Increase of Agribusiness in the Brazilian Amazon: Development or Inequality?
Increase of Agribusiness in the Brazilian Amazon: Development or Inequality?
Oliveira, Rosana Cavalcante de;de Souza e Silva, Rogério Diogne
2021-12-14 00:00:00
Article Increase of Agribusiness in the Brazilian Amazon: Development or Inequality? Rosana Cavalcante de Oliveira * and Rogério Diogne de Souza e Silva Faculty of Exact Sciences and Technology (FACET), Mato Grosso State University (UNEMAT), Sinop 78555-000, Brazil; rogeriodss@ieee.org * Correspondence: oliveira.rosana@unemat.br Abstract: The growing global demand for soybean production combined with its increased market value could result in a new supercycle for this commodity. For Brazilian agribusiness, there has been an opportunity to increase exports, particularly in soybean production, in recent years, and therefore, soybean production has been expanding more and more across the states of the Brazilian Amazon. Soybean is the most important grain crop among temporary crops in the Brazilian Amazon; in 2019, it reached a value of USD 21.78 billion, using a planted area of 124,947 km (about 55% of the planted area). At the same time, overall deforestation increased significantly in recent years: 2 2 10,897 km in 2019 and 9811 km in 2020. To study these changes, economic, social, and environmental sustainability indicators were identified and analyzed using a regression model, and changes in the main economic and socio-environmental indicators were observed that identified a strong positive correlation between agricultural GHG emissions and soybean-planted area. The impact on the local population was also analyzed between the years 2000 and 2019, and there was a mismatch between the population growth rate and the growth rate of the harvested area, which resulted in the displacement of the populations to the cities, and identified a strong positive correlation between the unemployment rate for young people and the soybean-planted area. In this context, this paper Citation: Oliveira, R.C.d.; de Souza e presents an analysis of the correlation between soy expansion and the main economic indicators and Silva, R.D. Increase of Agribusiness in socioenvironmental impacts in the Brazilian Amazon. the Brazilian Amazon: Development or Inequality? Earth 2021, 2, Keywords: amazon; agribusiness; environmental impact; economic indicators; soybean 1077–1100. https://doi.org/ 10.3390/earth2040064 Academic Editor: Charles Jones 1. Introduction Received: 20 September 2021 The slogan “Brazil–the world’s breadbasket” was started in the Vargas era, covering Accepted: 12 December 2021 the period from 1930 to 1945, during which Getúlio Vargas ruled Brazil and Brazil exploded Published: 14 December 2021 onto the world agricultural scene. The importance of the agricultural and mineral sector has only increased since then, as Brazil is currently the largest producer and exporter of Publisher’s Note: MDPI stays neutral soybeans in the world. To support this development, policy was created in 1939 by the with regard to jurisdictional claims in Agronomic Institute of the North (IAN), whose institutional research agenda during these published maps and institutional affil- decades included: polyculture, the excavation of siltation channels along the Amazon iations. River, the cultivation of food crops, and the development ranching. IAN predicted that the Amazon would be the world’s breadbasket and a solution to world hunger. The main instrument of this transformation would be the knowledge of its ecology through research related to the so-called “forest ecosystem theory” [1]. Copyright: © 2021 by the authors. Nowadays, the expansion of soybean production in Brazil has been due to the strong Licensee MDPI, Basel, Switzerland. global demand for soybeans, especially in China. The soybean-producing areas are in- This article is an open access article creasingly expanding in the states of the Brazilian Amazon. The Amazon went through distributed under the terms and different border-expansion cycles that were fostered by government colonization plans conditions of the Creative Commons and based on primary resources such as wood, ore, extractive products, and agribusiness. Attribution (CC BY) license (https:// In the 1970s, colonization encouraged small producers with up to 100 hectares; currently, creativecommons.org/licenses/by/ large soybean monocultures have concentrated within a few groups [2,3]. 4.0/). Earth 2021, 2, 1077–1100. https://doi.org/10.3390/earth2040064 https://www.mdpi.com/journal/earth Earth 2021, 2, FOR PEER REVIEW 2 Earth 2021, 2 1078 In the 1970s, colonization encouraged small producers with up to 100 hectares; currently, large soybean monocultures have concentrated within a few groups [2,3]. Current development strategies for the Brazilian Amazon have been following the Current development strategies for the Brazilian Amazon have been following the regional economic integration perspective with a continuous model of economic cycles regional economic integration perspective with a continuous model of economic cycles based on the exploration and transformation of extractive resources that started centuries based on the exploration and transformation of extractive resources that started centuries ago and intensified multiple inequalities in the extractives market [4]. ago and intensified multiple inequalities in the extractives market [4]. The so-called commodities (Large-scale production of products that function as raw The so-called commodities (Large-scale production of products that function as raw materials and have uniform quality and characteristics, and their price is determined by materials and have uniform quality and characteristics, and their price is determined international supply and demand) boom, or “supercycle”, drew several economists’ at- by international supply and demand) boom, or “supercycle”, drew several economists’ tention, who focused on the effect of high prices from primarily export economies. The attention, who focused on the effect of high prices from primarily export economies. The three main groups of commodities (i.e., fuels, metals, and agricultural products) showed three main groups of commodities (i.e., fuels, metals, and agricultural products) showed a a substantial increase in prices from 2003 to 2014 [5]. substantial increase in prices from 2003 to 2014 [5]. Agricultural commodity prices have fallen over the past two years. However, there Agricultural commodity prices have fallen over the past two years. However, there has been a recovery in international market prices, starting in the second quarter of 2021. has been a recovery in international market prices, starting in the second quarter of 2021. The average price of soybeans can be seen in Figure 1. The persistent upward trajectory The average price of soybeans can be seen in Figure 1. The persistent upward trajectory of of prices in 2021 has raised the hypothesis of a new commodity supercycle, similar to the prices in 2021 has raised the hypothesis of a new commodity supercycle, similar to the one one observed at the beginning of the last decade. In fact, as of the second quarter of 2021, observed at the beginning of the last decade. In fact, as of the second quarter of 2021, dollar dollar earnings of Brazilian exports began to reflect the escalation of this price hike, cul- earnings of Brazilian exports began to reflect the escalation of this price hike, culminating minating in June 2021 with highs in most of the main exported products [6]. in June 2021 with highs in most of the main exported products [6]. Figure 1. Brazilian soybean exports average prices (Jan 2011–Jun 2021) (In USD/kg). Adapted: [6]. Figure 1. Brazilian soybean exports average prices (Jan 2011–Jun 2021) (In USD/kg). Adapted: [6]. The agribusiness trade balance ended in June 2021 with USD 10.8 billion in surplus. Soybeans stood out, which has continued to grow by 25.3% since June and should see the The agribusiness trade balance ended in June 2021 with USD 10.8 billion in surplus. year-end with new production and export records [7]. The export’s high-level dependence Soybeans stood out, which has continued to grow by 25.3% since June and should see the and investment centralization on the commodities sector would compromise diversified year-end with new production and export records [7]. The export’s high-level dependence industry formation with possibilities for generating a profit and capital accumulation for and investment centralization on the commodities sector would compromise diversified economies with this production specialization, especially in stagnation periods when prices industry formation with possibilities for generating a profit and capital accumulation for fall [5]. Such imbalances would become an obstacle to the consistent industrialization economies with this production specialization, especially in stagnation periods when process, capable of forming capital and preventing the low elasticity of commodities from prices fall [5]. Such imbalances would become an obstacle to the consistent industrializa- being transferred to prices. tion process, capable of forming capital and preventing the low elasticity of commodities Agribusiness can be one of those responsible for deforestation. The links have been from being transferred to prices. pointed out by [8] between the illegal deforestation in the Amazon and the EU imports Agribusiness can be one of those responsible for deforestation. The links have been of soybeans and beef from Brazil. The correlation analysis between soybean expansion pointed out by [8] between the illegal deforestation in the Amazon and the EU imports of and deforestation rates at the municipal scale [9], showed that there was a relationship soybeans and beef from Brazil. The correlation analysis between soybean expansion and between the two events and indicated that soybean production was one of the deforestation deforestation rates at the municipal scale [9], showed that there was a relationship be- factors, albeit not the only one. There have been indications that its expansion directed tween the two events and indicated that soybean production was one of the deforestation deforestation to new pioneer areas and shifted livestock to other areas [9]. factors, albeit not the only one. There have been indications that its expansion directed In [10], they showed that the marginal benefits of soybean expansion have been deforestation to new pioneer areas and shifted livestock to other areas [9]. increasing in the income dimension, but decreasing in education and longevity. On the other hand, changes in soy productivity (a proxy for agricultural intensification) have had a complex impact on the human development index and its dimensions, but in general, its marginal benefits have been decreasing over time. Earth 2021, 2, FOR PEER REVIEW 3 In [10], they showed that the marginal benefits of soybean expansion have been in- creasing in the income dimension, but decreasing in education and longevity. On the other hand, changes in soy productivity (a proxy for agricultural intensification) have had a Earth 2021, 2 1079 complex impact on the human development index and its dimensions, but in general, its marginal benefits have been decreasing over time. Since 2019, the increase in demand for commodities such as iron and soybeans may Since 2019, the increase in demand for commodities such as iron and soybeans may indicate that we are in a new commodities supercycle. Within this context, we analyzed indicate that we are in a new commodities supercycle. Within this context, we analyzed the economic, social, and environmental characteristics of the Brazilian Amazon to iden- the economic, social, and environmental characteristics of the Brazilian Amazon to identify tify the impact of increased soy production in this region. The research hypothesis was the impact of increased soy production in this region. The research hypothesis was that that the increase in soybean production has impacted the Brazilian Amazon’s sustainabil- the increase in soybean production has impacted the Brazilian Amazon’s sustainability. ity. The article proceeds in the next section with the methodology used for the evaluation The article proceeds in the next section with the methodology used for the evaluation of of Brazilian Amazon indicators related to economic, environmental, and social impacts. Brazilian Amazon indicators related to economic, environmental, and social impacts. 2. Methodology 2. Methodology The proposed methodology was to identify and analyze sustainability indicators. The proposed methodology was to identify and analyze sustainability indicators. The The ISO-21929 standard defined sustainability indicators as figures or other measures that ISO-21929 standard defined sustainability indicators as figures or other measures that enable information concerning a complex phenomenon such as environmental impact to enable information concerning a complex phenomenon such as environmental impact to be simplified into a form that is relatively easy to use and understand [11]. be simplified into a form that is relatively easy to use and understand [11]. The Brundtland Report provided the most popular notion of sustainability (i.e., sus- The Brundtland Report provided the most popular notion of sustainability (i.e., sus- tainable development): development that meets the needs of the present without compro- tainable development): development that meets the needs of the present without compro- mising the ability of future generations to meet their own needs [12]. Based on a review mising the ability of future generations to meet their own needs [12]. Based on a review of of sustainable development literature, it might also be stated as: “the development that is sustainable development literature, it might also be stated as: “the development that is likely likely to achieve lasting satisfaction of human needs and improve of the quality of life under the to achieve lasting satisfaction of human needs and improve of the quality of life under the condition condition that ecosystems and species are utilized at levels and in ways that allow them to keep that ecosystems and species are utilized at levels and in ways that allow them to keep renewing renewing themselves” [13]. themselves” [13]. A methodology to identify sustainability indicators was shown by [14–16]. A review A methodology to identify sustainability indicators was shown by [14–16]. A review of sustainability indices and indicators was presented in [17]. Sustainability indicators of sustainability indices and indicators was presented in [17]. Sustainability indicators were developed and validated by [16], which structured four dimensions: economic, en- were developed and validated by [16], which structured four dimensions: economic, vironmental, socio-cultural, and institutional. Many scholars and institutions proposed environmental, socio-cultural, and institutional. Many scholars and institutions proposed various indicator-selection criteria [18–20]. various indicator-selection criteria [18–20]. The methodology steps are shown in Figure 2. We began by formulating a research The methodology steps are shown in Figure 2. We began by formulating a research problem to originate research objectives. For the data collection step, we identified indi- problem to originate research objectives. For the data collection step, we identified indi- cators cators by means of a rev by means of a review iew of of the the li literatur terature e. . The n The next ext step of the step of the methodology methodology clustere clusteredd the the i indicators ndicators i into nto three ca three categories, tegories, envir environmenta onmental,l,economic, economic, and and social, social, by a by analyzing nalyzing the the scenario of the increase in soybean production in the Amazon. The main sources consulted scenario of the increase in soybean production in the Amazon. The main sources consulted in the data collection stage and lists of the sustainability indicators identified can be seen in the data collection stage and lists of the sustainability indicators identified can be seen in Table 1. in Table 1. Figure 2. Methodology steps. Source: Elaborated. Earth 2021, 2 1080 Table 1. Sustainability criteria and indicators. Criterion Indicator Description Source Per-capita gross domestic product (GDP) represents per capita GDP a breakdown of economic output per person and is calculated by dividing the GDP by its population Soybean-planted area in Brazilian Amazon in one Planted Area [2,5,7,21–24] Economic thousand hectares Soybean Production Soybean production in Brazilian Amazon in tons Gross value added of services, at current prices; Value of the Services except administration, defense, education, and public health and social security; in USD Social Unemployment rate Unemployment rate for people 18–24 years old [4,21,25,26] Deforestation rates Annual consolidated deforestation rates in km [9,10,21,26–30] Environmental Emissions of greenhouse gases (GHGs) estimated in GHG emission the legal Amazon in million tons The research problem: is there a correlation between soybean production and other indicators of sustainability? From this research problem, we collected data from the literature and from databases to identify the main sustainability indicators, and later, these indicators were analyzed considering statistical analyses with correlation coefficients. For political decision-making, social and economic indicators were usually adopted. However, to monitor and assess changes and their impacts on the environment, comparative indicators were needed. An economic indicator does not consider social or environmental effects, just as environmental indicators do not reflect social or economic impacts, nor do social indicators consider environmental or economic effects. The sustainability indicators were divided into social, economic, and environmental components. The identification of sustainability indicators would be carried out through a review of the documentation, which involved the selection of available documentation and a structured review, which involved technical scientific references and databases. In the indicator-analysis stage, the functional relationships of the identified indicators were considered, establishing a relationship between two variables. The regression analysis was performed under a theoretical framework that justified the adoption of mathematical- causal relationships. Where x is the independent or explanatory variable, and y is the dependent or response variable, with the aim of predicting the values of a dependent variable (y) as a function of an independent variable (x). After identifying and selecting the indicators that would be the study variables, the hypotheses of this study were: Hypothesis 1 (H1). There is a correlation between the analyzed variables. Hypothesis 2 (H2). There is no correlation between the analyzed variables. The Pearson correlation coefficient formula (Equation (1)) was used to test the hy- potheses of this study. The correlation coefficient is a measure of strength and direction in a linear relationship between two variables, varying between 1 and +1 [31]. n xy x y å å å q q r = (1) 2 2 2 2 n x ( x) n y ( y) å å å å Hence, if the value of r approaches “