SAO PAULO, Brazil – Plans to pave a muddy road in the lower Amazon Basin should create a new soy boom in Brazil, but the increase in production could come at a potentially high ecological price – exposing the world’s richest tropical forest to destruction.
In the Amazon, a stretch of dirt road roughly 1,000 kilometres long links Brazil’s most productive soy growing regions to Santarem, an Atlantic Ocean port that handles much of the Brazilian soy that is destined for export markets.
Torrential rains make BR-163 roadway virtually impassable from March through June, limiting access via Santarem to the Brazilian soy belt.
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Conservationists fear that work to improve the road will hasten the ruin of the lower Amazon. They also want the government to contain illegal logging and stop land invasions.
But Brazilian president Luiz Inacio Lula da Silva is under pressure to fulfil campaign promises to create jobs and boost an economy that slipped into recession in the second quarter of 2003, while keeping a lid on fiscal spending.
The government has identified the paving of BR-163 as part of an overall plan to stimulate Brazilian exports.
A consortium of companies, including oil giant Petrobras and multinational grain broker Cargill, are so convinced the road will generate growth and profit that they are discussing plans to pay for the development of BR-163 out of their own pockets.
Jose Luiz Glaser, Cargill’s director of soy in Brazil, said improving the BR-163 has been in the government’s development plans for many years but so far, no improvements have taken place.
“It is a project that will happen, but I think it will take three to six years,” said Glaser, whose company is conducting its own viability study on improving the road.
In April, Cargill opened a $20 million soy export terminal in Santarem with a capacity to move 800,000 tonnes of soy a year, most of which the company expects to come from Brazil’s centre-west soy growing region, via BR-163.
Soy is the country’s top farm export and should account for 10 percent of trade revenues in 2003. Brazil was the world’s second largest soy producer, accounting for 25 percent of global production.
Only the United States produced more soy in 2003, but if Brazil’s current growth rates continue, it should overtake the U.S. as the top soy producer in the next five to seven years.
Agriculture is one of the main engines of the Brazilian economy and, in future, most of the growth in the sector will come from the underdeveloped centre-west savanna and other equatorial regions in the north and northeast.
Despite advantages such as seemingly endless, cheap, arable land and abundant water, Brazil’s fertile centre-west savanna lacks a dependable transportation system.
Its highways are insufficient, it lacks integrated railways and it has no river barge systems like the U.S. and Europe.
“This road will be the spine of agricultural and economic development from the centre-west to the free trade zone in Manaus (upriver on the Amazon),” said Dilceu Dal’Basco, state representative in Mato Grosso, Brazil’s top soy state.
If the highway is developed, freight costs from central Mato Grosso to Rotterdam would fall 20 percent, according to transportation ministry data.
“Agriculture would not be the only area to benefit,” said Jony Lopes, co-ordinator of planning at the transportation ministry’s infrastructure department.
He said goods coming from the free trade zone in Manaus would halve travel time to the main markets in the south of Brazil and cut freight costs by 30 percent.
Amazon exposed
Deforestation of the Amazon, home to up to 30 percent of the planet’s animal and plant species, jumped an alarming 40 percent last year, the Brazilian environmental ministry said recently.
Even talk of paving the road, which often has potholes big enough to swallow cars, undermines the forest’s survival.
“Just the possibility of the work spurs many of the poor to move onto the land along the road with the dream of being a soy farmer,” said Roberto Smeraldi, who heads a group of international experts charged with advising Brazil and rich countries that fund Amazon conservation efforts.
Historically, when Brazil has faced the complex problem of creating economic growth to alleviate poverty while respecting the environment, the Amazon has remained an afterthought to the national agenda, said Violeta Loureiro, professor of sociology at the Federal University of Para.
“Soy is just another bulk commodity export,” she said. “This is our history – exporting primary products like rubber, coffee and sugar that offer unreliable returns. Why not explore the medium-term potential in the region’s rich biodiversity?
“The problem, which is not going away soon, is Brazil lacks the resources – the fiscal budget – to develop and protect these assets,” Loureiro said.
