crop of Loans by Bank of Brazil, 1965-1968,

17 Livestock Population, Major Species, Selected Years Through 1965

1i Number of Farm Units and Area, by Regions and Districts, 1940, 1950, and 1960

19 NJumber and Area of Farm Units, by Size, 1940, 1950 and 1960

STATISTICAL ANNEX Table 1

Population, Total, Rural and Urban, 1950 and 1960-70

Total Rural Urban Growth Year Number Share Number Share Number Rate Million % Million % Million %

1950 33.1 63.8 18.8 36.2 52.0 - 1960 38.3 54.9 31.4 45.1 69.7 3.0

1961 39.0 54.3 32.9 45.7 71.9 3.2 1962 39.8 53.7 34.3 46.3 74.1 3.1

1963 41.0 53.7 35.4 46.3 76.4 3.1

1964 41.8 53.0 37.0 47.0 78.8 3.2

1965 42.5 52.3 38.8 47.7 81.3 3.2

1966 43.3 51.6 40.6 48.4 83.9 3.2

1967 44.1 50.9 42.5 49.1 86.6 3.2

1968 45.0 50.3 44.4 49.7 89.4 3.2

1969 45.9 49.7 46.4 50.3 92.3 3.2

1970 46.9 49.2 48.4 50.8 95.3 3.2

Source: USDA, ERS, Brazil's Position in World Agricultural Trade, October 1967; and Mission estimates STATISTICAL ANNEX Table 2

Indices of Real Product by Sector, Selected Years, 1950-1967

(1949 = 100)

Agri- Services Indices Year culture Industry of Transpor- Real Total Trade tation & Other Product Communic- Serv- ation ices

1950 102 211 107 107 110 105 1.07

1955 130 162 152 138 161 17h 1h8 1960 156 261 209 190 2h9 222 206 1961 168 289 234 204 258 263 227

1962 177 312 242 216 279 265 239 1963 179 312 2h9 216 301 271 2h3 196h 181 329 254 218 306 284 250 1965 206 313 257 222 311 286 256

1966 200 350 272 239 332 296 270 1967 211 360 288 249 358 31J 282

Source: Fundacao Getulio Vargas, Coniuntura Economica, Vol XIII, No. 10, 1969. BRAZIL - .R0Y2.0TwO%, MRFA A:ND MIhiD 0- PR1T:Ct?AL tGRI?ULTh2L PROLWC7C',

(?roductaon in 1,000 netr2c tons, Area *r 1,000 hectares and Yield in kilogram per hectare unless otherwise stated)

1960 196. 1962 1963 1961± 1965 1966 1967 '968

Corfee Production (1,000 bags of 60 kg.) 2,9841.8 35,860 28,703 23,153 1B,063 37,672 17,505 23,374 Area L/ 16,842 4,419.5 4,691.7 4,420.3 4,081.8 3,845.9 3,511.1 3,057.5 2,791.7 2,622.9 Yield (baga of 60 kg./ha.) 6.67 7.64 6.49 5.67 4.70 10.73 5.73 8.37 6.42 Cotton (seed) Production 1,609.3 1,828.5 1,902.3 1,956.9 1,770.3 1,986.3 1,865.4 1,692.1 Area V 1,999.5 2,930.4 3,233.8 3,456.9 3,553.7 3,764.6 4,004.4 3,897.7 3,719.8 3,902.2 Yield 549 565 550 551 470 496 479 455 512 Wool Production 22.7 24.6 25.2 26.5 28.1 29.1 27.9 28.3 30.7 Jute Production 38.9 48.2 47.5 44.1 51.2 61.6 44.5 40.3 51.2 Area 28.0 35.6 40.7 36.1 41.8 47.3 33.7 43.2 43.14 Yield 1,389 1,353 1,167 1,222 1,226 1,303 1,320 934 1,057 Other Fibers Production 30.5 34.3 34.9 34.7 34.2 37.2 41.4 36.8 Sugar cane Production 56,926.9 59,377.4 62,534.5 63,722.9 66,399.0 75,852.9 75,787.5 77,086.5 76,610.5 Area 1/ 1,339.9 1,366.6 1,466.6 1,509.0 1,519.5 1,705.1 1,635.5 1,680.8 1,686.7 Yield 42,1±35 - 43,8±48 42,639 42,228 43,698 44,486 46,339 45,864 45,420 Wood (1,000 m3) Production 102,841 107,258 112,932 123,599 129,607 135,265 130,685 135,733 Corn Production 8,672.0 9,036.2 9,587.3 10,418.3 9,408.0 12,111.9 11,371.5 12,824.5 12,813.6 Area / 6,681.2 6,885.7 7,347.9 7,957.6 8,105.9 8,771.3 8,703.2 9,274.3 Yield 9,584.4 1,298 1,312 1,305 1,309 1,161 1,381 1,397 1,383 1,337 Rice (Paddy) Production 4,794.8 5,392.5 5,556.8 5,740.1 6,344.9 7,57Y.6 5,801.8 6,792.0 6,652.4 Area V 2,965.7 3,174.o 3,3149.8 3,721.8 4,182.4 4,618.9 4,004.9 4,291.1 4,459.0 Yield 1,617 1,699 1,659 1,542 1,517 1,641 1,449 1,583 1,492 Wheat Production 713.1 544.9 705.6 392.4 643.0 585.4 614.7 629.3 356.2 Area I/ 1,241.0 1,022.2 743.5 793.5 733.6 766.6 717.0 830.9 970.1 Yield- 625 533 949 -494 877 76h 857 757 8333 02) Manloc Production. 0 17,613.2 18,058.4 19,843.4 22,248.6 214,355.6 24,992.6 24,710.0 27,268.2 29,203.2 Area I/ 1,342.4 1,381.3 1,476.2 1,617.8 1,715.9 1,750.0 1,779.8 1,9114..4 1,998.2 OQ YiLeld 13,121 13,073 13,1±2 13,152 11,194 14,282 13,884 14,243 14,615 CD 1960 1961 1962 1963 1964 1965 1966 1967 1968

Bzrnana Productior. (rl' _.n -rches) 256.3 271.5 300.7 313.1 338.2 348.5 355.9 L02.8 421.9 Area (1,000 hectax=_) 1/ 164.5 193.8 208.7 231.3 227.7 238.6 250.0 255.6 268.5 Yield (buncheA/r.cczareT 1,389 1,401 1,441 1,354 1,485 1,463 1,424 1,576 1,571

Ianroes Production 1,824 1,868.3 1,921.1 1,931 1,901 2,019 1,951 2,018 2,155 Area (1,003 hecta-es) 37.6 38.0 39.3 40.7 41.4 42.5 44.4 43-3 L44.5 Yield (fruits/hectare) 4,854.7 49,168 48,904 47,407 45,905 47,472 43,908 46,589 48,391

Water melons Production (rillion fruits) 86.7 80.5 80.1 78.9 82.2 78.9 83.1 95.3 104.0 Area (1,000 hec.-ares, 115.0 114.4 112.8 109.3 117.7 119.7 112.5 126.8 126.0 Yield (fruita/hectare) 755 703 710 722 699 660 739 751 826

Grapes Production 427.1 450.9 400.6 506.8 403.1 550.9 522.6 500.8 539.0 Area 61.3 64.9 69.6 70.6 67.6 69.0 67.2 64.5 72.6 Yield 696.6 695.1 576.0 718.2 584.8 798.6 7,772 7,762 7,i429

Tomaitoes Production 397.1 391.0 488.4 496.1 553.3 579.8 678.8 744.7 775.3 Area 28.9 29.3 34.7 36.2 38.5 39.6 38.8 41.3 44.2 Yield 1,374.7 13,332 14,059 13,706 14.4 14,625 17,518 18,024 17,534

Onions Production 210.3 192.6 226.6 194.8 241.1 225.5 277.3 250.2 272.6 Area 41.2 40.9 43.4 40.9 47.4 46.7 50.5 48.4 51.1 Yield 5,100 4,713 5,225 4,672 5,085 4,825 5,494 5,174 5,336

Garlic Production 27.3 27.3 26.6 27.9 30.9 33.2 32.7 32.8 37-3 Area 11.4 11.7 11.8 12.3 13.2 14.1 13.3 13.6 14.5 Yield 2,395 2,332 2,260 2,263 2,340 2,354 2,464 2,407 2,567

Beans Production 1,730.8 1,744.6 1,709.0 1,942.4 1,950.7 2,289.8 2,148.0 2,5L7.6 2,419.7 Area 1/ 2,560.3 2,580.6 2,716.3 2,982.4 3,130.6 3,272.5 3,324.6 3,650.6 3,663.3 Yield 676 676 629 651 623 700 646 698 661

Sweet Potatoes Production 1,283.1 1,355.7 1,447.8 1,546.3 1,597.8 1,721.4 1,912.6 2,225.7 2,120.5 Area 133.3 137.4 2145.0 152.4 158.4 168.3 175.4 185.0 182.2 Yield 9,627 9,869 10,032 10,068 10,088 10,227 10,906 12,029 11,635 z Cn

Potatoes Production 1,112.6 1,080.3 1,133.9 1,167.8 1,263.8 1,245.9 1,328.8 1,466.5 1,606.5 Area 1/ 198.8 191.3 196.2 200.0 208.7 202.3 199.3 217.4 226.7 co3 Yield 5,598 5,649 5,779 5,8L5 6,056 6,160 6,667 6,745 7,085

0 1969 1961 1962 1963 19o)j 1965 1966 l967 1968

Production 227.1 213.8 210.2 189.0 203.3 195.6 198.3 Area 30.7 29.1 175.9 168.6 28.2 27.3 27.7 27.5 27.8 27.8 Yielo 7,403 7,349 7,457 25.8 6,913 7,345 7,105 7,125 6,330 6,533 Cocoa Procuction 163.2 155.9 14 0.4 143.5 153.7 160.8 170.4 A.-ea l/ 4,708 474.3 194.7 1h9.3 464.8 469.6 487.1 482.3 455.9 473.1 Y.elc 347 329 302 432.7 306 315 333 374 412 345 Castor seed Production 224.7 207.8 225.0 240.0 310.3 355.0 Area 254.5 283.4 329.3 355.2 370.3 28L.2 307.2 347.6 394.1 347.1 360.6 Yield 883 733 792 377.0 781 893 901 949 985 982 Babassu Production 100.7 117.4 136.7 142.1 155.2 170.9 172.8 174.9 Oijicica Production 37.9 62.7 51.7 50.8 53.3 52.3 38.3 40.6 Meat (carcass weig)ht) Production: Beef and Veal 1,359.2 1,369.1 1,356.0 1,360.9 1,437.2 1,496.8 1,452.3 Pork 474.1 534.1 1,505.5 588.4 574.9 578.0 595.8 665.1 668.o Sheep and Lamab 22.1 24.8 26.7 Goat 27.3 29.8 33.8 33.9 30.7 17.0 17.6 18.8 19.9 20.6 21.1 Poultr-y 5.9 21.7 21.1 7.8 7.8 7.9 15.6 18.1 Edible Offals 50.9 25.3 30.7 531 54.0 49. 52.4 60.8 59.6 Total Meat 1,929.2 2,006.5 64.0 51040.4 2,133.6 2,226.4 2,257.9 2,320.0 Tung Production 8.3 10.1 10.7 11.9 11.9 12.5 Area 5.1 18.6 20.4 16.9 5.2 4.7 4.4 4.5 5.0 5.9 Yield 1,620 1,956 2,286 6.3 5.7 2,687 2,615 2,508 3,136 3,266 2,975 Groundnuts (unshelled) Production 408.4 584.4 647.8 603.8 469.7 742.7 894.9 Area 1 291.0 436.4 750.7 753.9 476.5 422.9 429.8 540.6 643.6 693.9 Yield 1,403 1,339 1,360 606.4 1,428 1,093 1,374 1,391 1,082 1,243 Soybeans Production 205.7 271.5 345.2 322.9 304.9 523.2 595.0 715.6 Area 171.4 240.9 313.6 654.5 3 Cn Yield 339.8 359.6 431.8 490.7 612.1 1,200 1,127 1,101 950 721.9 848 1,212 1,213 1,169 907 0 Linseed tD Production .*30.2 cn 27.7 43.6 20.4 53.7 42.1 36.4 Area 42.7 46.1 28.3 28.2 55.4 55.9 67.4 69.8 57.9 44.2, Yield 707 602 788 44.6 H 364 797 604 630 641 633 Coconuts . Production (iullion fruito) O > 436 418 429 494 503 529 Area 0,000 hectares) 73.6 76.8 691 824 691 78.8 83.0 84.0 87.7 100.9 108.7 Yie lafru.its/hectare) 5,931 5,444 5,444 114.4 6,020 5,992 6,038 6,853 7,579 6,034 Orvnies Projuction. (million fruits) 8,360 8,809 9,255 10,532 10,275 11,427 11,767 Area tl,)O0 ne-tares) I/ 112.2 118.8 125.8 12,523 13,587 .:cl (fru7tLcn- 138.7 143.8 150.3 165.4 166.7 .)7t,4:61 74,1l0 73,552 75,216 173.2 71,L55 76,054 71,157 75,103 78,459 1960 1961 1962 1963 1964 1965 1966 1967 1968

Hides Pfoduction- Cattles 170.2 170.6 168.5 169.1 180.6 188.7 180.2 188.9 ,Pig 5.8 6.8 6.8 5.8 6.3 5.8 6.8 6.6 Skins Production: Sheep 1.9 2.1 2.4 2.5 2.7 3.1 3.1 2.6 Goat 1.4 1.4 1.5 1.5 1.6 1.6 1.6 1.9 Wild cat (1,000 skins) 116.9 121.3 119.4 124.3 132.0 168.5 151.2 136.7 Peccary (1,000 skins) 252.9 292.6 324.9 351.1 393.8 41h.3 493.2 503.9 LIzard (1,003 skins) 94.4 137.2 162.4 163.0 528.5 566.0 h448 757.9 Crocodile (1,000 skins) 803.4 860.4 1,003.6 948.9 1,182.9 1,275.2 1,302.6 1,2c4.4 Tobacco (leaf) Production 161.4 167.8 187;0 206.8 210.4 248.2 228.3 242.8 258.0 Area 1/ 213.2 227.7 232.3 250.4 250.5 273.8 265.0 260.8 275.7 Yield 757 737 805 826 840 906 862 931 936 Olives Production 0.4 0.4 0.6 0.8 0.9 0.8 0.9 1.0 1.0 Area 0.4 0.4 0.5 0.5 0.5 0.6 0.7 0.8 0.8 Yield 1,024 1,047 1,283 1,451 1,556 1,476 1,305 1,324 1,299 Brazil Ilut Production 39.4 51.7 45.4 40.4 44.2 40.8 55.5 34.2 CashewhNuts Production (million fruits) 2,148 2,516 2,890 3,414 3,118 3,402 3,398 4,085 4,540 Area (1,000 hectares) 49.4 55.3 59.4 64.8 63.6 64.4 73.5 77-3 72.2 Yield (fruits/hectare) 43,459 45,452 48,625 52,653 49,047 52,826 46,245 52,856 62,897 Carnauba Wax Production 11.0 11.4 12.1 11.8 13.0 12.7 12.2 17.4 Crustacea Production 38.3 48.7 44.5 43.3 51.4 57.6 55.6 70.8 Pepper Production 4.1 4 .7 3.8 6.5 6.5 8.9 9.9 10.3 114.1 rea 2;4 2.9 3.0 3.7 3.8 4.4 4.4 4.8 5.6 Yield 1,701 i,591 1,259 1,722 1,721 2,021 2,243 2,165 2,532 Tea Production 2.7 2.8 5.0 6.1 6.2 6.2 6.5 6.h 4.6 Area 4.1 4.1 4.2 4.3 4.3 4.3 4.4 4.4 4.5 Yield 657 681 1,201 1,441 1,448 1,449 1,472 1,443 1,031 CD Yate (Erva) Production 110.7 131.7 136.0 125.1 127.8 123.3 122.8 106.5 .Rubber Production 23.1 22.7 21.6 20.6 28.3 29.3 24.3 21:2 23.0 CD

1/ Area sown up to 1965, area harvested afterwards. N;otc: Yield cal.culated from unrounded figures.

.;our.c:<=x:r. .t ttstich do lirirnl, 1963-69 issues. Agricultural Wages in the State of Sao Paulo, by District and

Category, March 1969

Permanent Worker Migrant Worker Tractor Driver Manager District NCr per day NCr per day NCr per .ionth NCr per month

Min. Max. Av. Min. Max. Av. Min. Max. Av. Min. Max. Av. Aracatuba 2.00 4.00 3.29 2.50 4.50 3.66 90.00 180.00 126.54 117.60 300.00 151.54 Bauru 2.50 5.00 3.43 2.50 5.00 1.25 90.00 200.00 122.50 120.00 350.00 192.70 Campinas 2.50 6.oo 3.92 2.50 7.00 h.4o 80.00 300.00 142.92 120.00 hoo.00 206.45 Presidente Prudente 3.00 5.00 3.55 3.oo 5.00 3.83 80.00 180.00 126.66 110.00 300.00 177.50 Ribeirao Preto 2.50 5.25 3.75 3.50 6.00 4.28 80. oo 200.00 141.1h2 117.60 500.00 219.22 Sao Jose do Rio Preto 2.00 5.00 2.97 3.00 6.00 3.75 75.00 150.00 99.50 80.00 300.00 1U1.11 Sao Paulo 1.20 5.00 3.70 2.50 6.oo 3.99 90.00 400.00 192.25 -0.00 500.00 248.25

Sorocaba 2.00 6,00 3.40 2.00 6.oo 3.76 75.00 210.00 134.96 90.00 300.00 171.53 Vale do Paraiba 2.50 4.00 3.01 2.50 5.00 3.00 90.00 150.00 125.41 90.00 250.00 155.00 Average 2.30 5.03 3.45 2.67 5.61 3.88 83.33 218.89 134.68 103.91 355.55 185.14

Source: Instituto de Economia Agricola Divisao de Levantamentos e Analises Estatisticas Sao Paulo cr

-3

Agricultural Land Pricesin the State of Sao Paulo, by District and Type of Land, June 1969

First Class Second Class District Cropland Cropland Pastures Forests Other Land

High Low Average High Low Average High Low Average High Low Average High Low Average

------NCr per alqueire 1/ ------

Aracatuba 2,000 200 1,191 1,500 150 855 1,200 L00 872 1,000 50 581 800 50 - 450

Bauru 4,000 500 1,517 2,500 400 980 2,000 300 777 2,000 300 586 1,500 100 447

Campinas 9,000 230 2,134 7,000 200 1,760 5,000 100 1,652 5,000 160 1,400 5,000 180 1,020

Sao Paulo 40,000 500 2,296 30,000 300 1,703 30,000 250 1,375 25,000 200 898 25,000 300 980

Pres.Prudente 3,000 600 2,500 500 910 2,500 400 867 1,200 250 858 1,500 150 400

Ribeirao Preto 4,000 3,300 3,000 600 1,727 3,000 400 1,428 2,500 300 903 1,800 200 857

S.J.do Rio Preto 2,500 1,000 1,600 2,000 750 1,183 2,000 600 1,138 2,000 400 823 1,500 300 708

Vale do Paraiba 4,000 900 1,160 3,000 600 1,190 2,500 600 1,025 2,000 200 566 2,000 200 427

Sorocaba 4,000 1,000 1,421 2,000 500 994 2,000 500 860 1,500 300 603 1,000 200 505

1/ The alqueire paulista is equivalent to 2.42 hectares.

Source: Instituto de Econornia Agricola (IEAJ Divisao de Levantarmentos e Analises Estatisticas, Sao Paulo

CD 1-4 H cJ,: '-4c Agricultural Land- Prices in the State of Sao Paulo, by District and Size of Farm, June 1969

District More than 100 From 50 to 100 From 10 to 50 From 3 to 10 alqueires alqueires alqueires alqueires

High Low Average High Low Average High Low Average High Low Average

------Ncr per alqueirelA-_------__------

Aracatuba 3,000 700 1,150 3,200 800 1,236 4,000 1,000 1,416 6,000 1,000 1,617 Bauru 4,500 500 1,326 4,500 500 1,464 4,500 500 1,857 5,000 300 2,094

Campinas 15,000 1,000 2,038 15,000 1,000 2,185 15,000 1,000 3,338 15,000 1,200 3,383 Sao Paulo 6,000 700 2,077 5,000 500 2,332 7,000 500 2,735 7,000 500 2,942 pres.Prudente 3,500 700 1,129 3,000 600 1,294 3,500 450 1,533 3,500 450 1,678

Rib>eirao Preto 5,500 700 1,800 6,ooo 1,000 2,056 7,000 1,200 2,323 8,000 1,200 2,408

S.J.do Rio Preto 2,000 1,000 1,740 2,000 800 1,888 2,000 500 2,219 1,500 300 2,408

Vale do Paraiba 2,750 700 1,128 2,500 800 1,700 5,000 900 1,700 6,000 1,000 2,025 Sorocaba 4,000 400 1,192 5,000 400 1,485 7,000 700 1,739 8,000 800 1,968

1/ The alqueire paulista is equivalent to 2.42 hectares.

Source: Instituto de Economia Agricola Divisao de Levantamentos e Analises Estatisticas, Sao Paulo. t-3 cn Value of Inqorts of Specified Agricult-ural and other Commodities by Value, 1955-68.

Commodity 1955-59 1960-64 1960 1961 1962 1963 1964 1965 1966 1967 1968 ------Z ------TnousandT dollars ------Wheat 119,631 163,214 142,660 138,892 160,953 164,004 209,560 135,899 167,771 178,107 181,678 Wheat flour 6,895 648 13 579 632 888 1,128 1,067 2,291 3,886 1,567 Barley "42 2,945 1,920 2,920 2,990 3,489 3,405 4,545 2,651 2,865 4,470 Malt 9,877 8,676 8,330 8,072 8,690 9,526 8,761 7,974 11,125 10,647 8,032 Hops 2,251 1,991 1,675 1,866 1,913 2,163 2,339 2,128 2,223 2,175 2,137 Milk, dry 3,635 3,580 741 2,935 3,528 5,518 5,178 6,802 10,329 12,368 8,368 Dried fruit 2,338 2,259 1,925 2,110 2,321 2,005 2,934 2,346 2,799 3,226 3,8147 Fresh fruit 10,935 10,489 6,221 7,203 11,455 15,604 11,960 12,238 15,271 24,562 33,235 Canned fruit 1,863 2,733 1,606 1,8L4 2,838 3,970 3,436 3,455 3,695 5,928 6,908 Garlic 2,386 3,711 3,016 2,017 4,448 4,695 4,378 2,525 5,604 10,034 9,978 Other vegetables 2,096 3,957 2,721 1,580 4,089 6,059 5,343 4,871 5,069 7,393 5,361 Olive oil 6,730 5,875 6,951 4,877 6,801 4,485 6,261 6,732 7,531 8,447 9,073 Other fats and oils 736 3,116 377 560 2,049 2,74 10,119 6,783 8,323 8,412 12,719 Natural rubber 12,156 11,878 21,381 11,647 10,627 10,970 4,765 1,416 2,686 3,301 6,005

Total 181,971 225,072 199,537 187,072 223,334 235,850 279,567 198,781 247,368 281,351 293,378 Other agricultural 13,888 20,495 12,625 16,920 21,616 26,961 24,352 12,059 21,843 36,006 44,163

Total agricultural 195,859 245,567 212,162 203,992 244,950 262,811 303,919 210,840 269,211 317,357 337,541 Total ititports 1,351,319 .,429,515 1,462,138 2h64093 1,075,0b7 1,186,818 V263,h51 1,096,423 1,496,215 1,667,429 2,131,859 Agricultural as percent of total imports 14 17 15 14 17 18 24 19 18 19 16

Source: Ministerio da Fazenda. e3

AG!,ICULTURAL E)JORTS OF BRlAZIL, VALUE, VOIUi~ AND UN.ITVAVJE, 1960-1968 AND PHojEcrioNS

(Va,ue i1.million U3$, Volume in thou5and metric tons, uait Value in $/metric ton)

1960 J961 1-96~2 1963 19t,L 1905 !966 1967 !968 1Q75 19150)

tffee, Beans val4e 7112.7 710.2. 62.2.7 1 72.8.3 759.7 7C6.6 762..0 702..7 7724.5 920.0 90I.0 Vc,],.meL I6,819.0 16,970.6 16,376.1 19,52.3.1 12.,92.6.2 13,0.2.2 16,831.6 16,737.5 18,4.57.7 20,&00.0 22,500.0 Vrdt qa.11a2/ L.2.4 2.1.9 39.2 38.3 50.6 52.4. 2.5.2 22.1 12.0 2.6.o 42.3. Coffee, So'luble Value .. 0.1 0.1 0.1 0.2 0.7 9.5 28.3 22.8 32..0 Vo>'-..e Ol.1 0.8 0.8 2.2.0 1.4. 2.1 lls.9 l98.6 592.6 576.9 700.0 Urat Valu.e ~/ 29.2 69.6 68.9 103.5 1,003J.0 103.5 50.0 2.7.9 2.7.8 39.5 2.8.0 2.2.0 Cc1t,"I ar-.d0t"-r Fibers Vr. I ~e L.5.6 109.7 112.2 121L.2 108.3 95.7 111.0 90.8 130.8 12.0.0 L5.0 Voluple 95.1. 205.7 215.9 221.8 217.0 195.7 235.9 189.2. 22.7.b 315.0 32.J.0 Unit Value 2.7.8 533.2 519.5 515.0 2.98.8 4.88.8 4.70.6 4.79.5 528.4. 450.0 4.25.0 SIsal .'~~~~ ~ ~~~~~~~alue22.3 22..8 24.8 36.4 37.5 2L.6 23.2 16.3 17.0 15.6 3- *Jc.hr.ae 107.9 128.7 137.1 130.0 135.6 150.2 1~52.6 127.8 11.6.1 325.0 Ur-.. Value 207.31 192.7 180.8 280.3 122.0 276.5 163.8 151.8 127.3 116.5 125.0 320.0 *ool, £r.cliuJio Tops Valu.e 1.1 0.3 0.1 2.9 23.5 15.0 25.5 19.8 15.5 22.5 7*Loue 1.1 0.4 0.1 25.5 3.3 18.5 14..3 21.8 20.9 19.2. 25.0 Unat Value 1,005.7 673.2 2.74.1 30.0 873.2 1,271.5 1,02.8.8 1,168.2 92.7.4 796.6 900.0 85 %.3 'Va bte .. 0.3 0.2. 0.2 0.3 0.5 1.0 1.2 Voha-.e .. ~~~~ 0.9 0.6 1.2. 3.0 3.0 ~~~~ ~~0.8 0.9 1.7 3.1 3.6 L.6100 10 UniL /alie 44.23.9 425.1 203.3 337.2 280.7 31.9.6 332.1 315.0 300.0 3020.0

V:o'u;z.e 0.2 0.3 0.1 2.6 6.3 b-0.1 3.4. 3.5 3.9 7.5 10.0 Ur..t Value 209.6 28-.6 200.0 207.8 235.3 250.9 257.8 252.7 199.6 200.0 180.0 Ctiner Fibers Va l-ie 2.7 3.2. 3.7 L .2 ..1I 3.2 3.2. 3.5 5.0 5.5 5.0 Vol..rne 15.6 19.7 22.9 29.0 35.2. 22.9 214.7 13.5 27.7 30.0 33.0 Ur.it Value 22.31 l7ti.. 160.1 12.5.5 105.8 139.6 230.9 256.7 179.9 185.0 165.0

ga~~~~, ~~~~..a./alLC ~~~~~~~~~52.5 65.6 39.1 62.7 33.0 52..o 80.5 80.2. 101.6 128.2 iLC.3. Volume ~~~~~700.0782.7 4.39.6 4.61.4. 252.1 709.8 1,004..5 1,001.3 1,026.2 1,009.2. 1,100V.0 Unit. Value 75.0 83.8 89.0 136.0 130.7 76.1 80.2 80.3 99.0 127.0 126.0 Forest. Prod'_ts .taru.erous (Pline) Sawnwood Valu.e 2.2.1 2.6.8 36.2 34.8 4.6.4. 51.7 56.2 50.5 71.3 59.5 Volu"e 556.9 652.-9 4.74.2 4.61.9 51.0 61-1.1 675.2. 716.2 619.7 787.6 700.0 6oc.o Uni t Value 75.9 71.2. 76.2. 75.3 75.5 76.5 78.5 81.5 90.6 85.0 85.0 H_ (.1 Proadleavedi Dogs &Saw,rdood Value 3.9 3.6 3.8 4..7 6.0 10.5 12.0 12.0 11.9 9.0 15.0 7o:uno ~73.6 72.0 71.0 77.13 86.5 101.7 118.0 135.6 111.4. 100.0 175:0 Un_t, Value 53.2. 2.9.8 542.. 61.3 69.2 103.2. 101.3 68.6 104.3 90.0 85.0 C Prepared .iooc Value 0.3 0.4 (veneer, ply-wood, etc.) 0.2. 0.7 0.9 2.0 6.1 3.5 volule 2.7 3.2 2.6 4.7 4.5 7.1 7.2. 16.5 35.0 9.5 1. 116. 130.0 - Ur t, Value 105.3~- 131.7 164..9 1241.6 189.0 282.6 631.2 24.5.6 32.9.8 275.0 250.0 0 :.eccnOZ3`tit.cj Woo.d IV Value 0.2. 0.2. 0.1 0.2 1.0 1.8 2.2 2.9 3.0 5.? L¶,- .4tc.1 ?tc.ducts Volume 3.6 2.5 0.8 2.8 .1,.2 CD l 13.0 20.9 21.2. 27.8 27.8 50.0 Li.0 U;r.it.Value 99.2. 150.7 73.0 79.8 78.5 86.1 106.9 105.2. 107.8 0. 1,50 ?...p, C.~~~~~~~~~n•.ca1Va2t~~~~~~~~~e - -~~~0.1 0.3 1.5 1.2 2.5 1.2 LI1 16.5 L.5 - - ~~~~ 1.9 9.8 ~ ~~~0.2. 23.3 17I.0 2.1 7.7 S. ?. 0T.It .~~~~~~~'-i- -~~~~~ 137.1 i2,3.8 )52l.0 11i8.2 3Wl:.7 I1,3. 6 22: 1960 l6l-iq 1962 1963 19613 1965 19tu6 196? 1968 1975 1.98

Value 0.13 0.2 .. 29.5 2.9 27.9 31.8 22.1 57.0 69.0 82.8 Volum,e 9.9 13.13 . 699.2 62.3 559.7 627.1 4330.L. 1,238.0 1,500.0 1,80N). ) Ur,it. Value 431.1 130.5 L.12.2 147.0 139.9 50.7 51.2 36.1iL6. 0 ijO.0

Uic e Value .. 13.2 4.7 -0.9 23.8 33.3 4.8 2 1.2 25.0 30.0 Voliwne 0.13 150.8 133.7 - 12.4 236.8 289. 3 31.9 158.2 250.0 30-3.0 Unit Value 643.5 87.3 1G8.7 - 68.5 100.43 115.2 151.1 1343.1 100.0 10.0

Ce,rnVeal I/ value . 0.1 .. 0.6 0.6 2.13 3.3 1.1 1.8 (2.0) (2.0) Vo1u.ne 0.5 2.0 0.9 12.13 13.6 52.1 613.2 21.6 38.2 - Urdt. Value 25.3 130.5 133.5 46.13 136.9 136.0 51.3 439.6 437.8-

Cocoa C,,ea Beam ~ Valuo 69.2 435.9 243,2 35.0 343.8 27.7 50.7 59.2 136.1 53.0 56.0o Voliniw 125.5 1013.2 55.3 6G.7 71.7 92.10 112.5 llJj.13 75,8 100.0 l:5.0 v:.itVaulue 551.14 4130.8 437.86 510.0 466.0 301.1 451.0 51.1 605S.0 530.0 1350.0

Cccoa Butter Value 2L.6 213.8 15.8 15.7 1-0.8 13.3 20.5 25.1 25.9 30.0 32.0 Volume 22.6 15.0 16.8 Li.0 10.3 17.2 21.0 21.0 18.13 25.0 32.0 Unit Value 1,090.0 9843.7 99.8 1,119.6 1,050.0 776.1 988.7 1,195.7 1,43043.4 1,200.0 1,000.0

Cecca Powtder Value 0.43 0.2 0.1 0.1 0.1 .. 0.2 0.1 0.2 0.2 0.2 Volu-ao 1.3 0.6 0.5 0.6 0.8 0.5 1.7 0.9 1.3 1.5 2..) Unit Value 290.13 260.9 2.133. 110.0 .19.7 66.2 90.7 123.0 157.9 125.0 W00.

Co.Woa cake Value 13.4 1.5 0.5 0.6 0.7 0.3 0.5 1.1I 1.1 0.9 0.9 VolAw,e 20.13 113.0 5.8 5.6 6.i 3.43 5.7 8.13 7.43 7.0 7.a vevqtatie!0,113 Unit Value 213.7 105.9 92.2 97.3 1113.4 93.6 913.1 125.2 1136.6 130.0 130.0

Ca3t.or (jlla Value 9.7 23.9 15.8 17.8 243.4 26.8 22.3 23.2 36.4 133.7 43.7 volumce 131.9 9~0.8 60.8 77.3 111.0 140.2 95.0 713.6 11-6.3 190.0 15).2. Unit Value 232.1 262.7 2133.7 230.0 220.1 1909 235.0 310.7 312.6 230.0 230.03

Babacu Oil Value - - 0.7 0.1 3.6 1.5 1.2 2.9 1.8 2.3 Vo'ume - - 3.3 0.6 12.0 5.5 13.2 9.0 7.0 9.0 Urut valun - 205.5 185.13 296.9 276.0 285.6 325.8 260.0 260.0

Oiticice val.tel 2.2 3.0 5.? 2.8 3. 3.7 3.5 1.8 1.9 3.3 3.3 voiuL,e 9.1 11.8 19.0 6.3 12.5 9.5 9.8 5.8 10.5 13.0 13.0 T ~~~~~~~UnitValue 246.8 252.2 273.6 450.5 341.8 389.6 357.0 316.3 179.2 250.0 250.0

Tung Value - 0.1 0.1 I.I. 0.2 0.5 0.2 *0.7 0.6 0.6 Volumee 1.2 0.2 1.6 0.13 1.1 0.7 - 19 2.0 2.0 Unit Value 88.9 658.1 685.1 1376.5 4380.1 292.134 357.13 320.0 320.0

Grou,r.nut Valeu - 0.1 1.8 -- 1. -- Voiwia- 0.2 8.134 - 7.8 Unit. Valua - - 216.2 210.2 --- 230.3 -

Ot)l.er Vegetable Oila Value 0.2 0.6 0.13 1.1 0.5 0.6 0.3 0.9 O.i Volume 1.2 2.5 1.5 5.2 1.5 1.8 0.13 3.6 0.5-- Unit Value 181.6 2438.0 238.13 215.8 291.1 3136.134 1, 200. 0 / 2137.2 269.!

Vec,etan1e C ae'~ds So,'beana Value - X 6.9 8.13 3.1 * 7.3 13.0 29.2 6.3 134.i 61.2 volumea 73.3 96.8 33.4 - 75.3 121.2 3013.5 65.9 4361.0 644.0 Unit. Value - 93.8 86.6 92.9 - 97.5 107.5 96.0 95.5 95.0 95.0 l

Ground.nuts Value -0.9 13.1 2.5 4.1.1 3.43 3.6 2.3 - . volu..io - 1.6 21.9 113.9 0.1 13.43 13.7 15.6 10.0 -- C~t unit value - 199.7 185.1 167.6 184.5 222.13 250.7 229.5 228.43 - -

Seeene Value - 0.2 0.7 0.2 -. .1.0 .. 0.2 0.2 Volume - 0.9 3.6 0.8 - ... 1.1 0.2 1.0 L.O,~ Unit Value - 176.9 135.5 186.6 *.. 229.7 2132.43 230.0 230.0 4- Oth.er (hlaeeda Value 0.2 0.8 2.137 3.0 I/ 0.3 1.0 0.3 0.2 0.1 0.9 0.9 (D Volume 0.43 5.0 16:5 ~/ 243.6 Y/ 0.43 6.6 1.13 0.5 0.3 LO0 1.0 Unit. V1.Ia 583.3 11,9.13 2 6313.16 11.9.L 213.2 510.6 536.5 00 1. N 1960o 91 962 1963 1961, 1965 1966 1967 1968 1.97 5 I,

Value 6.1 6.0 4.7 6.2 3. 7 7.4a 3.8 3.5 3.1 Volu2me 120.2 220.4 6.0 3.0 2122.6 253.5 103.7 170.0 84.8 96.1i 77.5 350.0 rrvit Value 50.7 149.9 42.0 200.0 4,0.2 35.8 1,3.5 44.3, 35.-9 40.0 140.0 Lo.'1) &ra,~', Juice Vle 0.? 2.2 1.4 2.9 4.7 6.7 11.6 19.0 25.0 Volane - - 0.2 5.3 3.8 5.5 13.9 28.6 30.1 50.0 7-~0 UnLit Valise - 357.4 1107.86 37.5. 7 327.1 340. 1 358.9 38q6.5 375.0 360.0c Bar±s.ae 14.6 ~~~~~~~~~~Valuie 3.8 3.2 2.9 5.8 6.3 6.3, 5.5 5.6 Vo2uhew 266.1 270.5 238.0 7.0 7.0 226.5 2L48.1 237.3 225. 3 188.0 276.1 200.0 202.0 Unit, Value 17.1 2L.0 13.6 12.9? 23.5 26.14 27.9 29.5 31.9 35.0 35.0 '.-l nue5, flried 6r Salted Vh),A 6.0 3.0 11.4 1.3 2.7 5.14 14.7 3.6 Volte 2.6 3.8 4.5 19.5 B. 4.2 4.3 13. 7 31. 3 31.2 IL,.2 14.3 Ulnit Vtalue 303.31 372.6 15.0 1. 330.7 290.2 193.7 1711.6 328.'s 252.9 162.14 250.0 252j.0 Cattle and Calfrokne, Tarn,md V..luo 0.3 0.2 0.1 .. 0.2 3.1 o.r ?repared 11.2 3.5 2.3 2.0 2.8 Vul'2ne 0.1 0.. i .. 0. 1 2.2 2.14 2.6 1.7 2.5 2.5 Unit Value 3,021.5 3,628.2 3,366.7 2,210.5 2,50-5.5 1,366.6 1, 790.2 1,36.1i.3 1,296.3 1,100.0 1, 100.0 Coat Skuns, frIedi Value 3.0 3.5 2.5 2.5 2.2 3.7 5.8 3.9 3.5 Voluime i.6 2.9 2.0 2.0 i.6 2.0 1. 5 2.1 2.6 2.1I 2.1 1.0 UnLit Value 1,781.2 1,832.3 1,592.-5 1.0 1,292.6 1,1498.0 1,735.7 2,265.6 1,867.6 1,823. 7 2,000.0 2,C20.0 Sh.eep Ikina, fr±e-d Va', .6 2.2 2.5 1.9 2.6 4.0 5.2 4.2 3.8 Volume 1.7 -.8 4.5 4.5 1.9 1.8 2.1 3.2 3.7 2.9 2.6 3.0 Ur.it Vl.alue 970.5 1,228.9 1,333.2 3.0- 1,085.5 1,287.6 1,2140.8 1,388.5 1,4A65.5 1,1453.0 1,5o0.0 ,0. R' and Ski-ns Other Than v2a) 1e.8 2.2 2.0 1.9 2.7 4.6 L4.3 5.0 t,r.t±n.iahed Cattle Volume 6.5 6.5 6.8 !. 1 1.4 1.2 1.3 1.2 1.3 1-~ 1.5 1.14 Unit Value 1, 714.-0 1,592.3 1,591.2 1.5 2.5 1,389.4 2,210.3 3,5514.2 3, 166. 4 3,1425.0 4,501.0 14,500.0 14,502-.0

Value 18.6 26.6 23.6 24.1 28.3 26.2 21.9 20.3 18.9 27.0 volume 3-1.3 46. 2 29.1, 41. 1 43.9 59.8 55.0 45.6 414.9 38.5 55.0 Un,iE Value 55-4.2 552.4 5711.7 54-9.2 60.0 4173.1i 116.5 1479. 7 451.7 O59M 490.0 490.0

uratil VIsta Valu 11.3 35.6 9.9 8.9 10.14 11.6 35.1I 10.1 15.0 '15.0 Volume 26.4 36.3 23.0 35.0 25.2 24.2 19S9 30.3 20.0 36.2 30x0 30.0 Unit VaLem 54113 110.9 430.3 352.5 43o. 9 582.4 497.4 %07.o 413.8 %0-,J.0 501.0 Cashew Note Vlalue C.4 0.3 0.14 0.8 0.9 0.7 1.8 1.4 3.4, 4.5 Vo>±'-e 0.7 L.Ž 7.0 o..6 2.11 1.2 0.7 2.8 1.5 1.3 5.0 UniLt Value 619.0 713.2 652.5 D.0o 732.7 779.3 1,OOui.2 978.8 909.5 1,010.5 900.0 900'.0 CasumewOil1 Val-ue - - - - 0.3 0.3 0.5 0.8 1.3 volume - - -- - 1.6 1.6 3.7 6.0 10.0 Urd t Value - - - - 216, 7 168.3 130.2 330.0 130.0 Q

C, t LOA ~~~Value 4,.0 1,6 1.1 1.7 3.3 8. 03 4.5 4.h2. 32.5 Vo lume 2.2 0.7 0.5 CD 2.5 3.3 8.2 9.2 3.9 2.9 15.0 25.3 Unit, Value 1,526,.9 2,279.6 2,035.3 1,136.5 984. 6 1,000.2 1,324.2 1,145.8 1,437.6 1,350.0 1, 300.0 I- Jute Value . .. 0.1 0.3 3.0 4.2 2.1 3.3 7.2 9.0 10. 6 Volwme . . 0.3 0.5 5.3 7.1 3.1 6.7 15.2 20.0 Ž.5.3 82o - Uinit V.alue . .. 503.8 600.14 554.3 594.9 668.3 1493.0 14741.1 450.0 4250 ' Sisal Va lue .. 0.2 0.6 .1.2 0.6 1.0 2.7 1.8 1. 3.3 Volume . 0,6 2.1 4. 4 .z 3.9 1.5 3.3 6.4 7.5 7.8 35.0 20.0 Uniat Value .. 333.-3 277.5 313.7 1421.9 293.8 256.4 242.4 202.6 220.0 220.0 !960 1961 1962 1963 1961 1965 1966 1967 1968 1975 1980

Oilsced Sa?e and Y.eal Scybean Va'.ue - - 4.1 4.0 7.7 14.6 10.2 18.9 L2.8 60.8 Volume - - 62.0 43.8 105.1 184.9 125.4 234.5 460.0 640.0 U.-it. Value - _ _ 66.7 91.8 73.1 78.9 81.5 80.7 93.0 95-0

Groundnut Value 3.0 6.7 5.1 6.9 1.8 8.6 11.7 11.6 7.9 11.8 12.7 Volume 53.8 112.9 83.7 107.8 28.0 121.8 154.6 148.4 102.8 1L8.0 155.0 Unit Value 56.5- 59.1 60.5 63.6 65.4 70.9 75.6 78.5 76.8 80.0 82.0

Cottonseed Value 1.3 1.4 0.2 1.9 1.0 0.3 1.6 1.6 4.5 4.1 b.1 Volu.,e 30.4 33.0 4.5 33.4 25.6 0.9 26.0 27.4 78.3 70.0 70.0 Unit Value L2.9 11.2 38.2 55.9 37.1 27.8 61.7 57.0 57.8 58.0 5s.0 Babacu Value 0.2 0.4 0.9 1.0 1.4 1.8 2.L 1.8 1.9 2.2 2.5 Volune 3.4 11.2 19.7 16.2 32.5 32.0 36.3 35.7 32.9 40.0 45.0 Urdt Value L2.3 38.5 L6.2 59.4 43.2 55.0 66.9 L9.4 56.1 55.0 55.0 Linseed Value 0.1 0.2 0.1 o.6 0.2 0.4 0.4 0.5 0.1 0.8 0.8 Volume 1.5 3.1 1.7 9.7 2.6 6.1 5.3 5.9 1.5 1.1.0 13.0 Uzut Value 75.5 52.8 55.8 66.3 65.6 65.2 73.4 82.2 79.6 75.0 75.0 meat Beef, Frozen Value 3.2 7.0 6.8 4.3 11.0 20.2 9.9 3.8 13-4 10.8 16.7 Volume 5.9 2l.1. .11.L 10.0 18.1 29.8 15.1. 6.4 26.0 18.0 27.0 Unit Value 535.0 489.0 421.6 431.9 607.2 679.6 643.5 589.6 515.5 600.0 620.0

Beef, Chilled Value 0.1 .. 0.4 0.9 0.1 0.7 0.5 0.2 L.1 o.6 1.2 Volume 0.1 0.1 1.1 2.2 0.2 0.9 0.8 0.3 2.0 1.0 2.0 Uiut Value 500.0 418.4 376.1 381.3 566.8 622.2 563.2 619.2 527.2 60o.0 620.0 Boef, Canned Value 6.5 11.7 6.9 1..0 5.4 12.4 8.1 5.7 12.6 9.5 12.8 Volume 8.1 13.4 8.9 5.3 7.4 16.8 10.5 6.5 14.5 11.0 17.0 Unit Value 799.2 876.4 771.7 685.5 728.1 734.8 767.2 869.6 868.7 865.o 870.0 Veal, Fresh, QCilled or Value - 0.1 0.2 0.2 0.5 3.4 2.6 2.8 5.7 3.0 4.8 Frozen Volume - 0.2 0.4 0.4 0.7 5.2 4z.6 4.9 11.2 5.0 8.0 Unit Value - 512.8 537.7 489.1 659.a1 657.3 560.5 566.6 508.3 590.0 600.0

Horse Meat Value - - .. .. 0.7 0.9 1.7 2.9 1.9 8.1 9.2 Volume _ - .. .. 2.2 3.5 5.4 8.1 12.6 18.0 20.0 Unit Value - - 222.2 280.0 319.2 2L9.2 317.1 361.6 390.0 450.0 460.0

3eef and Veal, Dried, Salted Value .. 0.5 2.0 o.6 0.3 0.9 2.1 1.5 6.5 2.6 5.3 and Smoked Volume .. 0.5 1.8 0.5 0.2 0.7 1.7 1.3 5.1 2.0 l,.0 Unit Value .. 982.1 1,122.4 1,154.3 1,135.1 1,230.7 1,241.1 1,148.3 1,279.6 1,323.0 1,330.0

Ertracts and Jaices of Meat Value * 1.8 2.3 1.7 1.5 3.6 6.6 3.9 1.1 2.0 4.o 6.2 Volume 0.3 0.5 0.4 0.3 0.3 0.7 0.6 0.3 o.6 1.0 1-.5 cy Unit Value 5,105.3 4,903.9 4,862.4 5,402.2 11,603.8 10,166.9 6,860.7 4,155.9 3,546.2 4,000.0 4,10.0 CD2 Animal Offalo Value 1.3 1.7 1.9 1.3 1.6 2.7 2.7 2.0 2.3 1.5 2.0 c 3 Voluina 2.1 2.8 4.1 1.8 2.8 6.6 5.4 2.6 3.7 2.5 3.5 Unit Value 633.0 607.1 4.63.4. 722.2 571.4 409.1 500.0 769.2 62L6 580.0 580.0 la0 , 1960 1961 1962 1963 1964 1965 1966 1967 1968 1975 1980

Carn3uba Wax Value 17.8 14.1 10.0 10.2 10.2 10.8 9.7 7.5 9.2 10.0 Volume 11.1 10.4 9.5 11.3 11.1 10.0 12.1 13.6 10.9 13-3 15.0 Unit Val_ue 1,6oh.9 1,359.5 1,051.2 901.1 923.8 15.0 892.2 716.5 689.2 690.5 660.0 660.0 Fish iibater Value 1.8 2.9 4.0 3.5 2.6 3.6 3.8 2.8 5.5 7.4 Volume 1.2 1.7 2.1 1.8 1.6 8.3 1.2 1.1 1.0 1.7 2.0 2.0 Unit Value 1,518.14 1,644.5 1,951.2 1,980.3 1,664.8 3,031.4 3,427.4 2,843.9 3,260.2 3,714.9 4,141.9 Shrimp Value .. 0.1 .. .. 0.2 0.9 0.5 1.2 3.5 Volme .. 0.1 4.0 14.-4 .. .. 0.2 0.6 0.3 o.9 1.6 a,. Vnit 7alu .. 1,450.0 .. .. 1,571.0 1.. 1,614.0 1,729.1 t,301.3 2,128.6 2,1478.8 2,763.7 Ten and Mate Tea Value 0.6 0.9 1.0 0.9 1.3 1.7 2.0 2.2 2.3 2.3 2.7 Volume 0.8 1.2 1.4 1.3 1.8 2.1 2.5 3.0 3-0 3.4 !4.0 Unit Valte 766.9 780.6 666.0 691.6 750.14 809.7 816.3 726.14 749.9 680.0 6Mm.0 Yate Proceased Value 4.1 44.0.1 4.1 4.2 3.8 5.0 3.9 3.7 3.2 Volume 22.6 23.6 23.8 23.1 23.0 3.2 19.6 23.8 18.5 18.1 18.0 iL.O Urnt Value 180.1 170.9 173.3 177.5 184.1 192.0 208.9 211.2 203.2 175.0 1,5.e Mate Semi-Processed Value 4.9 5.5 3.4 3.6 3.5 3.2 1.9 1.1 1.2 1.0 Volume 33.5 37.14 23.8 25.14 1.0 25.4 22.2 11.7 5.8 7.2 7.0 7.0 US-t Value 146.5 2h6.0 1141.1 140.7 139.2 1143.4 26.4.1 186.0 170.7 1145.0 21,3.0 Pepnr Value 2.5 2.9 2.2 1.8 3.0 6.0 5.4 6.2 5.6 7.7 Vo2Arle 1.9 2.9 2.8 2.3 3.4 4.0 7.4 6.4 9.7 9.7 !1.0 12.0 Unlit Value 1,303.3 991.1 802.4 791.0 751.1 815.0 847.8 640.0 574.3 700.0 700.0

Total Products Listed Value 1,1014.9 1,205.8 l,0148.0 1,232.5 1,220.14 1,300.9 1,463.9 1,340.6 1,580.9 1,920.6 2,C84.2 Other Agricultural zrports Value 29.3 27.2 25.0 30.5 33.2 48.3 47.3 43.2 34.2 50.0 60.0 Total Agricultural Exports 8/ Value 1,134.2 1,233.0 1,073.0 1,263.0 1,261.6 1,3149.2 1,511.2 1,383.8 1,6114.9 1,970.6 2,1p .2 Brazil's Total Exaorts Value 1,268.9 1,402.7 1,214.3 1,406.4 1,429.8 1,595.5 1,71;1.6 1,654.0 1,881.3

Products Listed as Percent of 97.4 97.8 97.7 97.6 97.4 Agricultural Sxports 96.4 96.9 96.9 97.9 97.5 97.2

Agricultural Exports as 89.4 87.9 88.4 89.8 Percent of Total Ebxports 88.2 84.6 86.8 83.7 85.8

._ )'otest .. 'es. than 5 metric tons _. F~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~i3C/3 or S thousard US$. B,fBrazil's agricultural V1 ThoLusand bags. exports includet live animals; primary materials, in the rough and prepared of J US3/bag. animal origin and of vegetable origin; textiles; oils, fats, greases and their derivatives of Green Equivalent, Thousand bags. animal and vegetable origin; foodstuffs and beverages; manufactures of rubber, ebonite, and such; manufactures Exclusive or Pine. of wood and cork; paper and a 3 articles of paper; textile products; essential oils Aninal feed. of vegetable or resinoid origin. . H o/ High Unit Value due to Copaiba Oil. lainlyM/ Babacu Seed. p ' 0B Sources 1BGE, Ar.uario &'tatistico do Brasil and Fstatistica do Caimercio Exterior do Bras4l various issues. \fi

STATISTICAL ANNEX Table 9

Cost of Living Trends in Sao Paulo

and Rio de Janeiro, 1960-1969

(1963 = 100)

Sao Paulo (City) Rio de Janeiro Year General Food General Food

1960 27.3 28.3 29.2 27.7

1961 37.8 38.1 39.0 37.4 1962 57.6 60.2 58.0 6o.h

1963 100.0 100.0 100.0 100.0

1964 187.0 196.4 193.0 196.3

1965 302.4 294.8 320.0 288.6

1966 443.4 436.6 452.3 400.8 1967 574.4 538.7 591.0 489.5

1968 713.5 650.3 719.9 552.4

1969 819.4 738.7 828.8 638.6

1 March

Source: Fundacao Getulio Vargas ,Conjuntura.Economica. STATISTICAL ANNEX Table 1OY--

Wholesale Price Index Trends ARricultural and

Industrial Products, Selected Years, l950'4nd 1960-69

T1953 U lU)

General Agricultural Industrial Year -. All All General Coffee Excluding Excluding Coffee Coffee All

1950 66 64 64 69 59 68

1960 399 447 362 208 438 452

1961 552 627 489 249 605 644

1962 846 941 785 375 950 933

1963 1468 1660 1295 519 1608 1711

1964 2813 3010 2583 1842 2882 3137

1965 4254 4622 3677 2431 4180 5065

1966 5820 6504 5194 2434 6307 6701

1967- 7296 8232 6169 2733 8027 81432

1968 9051 10135 7608 3854 9224 10993

1969 V 10962 12170 9083 5168 10768 13489

1/ August

Source: Fundacao -Getulio Vargas Conjuntura Economica. STATISTICAL ANNEX Table I1

Trends in Wholesale Price Indices for Food

and Other Products, Selected Years 1950 through 1969

(1953 - 100)

-Food Year Total Excluding Vegetable Excluding Animal Beverages and Coffee Origin Coffee Origin Spirits

1950 63 57 65 56 51 80

1960 356 411 304 357 508 414

1961 475 561 382 458 755 538

1962 762 903 626 777 1157 867

1963 1265 1538 1059 1384 1814 1595.

1964 2554 2814 2286 2553 3218 3187

1965 3683 4140 3138 3564 4966 5189

1966 5201 6211 4148 5180 8008 6997

1967 6428 7817 5174 6643 9944 9290

1968 7625 9084 6253 7696 11237 12665

1969 1/ 9437 11088 7988 9684 12950 15502

1/ August

Source: Fundac,ao Getulio Vargas C.untura Economica. Average Prices Received by Farmers for Main Products, Selected Years

1950 through 1968

Year Seed Peanuts Rice Banana 2/ Potatoes Cocoa Coffee Sugar Beans Leaf Oranges Manioc Corn Wheat Cotton in Shell cane Tobacco ...... NCrj per ton .. . .. 1950 4,86 2,20 1,68 6,22 1,84 6,74 5,32 0,10 1,80 6,48 0,10 0,25 0,93 2,45

1955 8,29 3,49 4,60 14,38 3,71 20,79 10,89 0,19 5,75 11,76 0,30 0,45 2,40 6,43

1960 26,58 15,83 10,84 42,58 8,75 49,02 18,58 0,52 23,08 42,43 0,72 1,35 5,66 16,44

1961 36,96 18,67 12,50 61,53 10,50 64,08 38,47 0,73 21,45 54,38 0,92 2,09 7,61 22,11

1962 54,22 24,77 29,57 99,441 20,78 91,07 44,62 1,18 55,10 83,54 1,38 4,18 14,78 40,41

1963 75,06 46,98 53,04 173,68 33,35 146,58 103,61 2,63 70,45 113,17 2,31 5,27 17,40 63,68 1964 167,75 132,31 76,87 361,54 46,10 310,26 236,38 5,22 92,53 237,23 5,52 8,00 40,09 139,33

1965 2148,35 155,33 82,93 481,34 69,10 415,58 227,04 7,63 141,40 357,85 7,34 12,37 51,99 191,22

1966 274,62 203,62 149,15 642,37 167,35 573,70 268,08 8,67 268,92 410,99 10,40 19,14 71,29 253,92

1967 361,19 185,42 206,44 778,80 158,56 735,54 341,11 10,55 258,63 589,63 13,27 25,90 92,51 302,26

1968 457,91 274,33 250,52 1011,89 1143,37 1472,77 551,96 13,60 299,97 804,58 17,50 32,08 105,54 364,52

1J 1,000 Bunches.

2 1,000 fruits

Source: Servico de Estatistica da Producao (SEP), Ministerio da Agricultura. STATISTICAL ANNEX Table 13

Apparent Consumption of Fertilizers by Region, Selected Years Through 1968

Year and Region Nitrogen Phosphate Potash (N) (P 205) (K20) ------Thousand tons of Nutrient ------

1950 North-Northeast Center-South - Brazil 14 21 24 1955 North-Northeast - _ Center-South - _ _ Brazil 23 89 48 1960 North-Northeast 5 13 6 Center-South 60 115 100

Brazil _ 12d a 1965 North-Northeast 4 10 8 Center-South 66 110 92 Brazil 705 IM l0 1967

North-Northeast 11 13 17 Center-South 92 192 120

Brazil _53 205 137 1968

North-Northeast 12 14 12 Center-South 132 259 172 Brazil I_ 273 l

Source: Sindicato da Industria de Adubos e Colas do Estado de Sao Paulo. Tractor Production in Brazil, 1960-1967

Tractors Years Micro- Motorized Total Light Medium Heavy Caterpillar Subtotal tractors Cultivators

...... o..... o-o ...... Number of Units

1960 - 37 - 37 - - 37

1961 25 1,574 80 - 1,679 _ 751 2,430

1962 1,984 4,779 823 _ 7,586 - 1,240 8,826

1963 3,990 4,179 1,739 9,908 - 1,110 11,018

196h 1,329 7,947 2,261 - 11,537 - 1,710 13,247

1965 241 5,810 2,070 8,121 280 2,403 10,804

1966 96 6,668 2,305 13 9,082 291 3,178 12,551

1967 57 4,077 2,077 73 6,284 72 2,159 8,515 1968 26 3,220 1,643 42 4,951 57 1,734 6,742

1/ For nine months.

Sources Associacao Nacional dos Fabricantes de Veiculos Automotores, Sao Paulo. M

HI H 1-4 Agricultural Credit Granted by Bank of Brazil (CREAI)¾ l965-1968

Item 1965 1966 1967 1968 Number Amount - .Number Amo-unt Number Amount Number Amount (Thousands) (Million (Thousands) (Million TThoiusands) (Million (Thousands) (Million NCr) NCr) NCr) NCr) Crop Loans

Loans for Production 3 372 299 5 3L8 818 332 1,177 (a) Planting and Cultivation of Crops 298 367 293 517 308 800 321 1,156 (b) Extractive Vegetal Prod. 1 3 1 3 1 6 1 4 (c) Storage and Marketing i 2 1 6 3 8 2 8 (d) Others - - 4 4 6 4 8 9 loans Under Minimum Price Program 1 34 2 85 13 163 12 220 Loans for Investments 66 10 75 196 76 252 22 X (a) Farm Expansion L 1 3 v 2 -i 3 10 (b) Farm Improvement 24 26 27 45 29 69 40 115 (c) Purchase of Machinery and Work Animals 23 62 33 124 36 155 39 229 (d) Purchase of Automotive Vehicles 3 7 5 18 4 16 5 23 (e) Others 12 4 7 4 - 6 5 6

Special Operations - OERCA Prograi" - - 12 5 3 Total Crop Loans 36 509388 868 412 1.268 437 1,780

Livestock Loans -

Loans for Operating Costs- 11 11 16 40 17 57 26 90 Loans for Investments 34 54 51 146 53 188 77 326 Total Livestock Loans 65 67 186 70 245 103 416 Cooperative Loans / / 67 87 Total Loans - Agriculture 412 608 1500 2,28228 348210

1/ Carteira de Credito Agricola e Industrial. 2/ Grupo Executivo de Racionalizacao da Cafeicultura. 2/ Less than 1,000 Source: Bank of Brazil, Annual Report l967 and 1968 Distribution by Crop of Loans by BanK of Brazil, 1965-196d

1965 1966 1967 1968 Crop Number Amount Number Amount Number Amount _Number Amount (fhousands) (Million NCr) (Thousands) (Million NCr) (Thousands) (Million NCr) (Thousands) (llion NCr)

Cotton 69 .9.3 53 98 48 132 51 232

Rice 47 89 46 158 63 274 77 421

Cocoa 3 8 3 7 3 13 3 24

Coffee 18 37 28 105 20 115 22 142

Sugar Cane 5 24 4 43 4 54 5 70

Beans 14 13 17 18 20 41 10 30

?ianioc 18 6 17 10 18 16 16 18

Corn 77 67 87 104 106 190 93 210 Soybeans 2 8a 5 SM5 36 6 45

Wheat 7 17 7 25 8 42 11 70

260 362 267 587 295 913 294 1,262

Other Crops 45 48 52 90 48 109 54 145 Unallocable V 62 99 69 191 69 246 89 373

Total Crop Loans 367 509 388 868 412 1,268 43 1,780

lJ Loans for farm improvement, purchases of machinery, work animals and vehicles cannot be allocated to the various crops

Source: Bank of Brazil, Annual Report.. 1967 and 1968. SBATISTICAL ANNEX Table 17

Livestock Population, Major Species- Selected Years Through 1968

Year Cattle Hogs Sheep Goats -- - million head ------

1950 53 26 14 9 1955 64 39 18 10 1960 74 48 18 11 1961 76 50 19 12 1962 79 53 20 12 1963 86 56 21 13

1964 84 59 22 14 1965 91 63 22 14 1966 90 62 22 14 1967 90 63 23 14 1968 92 66 25 15

Source: Servico de Estatistica da Producao (SEP), Ministerio da Agricultura. SrATISTICAL ANNEX Table 18

Number of Farm Units and Area, by Regions and.States.1940, 1950 and 1960

Regions and Establishments Area States - - 1940 1950 1960 1940 1950 1960 - (----(thousands)------thousand ha)- North Rondonia -- .5 1 694 303 Acre 1 22 4 6,915 8,898 9,386 Amazonas 22 15 48 8,501 5,593 6,399 Roraima -- .4 .9 -- 596 870 Para 58 60 83 10,082 6,593 5,253 Amapa -- .5 1 -- 734 1,242

Northeast Maranhao 95 95 263 3,009 9,538 8,216 Piaui 32 34 87 4,881 7,877 9,107 Ceara 93 87 123 8,606 10,201 10,944 Rio Grande do Norte 34 34 50 3,321 3,769 3,686 Paraiba 65 69 118 3,548 3,607 4,070 Pernambuco 123 172 260 3,876 5,023 5,925 Alagoas 33 52 62 1,437 1,483 1,907 East Sergipe 35 43 65 871 1,112 1,469 Bahia 226 258 381 13,408 15,733 17,666 Minas Gerais 285 265 372 33,476 36,634 38,339 Serra dos Aimores .8 4 22 59 352 884 Espirito Santo 42 44 55 1,988 2,525 2,889 Rio de Janeiro 48 40 52 3,316 3,177 2,976 Guanabara 8 5 6 49 41 47 South Sao Paulo 253 222 317 18,580 19,008 19,304 Parana 64 89 269 6,252 8,033 11,385 Santa Catarina 88 104 158 4,862 5,318 5,949 Rio Grande do Sul 231 287 380 20,442 22,069 21,659

Center-West Mato Grosso 10 16 48 20,707 29,017 30,970 Goias 56 64 111 19,604 24,588 28,877 Distrito Federal -- -- .3 -- -- 139

Totals by Region North 81 7.8 138 25,497 23,108 23,453 Northeast 477 544 962 28,609 41,497 43,855 East 645 661 954 53,167 59,574 64,270 South 636 702 1,124 50,136 54,h28 58,297 Center-West 66 80 159 40,311 53,605 59,987

BRAZIL 1,905 2,065 3,338 197,720 232,211 249,862

Source: Instituto Brasileiro de Estatistica, Servico Nacional de Recenseamento. Number and Area of Farm Units, by Size, 1940, 1950 and 1960

Size of Farm Unit Number of Farm Units Area -in Hectares - 19 - 9q 1960 190 19Q 1960 --- Thousand• ------Thousand-hi ------

Less than 10 654 711 1,495 2,893 3,025 5,925

10 to 49 370 833 1,218 18,855 20,185 28,503

50 to 99 204 219 272 14,256 15,376 19,062

100 to 999 254 268 315 66,184 75,521 86,029

1,000 to 9,999 27 31 31 62,025 73,093 71,421

10,000 or more 1 2 2 33,505 45,009 38,893

Not declared 3 a/ 4 n.a. n.a. n.a.

Total 1,905 2,065 3,338 197,720 232,211 249,862

Note: Numbers may not add up to-the total because of rounding. a/ Source: Instituto Brasileiro de Estatistica, Servico Nacional de Recenseamento.