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Brazilian agriculture is one of the most strategic economic sectors for the consolidation of the economic stabilisation programme, which started with the Real Plan in 1994. The large share in the GDP of the agribusiness complex and its strong multiplier effect, the high proportion of products of agricultural origin (basic, semi-processed and processed) in the composition of exports and the contribution to inflation control are examples of the importance of agriculture for the performance of the Brazilian economy in future years.

Farming now accounts for around 12% of the national GDP, considering only the value of production. When the modern concept of agribusiness is used (which covers the sum total of the operations of production and distribution of supplies and new agricultural technologies, production proper, storage, transport, processing and distribution of agricultural products and by-products), the share of the agribusiness complex amounts to over 35% of the GDP, showing the multiplier effect exerted by that sector on the economy as a whole and on the interior of the country in particular.

Despite declining significantly with the process of the country's industrialisation, the share of agriculture in the composition of Brazilian exports is still fundamental. Over a quarter of Brazilian exports still originate from this sector. The country stands out in the international scenario as a major exporter, presenting a diversified range of agricultural exports, in which the main products are: coffee, orange juice, soy beans, meal and oil, sugar, tobacco and cigarettes, paper and cellulose, beef, pork and poultry.

Keeping inflation at low rates to prevent the erosion of the purchasing power of the majority of the population is directly related with agricultural supply at reasonable prices, as in Brazil foodstuffs are wage goods.

Bearing in mind the above points, satisfactory performance of Brazilian agricultural production becomes a condition sine qua non for the future success of the Real Plan. Agricultural production, which now stands at around 83 million tons of grain, needs to grow at rates higher than population growth (1.4% per year) in order to generate foreign exchange and new jobs, in addition to alleviating the existing problem of hunger in Brazil.

Brazil presents great potential for growth in agricultural production, as it has a favourable climate which makes it possible to have two or more harvests a year; large tracts of arable land not yet used; availability of water; producers and agribusinesses with a good technological level; accelerated growth in world food demand; and above all, great potential for increased domestic consumption.

Despite all that potential, Brazilian agriculture has not been growing at significant rates in recent years. It is therefore fundamental for the formation of the expectations of the various economic agents operating in the Brazilian economy to ascertain the main restrictions on a more solid development of the agricultural sector and assess its prospects in future years.

Any prospective analysis of Brazilian agriculture first needs an approach to the paths and transformations which it has undergone in recent decades. This is because a large part of the problems and solutions now presented for discussion are directly related to the progress and delays contained within the scope of past agricultural policy and its variations.


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