Brazilian strides in Agri sustainability could benefit post-Brexit Britain

Developments in sustainable AgriTech, crucial to Brazil's agricultural revolution, could hold the answer to many of the UK's sustainability challenges, while promoting bilateral trade post-Brexit.

This was among the key outcomes of the AgriSustainability Talks, a high-level summit hosted by the Embassy of Brazil, in partnership with from the Brazilian Trade and Investment Promotion Agency (Apex-Brasil), held in London during February, ahead of a UK-Brazil Joint Economic & Trade Committee (JETCO) event scheduled for later this year.

Latest data from Apex-Brasil shows that Brazilian agribusiness and food and beverage (F&B) exports rose by 18.4% and 16.8% respectively in 2021. While positive, these growing trade figures raise questions about how both countries will balance the rising demand for food, drink, and agribusiness products with their ambitious sustainability and carbon reduction goals.

In 2021:

• Agribusiness exports by volume from Brazil increased by 18.4% while food and drink exports rose by 16.8% in 2021.
• Egg (81.5%), cotton (23%) and pork (11%) exports experienced volume increases, while poultry (25.7%), fruit (20%) and beef (9%) all saw increased revenue.
• Brazil's fruit sector reached £736 million in 2021, with 1.01 million tonnes of fruit exported, an 18% increase on the previous year.
• Between January and November 2021 7.7 million litres of Brazilian fine wines were shipped to 53 countries, an increase of 91.18% on the previous year's figures. Sparkling wine sales saw an increase of 32% in 2021, and revenues from cachaça hit £9.5 million.

Tech innovation

Integrated crop-livestock-forestry (ICLF) and no-till agricultural practices are just two examples of research-based initiatives that have resulted in the massive reduction of Brazilian agriculture emissions. The extension of the ICLF system by some 6 million hectares has resulted in the sequestration of 21.8 million additional tonnes of CO2 equivalent, the same as removing 4.7 million cars from the road, and Brazil will extend ICLF to a total 16.5 million hectares of farmland by 2030 under the Paris agreement.

No-till practices are used by some 45% of Brazilian farms and contribute to the minimisation of GHG emissions by up to 40%. Integrated crop-livestock-forestry (ICLF) and no-till agricultural practices are just two examples of research-based initiatives that have resulted in the massive reduction of Brazilian agriculture emissions.

While that focus on embedding best practices remains, innovations in technology are significantly enhancing the potential for much greater gains and advances in delivering more sustainable agriculture. According to Embrapa, the Brazilian state agriculture research corporation, the number of agritechs in the country surged by 40% to 1,574 between 2019 and 2020.

In 2021, Brazil became the first country to approve the use of a feed additive that cuts methane emissions from cattle by some 55%, so with the potential of more than halving the country's beef sector methane footprint. This is a huge development as methane has a carbon footprint about 30 times that of CO2.

Brazil has also been deploying agricultural drones for better forestry management and control. The summit heard that Climate Resilient Agriculture (CRA), regenerative farming, methane inhibiting cow feed, ethanol-based vehicle fuel, and nitrogen fixation were all AgriTech breakthroughs currently championed by Brazil, while improved data capture and governance were celebrated for improving the veracity of sustainability claims by farmers, enabling a move from subsidy-led to carbon-credit-led farmer incentives.

According to Francisco Jardim, Managing Partner of Latin America's largest AgriTech venture capital firm SP Ventures, COVID has been a great accelerator, driving sustainable practices, as well as getting farmers to purchase equipment online, and giving birth to a booming agriculture digital and FinTech scene.

Trade relations

In light of the UK Government's 'Global Britain' agenda, the focus on striking new free trade agreements with major global economies is a key priority for the current UK administration in 2022. Penny Mordaunt, UK Minister of State for Trade Policy, has indicated the Department for International Trade's strategic goal to increase trade ties with Brazil ahead of the 12th JETCO that takes place later this year.

The significant contributions the agri-business sector brings to both economies were a key theme to emerge from the conference, with a clear call emerging for both countries to build on the successes achieved to date in advancing the sector's scientific and technological capabilities, as well as exchanging best practice to guide future trade bonds and partnerships.

Farm ministry DEFRA's Gavin Ross spoke of the UK's hopes to "fundamentally change the approach, moving from paying farmers, to instead buying environmental benefits through three schemes: the Sustainable Farming Incentive, Local Nature Recovery and Landscape Recovery", ambitions that have parallels with the "great progress being made in Brazil to recover 90 million hectares of degraded pasture" mentioned by EMBRAPA's President Celso Morretti, as he outlined some of the 200 research projects currently underway by more than 40 research centres across Brazil.

ABC

Brazil's reputation in sustainable agriculture is being bolstered by several government and industry initiatives to support the agri-business sector in the country. Tereza Cristina Corrêa da Costa Dias, Brazil's Minister of Agriculture, Livestock and Food Supply is currently enacting a strategy - the Plan for Adaptation and Low Carbon Emission in Agriculture ('The ABC Plan') - which harnesses new technologies and technical skills to help Brazil meet key sustainability objectives in agriculture.

The plan is promoting low-carbon agriculture practices and has already helped to recover 26.8 million hectares of degraded pastureland for agriculture use - an area significantly larger than the UK.

Global crop science giants such as BASF, Bayer and Syngenta are all active in this process, with animal health and nutrition companies such as DSM, supported by local Brazilian firms.

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.