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BRAZILIAN COOPERATION AND INVESTMENT IN AFRICAN AGRICULTURE
JOHN WILKINSON
Report prepared for Actionaid.
Rio de Janeiro, Novembro de 2013
INTRODUCTION
In recent years Brazil has emerged as one of the bigger Southern countries engaged in what is traditionally known as aid – South-South cooperation for Brazil and other large developing countries. Given its size and the size of its own agricultural sector – over 5% of GDP and involving roughly 20% of Brazil’s population – it is perhaps not surprising that agriculture is a major area of focus for Brazil’s involvement on the African continent.
But Brazil is home to two distinct and often conflicting agricultural traditions. The first, which includes the majority of the people who are involved in farming is smallholder family farming. In recent years this tradition has been influenced by agroecology such that even those farmers who have access to modern technologies (hybrid seeds, GMOs, chemical pesticides and fertilizers) are reluctant to use them, preferring instead to use farming techniques that may date back centuries.
The other is the so-called green revolution agriculture that came out of an “industrialized” model developed in the United States. While the other model may account for most of the people involved in agriculture, this model accounts for most of the money – Brazil is expected to export more than a billion gallons of ethanol (mostly from sugar cane) in 2014.
Brazil has expertise in both of these areas, but which does it plan to export to Africa? And how will the export of different agricultural models affect life for communities in the countries where Brazil is providing support? These are some of the key questions we hope to address in this paper.
SECTION ONE: BRAZIL AND SOUTH-SOUTH COOPERATION
While remaining a recipient country, Brazil has increasingly positioned itself, since the turn of the millennium and more particularly since the beginning of the Lula Presidency in 2003, as a new “partner in development” (the term donor is rejected) within a framework of South-South “cooperation for development” strategies and policies. Its cooperation initiatives have a specifically Brazilian content but have also become integrated into a broader vision of emerging country cooperation primarily concretised in the BRICS summits, the latest of which in 2013 has agreed on the formation of a BRICS Development Bank.
This new style horizontal, South-South cooperation oriented to development set itself off from the traditional North-South cooperation of the countriesgrouped in the Development Assistance Committee (DAC) of the OECD, seen to be hierarchical or vertical and focused on aid rather than development. Around the turn of the millennium the two groups of countries appeared to be evolving in diametrically opposed directions. The BRICS countries´ notion of cooperation for development, combining traditional “aid-style” activities with financing, investment, trade and business involvement, contrasted with the DACs moves to “untied aid” and financing only on especially favourable or “concessionary” terms.
North-South cooperation, however, was at the same time being subject to radical internal review. In a series of meetings beginning in Rome and then consolidated in Paris and Accra, the DAC Group established sustainable development as the goal of cooperation and defined a number of principles for the future government of cooperation, highlighting the protagonist role of developing countries in the definition of priorities, mutual partnership, a focus on results and the need for transparency and accountability. It also opened its forum to civil society participation.
These shifts prepared the way for a growing convergence between North-South and South-South cooperation which was to be formally consolidated in the Busan Declaration for Effective Development Cooperationof 2013 whose signatories included the BRICS countries, albeit under the proviso of assuming “differential commitments”, the most important of which was voluntary adherence to the goals and principles.
This macro level convergence also finds its expression at micro level in the emergence of trilateral projects, to be discussed below, involving Northern donors, emerging economy country cooperation and developing country(ies).
There is little doubt that the inauguration of the Lula government in 2003 saw an important shift in the Brazilian Government´s international focus with the African continent assuming centre stage. Most of the literature on this subject highlights the number of visits to African countries by the Brazilian President and the Minister for Foreign Affairs, often with significant government and private sector delegations. In the wake of these visits, embassies in African countries were doubled, a tendency which was reciprocated with a similar increase in African country embassies in the Brazilian capital.
This focus, however, was part of a broader concern with Brazil and “the South´s” role in multilateral forums and negotiations. Two years earlier the Doha “development round” had begun, and there was widespread dissatisfaction with Northern country dominance as expressed in the G8 and particularly the restricted number of permanent members of the UN Security Council, to which both India and Brazil aspired. These two countries along with South Africa formed the IBSA Dialogue Forum in 2003 to promote coordinated action by these countries´ foreign ministries in multilateral negotiations and the Forum was instrumental in the creation of the G20 later in the same year.
Although its formalization would only occur with the Summit in 2009, the notion of a new global economic pole provided by the large emerging countries, christened the BRIC (Brasil, Russia, India and China), later BRICS (with the inclusion of South Africa), was already being popularized as from 2001. For its part, the Millennium Goals placed the African continent as the decisive challenge and its,then, fifty four countries with their very active presence in the UN structures provided a decisive base and lobby for the emerging countries´ aspirations to greater clout in the multilateral arena. A key result in this direction was to be the election, in 2011, of Jose Graziano da Silva, who had been responsible for Brazil´s Zero Hunger programme, to the head of the FAO, the UN Food and Agriculture Organization based in Rome.
As the first decade of the millennium progressed, Brazil´s general geopolitical concerns became complemented with a specific, multifaceted agenda. Already in 2003, the IBSA Forum registered Brazil´s concern to promote biofuels which had been given a decisive impulse with the launching of the flex-fuel car in Brazil in the same year. Ethanol from sugarcane was increasingly presented as a key development strategy for African countries, a position reinforced by its characterization as “good ethanol” in contrast to the bad ethanol based on corn or wheat. In addition to its flagship role as a development model, the promotion of ethanol in Africa became an attractive option for Brazilian investors interested in accessing the EU market, without tariff barriers. The Brazilian National Development Bank (BNDES) has played a leading role in the financing of these biofuels projects.
With the success of Brazil´s Zero Hunger and Family Grant conditional cash transfer programmes in raising some 29 million above the poverty line and reaching/exceeding the Millennium Goals, these programmes became presented as strategies appropriate for the global struggle against poverty and food insecurity, particularly on the African continent. As the decade progressed, these initiatives were accompanied by the promotion of broader programmes for family farming judged to have been successful in Brazil – the public purchasing programme for family farm products (PAA), the 30% public school meals market reserve for products from the family farm sector (PNAE), and the “More Food” (MaisAlimentos) programme comprising credit lines for farm improvements, particularly equipment and machinery geared to increasing productivity.
Brazil has traditionally developed a special relation with the Lusophone countries in Africa, and Angola and Mozambique respectively are the principal recipients of investments and technical cooperation. Nevertheless, Brazil´s interests extend to the African continent as a whole. EMBRAPA, Brazil´s national agricultural research and development organization, set up an Africa office in Ghana in 2006 and has been responsible for implementing technical cooperation activities in a large number of African countries as we shall see below. In 2009, in the wake of the food prices crisis and the unfolding of the broader financial crisis the preceding year, the Brazilian President laid out an ambitious proposal for cooperation at the Africa Union summit. This in turn led to the Brazil-Africa Dialogue meeting in Brasilia in 2010 where Brazil´s agricultural experience and public policies were debated and cooperation agreements signed with a range of African countries.
Brazil presents itself as a model both for large-scale agribusiness and for family-farm-based development and food security. The degree to which the two are compatible is hotly contested by members and representatives of each but both models have their own institutional expressions and policies, with a Ministry of Agriculture (MAPA) broadly associated with agribusiness and a Ministry of Agrarian Development (MDA) dedicated to the promotion of family farming, particularly through the PRONAF, the national family farm programme, created along with the MDA in 1999. This dualism, therefore, is not associated with any one political party and the family farm is a legally constituted social category in Brazil.
With the election of Graziano da Silva as director-general of the FAO, Brazil´s family farm and food security policies have become the basis of an all-Africa cooperation for development programme, involving the World Food Programme, and the UK Department for International Development (DFID), agreed on in 2011 and with pilot projects planned for some 10 African countries.
In addition to its promotion of biofuels, Brazil has also become recognized as, and sees itself as, having developed a general model of agro-industrial development for savannah regions based on its transformation of the Brazilian “cerrado” region into the world´s most dynamic agribusiness pole for grains/oils. This is also seen to be particularly relevant for the African continent which is considered to have an abundance of similar lands. The role of Brazilian R&D, developed by EMBRAPA, is recognized to have been decisive in adapting these soils to grains production. Japanese aid to Brazil was also central to the financing of pilot colonization projects in different regions of the cerrados during some 20 years. This model is now being promoted in a tripartite arrangement with Japan again as a partner for the 14 million hectares of savannah land located along the Nacala corridor in Mozambique.
Brazil, therefore, is centrally involved in the promotion of cooperation for development in Africa and with this aim offers its whole range of agricultural policy and strategy options, whether promoting the family farm and food security, biofuels, or agribusiness more generally. At the same time, while African countries have become the principal global focus of food security and agricultural development concerns, this continent has also been identified as the last agricultural frontier, attracting waves of investment projects. Such investments, widely dubbed as “land grabbing”, are provoking heated debates over notions of “available land”, traditional farming and food provision practices and land tenure rights. In analysing Brazil´s presence on the African continent we will be particularly concerned with evaluating impacts on land use and land tenure and the degree to which Brazil contributes or not to the “land-grabbing” phenomenon.
SECTION TWO: A PROFILE OF BRAZILIAN COOPERATION
2.1 BRAZILIAN COOPERATION: DIMENSIONS AND COMPONENTS
Brazil describes its solidarity diplomacy and development cooperation as demand driven, non-conditional and without commercial interests. This may be true with regard to a large part of humanitarian aid, student grants, technical cooperation and contributions to multilateral organisations, the traditional categories associated with aid. Even here, though Brazil has shifted its focus from isolated initiatives to what are called “structuring projects” such as the “Cotton 4” project offering Brazil´s experience in reviving its cotton production after the decimating effects of the cotton boll weevil, to Mali, Burkina Faso, Benin and Chad. Such projects clearly imply a more proactive organization of the “supply” side of cooperation and, in this particular case, also stem from mutual trade interests in contesting US cotton subsidies.
Also, as we have seen, in addition to these projects, cooperation is increasingly taking the form of adapting Brazilian policies on food security and family farm based agriculture to the realities of different African countries and regions. These programmesclearly involve elements of conditionality, with the “MaisAlimentos” programme, for instance,providing credit for the exclusive purchase of Brazilian equipment and machinery and specifying in addition the type of machinery permitted. Purchases, however, are provided on a concessionary basis via the Ministry of Industry and Trade´s (MDIC) PROEX credit line administered by the Banco do Brasil.
The promotion of biofuels and agriculture in savannah regions has a more clearly commercial component and receives financing from the BNDES on favourable but not concessionary terms (as would be required by DAC cooperation principles). These activities are developed in close cooperation with private actors and will be discussed in more detail below.
Brazilian technical cooperation is coordinated by the Brazilian Cooperation Agency (ABC), a Department of the Ministry for Foreign Relations (MRE) which was constituted when Brazil was exclusively a recipient of donor cooperation. A first official review of international cooperation activities was prepared by IPEA in 2010 entitled: Brazilian Cooperation for International Development (CooperaçãoBrasileira para o DesenvolvimentoInternacional, 2005-2009). This study defined cooperation as involving “entirely non-reimbursable funding” comprising four categories: humanitarian aid, student grants, contributions to international bodies and regional banks, and technical cooperation.
In the period under study the total amount of cooperation was calculated at some US$1.4 billion, (R$2.9 billion), the result of international cooperation actions by over a hundred federal public bodies. 76% of these resources corresponded to contributions to international organizations and regional banks with the remaining 24% divided between humanitarian aid, student grants and technical cooperation. On an annual basis cooperation doubled during this period in current values and increased by 50% calculated in constant values. Humanitarian aid is overwhelmingly directed to Latin American countries, whereas aid, in the form of student grants, includes special programmes for Mozambique and more generally for Portuguese speaking African countries (CPLP).
Technical scientific and technological cooperation activities (TSTC), developed within a framework of “solidarity diplomacy”,accounted for over R$250 million during this period with values in 2009 tripling those of 2005. 27% of expenditures were directed to CPLP countries on a bilateral basis and Africa, Latin America and the Caribbean accounted for over two thirds of this cooperation. With regard to agriculture of relevance to Africa, the IPEA study singles out cooperation on cocoa in the Cameroons and the Congo, and, as an example of the shift to structuring cooperation, the initiatives on agro-ecological zoning and agroenergy, the latter involving two “Ethanol Weeks” with the participation of 111 Brazilian government technicians and 58 developing countries representatives. The Table below shows that as from 2009 TSTC cooperation with Africa was on a par with Latin America and was increasing much faster.
Trilateral cooperation activities involving a northern donor are also being adopted. These have the advantage of additional access to funding, which becomes more important in the case of structuring cooperation projects, and can build on prior experiences of cooperation when Brazil was a recipient country (the Mozambique savannah initiative in partnership with Japan would fit into this category). At the same time, they might call in question the distinctiveness of South-South cooperation.
Agriculture is the largest single item of TSTC accounting for some 22% of total expenditure. Such cooperation takes the form of Brazilian researchers and technical personnelworking in situ with developing country partners, primarily from EMBRAPA although as many as 20 organizations during this period have been involved. As we have seen above, such technical cooperation is shifting from isolated demand-driven cooperation towards structuring projects. Cabral (2011), in her study of Brazil-Africa cooperation includes also a reorientation from individual training to the adaptation of Brazilian public policies to the African setting, the promotion of concessional credits and the increasing importance of tri-lateral cooperation initiatives.
Excluded from the IPEA study (but to be included in a subsequent updating) is the increasingly important category of economic and financial cooperation, which (following Cabral, 2011) includes: the pardoning of debts (calculated at US$474.2 for the period 2005-2009), concessional credit for Brazilian exports (some US$1.7 billion in the same period) and cash donations. The former two are linked since debts are an obstacle to receiving credit. The figure for concessional credit may also include credit supplied by the BNDES which has become increasingly important, especially the “Exim Automático” whereby BNDES takes on the credit risk of the banks involved and the political risk of the importing countries.
Information specific to cooperation with Africa which also includes data for 2010 is contained in the ABC on-line publication, Brazilian Technical Cooperation (2011). According to this publication, Brazil programmed some US$71 million for the three years 2010-2013 involving 126 bilateral projects in execution with 42 countries, 82 of which in CPLP countries, and two pluri-lateral, “structuring” projects, the Cotton 4 mentioned earlier, and one concerning the storage and use of native seeds. The budget of US$22 million for 2010 was more than twice that of the previous year. This document insists that cooperation is demand driven but translates this as being “responsive to national priorities”. It then provides a detailed description of two Brazilian programmes – the food acquisition programme (PAA) and the school meals programme (PNAE) - which became strategic focuses of cooperation initiatives in the wake of the 2010 Brazil-Africa Dialogue meeting in Brasilia.