Grim reapers: the exploitation of Brazil's savannah

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The Telegraph | 12 May 2012
Harvesting soya on a farm in Mato Grosso. Brazil’s third largest state was the front line for the invasion of the cerrado, which has been nicknamed Soylandia  (Photo: Getty Images).

By Fred Pearce

It was hard to believe, as I sipped a glass of wine by the pool while a light plane landed behind me on the farm airstrip, but a quarter of a century ago, all the land around me had been Brazilian badlands. A wild west, where men on horses staged gun battles on empty grassland they could buy for the price of a packet of cigarettes.

Times change. I was joined for lunch at Campo Aberto by a dapper British financier in a blazer and panama. He used to be something big in Rolls-Royce, and he had just flown in with his wife to consider investing in the farm – part of a 42,000-hectare agricultural empire called Agrifirma, assembled by Lord Rothschild, the head of the banking family, and the once-notorious 1970s corporate raider Jim Slater. The incorrigible pair, both past their 75th birthdays, were betting their profits from a successful speculation in gold and uranium on Brazilian agriculture.

We were in the heart of the cerrado, the most biologically rich savannah grassland in the world, in what was once the outback of Brazil. But the lawless days are disappearing, and with them biodiversity. For this land is turning into one of the most unremitting commercialised monocultures on earth. It is the first place in the tropics to successfully recreate on a large scale the high-tech, high-input, high-investment farming system pioneered in the American prairies. In recent years, the place has out-invested the prairies, with its endless fields of GM maize, soya, cotton and coffee. This, the financiers say, is the future of farming.

The cerrado was an enormous patchwork of tall, waving grassland dotted with dry woods. It occupied an area approaching a quarter of Brazil – two million square kilometres of the high plains on the Atlantic side of the Amazon basin. It teemed with unusual mammals, including armadillos, anteaters, tapirs and maned wolves. There were thousands of endemic plants, uniquely adapted to drought and fire. These ecological riches were harvested, but rarely destroyed, by bands of Indians.

It took a long time for Europeans to penetrate Brazil’s empty heart. The soils of the cerrado were deep, well drained and underlain by abundant reserves of water. But they were too acid to grow most crops. So the land was either left alone or given over to extensive ranches, with the existing grasses nibbled at by cattle.

Even after the 1960s, when Brazil built its shiny modernist capital Brasília in the middle of the cerrado, the farm invasion was slow. But in the past 30 years all that has changed. More than 60 per cent of the cerrado – an area the size of Britain, France and Germany combined – has disappeared under the plough. The ecological consequences are huge.

Brazil is justly proud of how much it has reduced deforestation in the Amazon. Rates of forest loss fell by 70 per cent between 2004 and 2010. Companies that process products made at the expense of the Amazon are ostracised. The world’s largest producer of beef, JBS-Fribol, has agreed to stop buying cattle from ranches associated with illegal deforestation in the Amazon. But the saving of the Amazon has been accomplished at a high price – the invasion of a new ecological frontier of almost equal importance.

In recent years the cerrado’s grasses and woodlands have been disappearing twice as fast as the Amazon rainforest. But so far the outrage has been minimal. Investor literature in London, New York and Chicago notes with anticipation that Brazil still has more uncultivated land than the European Union has cultivated land. It declares that, since the Amazon is no longer the target, uncultivated land can be ploughed up at no ecological cost. Half of it is in the cerrado.
What transformed the cerrado from badlands to agricultural bonanza? Science. In the 1970s Brazilian government researchers worked out how to farm its soils. The solution was to apply industrial quantities of lime to neutralise the acid. By the early 1980s, the soils were being transformed.

Pioneers began arriving. At first, they were often bandits. But eventually the government quelled the land wars and, with cheap credit and other inducements, persuaded farmers to move in. Most were from the far south of the country, and of German, Italian or Japanese descent. They were attracted by cheap land. For every hectare they sold in the south, these 'gauchos’ could buy 10 to 40 hectares in the cerrado. The Brazilian scientists encouraged them to plant soya, a crop native to Korea and Japan that they had successfully bred for the tropics. But with time the smaller farms have been amalgamated or bought out by big farmers.

'I was brought up in Mato Grosso,’ says Valmir Ortega, cerrado director for the environment group Conservation International, which is working to protect the region’s ravaged grasslands. 'I can remember as a child seeing the first soya. Before that, the land was cattle range. At first there were a lot of small farmers, but those colonisers are being forced out. It’s the big guys now.’

People have been forced out, too. The indigenous inhabitants of the region – the Tupi, Cariris, Botocudos and Xavante – were gradually corralled into a handful of small reserves that today, as the University of Iowa anthropologist Laura Graham puts it, 'seem like islands in a sea of soy’. Cut off from their hunting grounds, they are at the mercy of gangmasters from the big farms. They are the forgotten people of Brazil.

For many years, Mato Grosso, Brazil’s third largest state, located in the west of the country, was the frontline state for the invasion of the cerrado. Soya production there increased fivefold between 1985 and 1995. Two cousins became the world’s largest soya growers. Blairo Maggi, the head of the Amaggi Group, and Erai Maggi Scheffer at the Grupo Bom Futuro now farm about half a million hectares between them. Their blitzkrieg was part-funded by the International Finance Corporation, the private lending arm of the World Bank, and a $230-million loan from European banks, including the Dutch Rabobank and HSBC.

Blairo Maggi became governor of Mato Grosso from 2003 to 2010, and is now its senator in Brasília. The clearing of forests and grasslands in the state reached a peak after he became governor. With backing from commodities giants such as Cargill and Bunge, he pushed through a plan to pave 1,600km of highway from his state to the Amazon river port of Santarém, where Cargill built a soya handling dock. Soya farms spread all along the road. The Maggi family benefited hugely. Conflict of interest? Maggi replied from the governor’s office: 'It’s no secret that I want to build roads and expand agricultural production. The people voted for that, so I don’t see the problem.’ He told the New York Times: 'To me, a 40 per cent increase in deforestation doesn’t mean anything at all, and I don’t feel the slightest guilt over what we are doing here. We’re talking about an area larger than Europe that has barely been touched, so there is nothing at all to get worried about.’ Some say he has gone green of late. The Amaggi group is in the forefront of the new Round Table on Responsible Soy. But it is too late for Mato Grosso.

The Maggi soya revolution has made Mato Grosso the biggest magnet in Brazil for foreign investors. A fifth of the state is now foreign-owned. But what happened there is now happening across the rest of the cerrado. There has been nothing like it in the world in the past 20 years. Brazilian agribusiness is the world’s largest market for agricultural machinery, and most of the equipment is destined for the cerrado. The cerrado produces 70 per cent of Brazil’s crops. Much of the maize grown there is consumed in Brazil, and the sugar cane often goes to fill the tanks of the country’s ethanol-fuelled vehicles. But the soya, cotton, coffee and other crops largely go for export. Thanks to the cerrado, Brazil is the world’s largest exporter of soya, beef, chicken, sugar, ethanol, tobacco and orange juice. They call it Soylandia now.

But don’t be misled. Brazilians don’t eat much of the produce from the rape of the cerrado. According to Conservation International’s environmental policy director, Paulo Gustavo Prado, 'some 60 per cent of Brazil’s basic foodstuffs still come from campesinos farming fewer than 20 hectares. Big farms are for export.’

The Mato Grosso is lost. So I spent a week visiting giant industrial farms along the new agribusiness highway through western Bahia in north-east Brazil. The distances are huge, and so are the farms. The scenery is less than bucolic. You don’t see many trees. What you do see is a constant stream of signboards beside fields advertising the latest strains of agrochemicals being sprayed or seeds being planted: Bayer’s soya, Syngenta’s corn or Du Pont’s Pioneer Hi-Bred cotton.

Agrifirma’s Campo Aberto farm is the largest of three farms owned across the cerrado by Rothschild and his partners. To find it, I drove for three hours from Barreiras, the bustling agribusiness capital of western Bahia, and then a further 40km down a rutted track shared by a host of other farmers.

I was greeted by the company operations manager, Rodrigo Rodrigues, an engaging and confident technocrat in his thirties who is in charge of the place. I hadn’t imagined the septuagenarian financiers did much farming themselves.

Rodrigues is from a well-to-do farming family. His father, Roberto, was a sugar cane producer in São Paulo state. He pioneered growing sugar to make ethanol for biofuels, and then became the first minister of agriculture under President Lula da Silva in 2003. Rodrigo lives in São Paulo and runs his own farms in three states, as well as supervising the British investment. One of the four Cessnas sitting on the airstrip behind the hacienda was his. I discovered that Rodrigo once owned Campo Aberto himself. He had bought it from Milton da Silva, the wealthy landowning father of the Formula One champion Ayrton Senna, re­organised it and sold it to the British high-rollers in 2008. For a tidy profit, I imagine.

'Farming is a factory without a roof,’ Rodrigues said proudly as we headed out after lunch to view the fields. He grows soya, maize and cotton, in strict rotation. That’s normal here. But he prides himself on fine-tuning the system, constantly testing different combinations of seeds, chemicals and planting regimes. He had the data at his fingertips: the pH of any patch of soil, rainfall for every day the crops had been in the ground, what chemicals had been added, and their impact on the chemical composition of the soil.

Like most farmers on the cerrado, he was growing GM crops, such as maize and soya. He was proud of his yields. His 10.5 tonnes of maize per hectare was close to American standards. 'When I graduated from college in 1997 we thought five tonnes was good,’ he said. But he was more concerned about his bottom line. 'Last year we lost money, so we are trying to keep the same yield now with fewer inputs and using less machinery. My aim is to economise, not maximise.’

Was he a landgrabber? He didn’t see things that way. After all, whatever the cowboys got up to in the past, stealing land from the Indians and ploughing up the wildlife, he had simply bought the farm from da Silva and sold it to British investors. Yes, he agreed, there were indigenous communities living near the farm. Yes, they were its former inhabitants. But he had commissioned an anthropologist to tell him their needs. He held a Christmas party for their children, even if he was frustrated that some of them 'stole the presents’. He offered them the chance to grow food for the company canteen, though 'they didn’t respond’. He hired them to work on the farm too, 'when we can; when they are qualified’. But the jobs were limited. Agrifirma’s high-tech farms have only 180 staff to run 42,000 hectares. He said he had given the local communities help in getting formal title to land they currently occupied. How much land was that? Some 500 hectares – for 300 people. That ought to be, as he said, 'enough to grow their own food’. But it was a tiny fraction of the size of the farm and of what they must have had before. He aspired, he said, to deliver 'the three Ps: people, profit and the planet’.

Across the table at lunch, Rodrigues’s new would-be investor had been sizing up the margins. I also sat next to a European lottery entrepreneur, spending his winnings from other people’s bets by taking a flutter on another farm down the road. He said he had been introduced to the area by Rothschild. Driving back down the track to the main road, I passed a farm bought in 2007 by George Soros’s Adecoagro enterprise. Adecoagro is registered in Luxembourg but has farms in Brazil, Argentina and Uruguay. It claims to be 'one of the leading companies in the production of food and renewable energy in South America’. It raised $300 million in early 2011 to buy more land and build a sugar-processing plant. The Qatar Investment Authority took a share.

Next, I retraced my steps to Barreiras, the engine room of the current assault on the cerrado. I wanted to discuss the ecological importance of the region with a local biology professor, Fernando Lutz. We sat in a bare lecture room on the new campus of the University of Bahia. The globalisation of the cerrado is a tragedy for nature, he said. The world has shown its enthusiasm for saving the Amazon, but it has ignored the fate of the cerrado. It contains a third of all Brazilian biodiversity, including some 10,000 plant species, more than 4,000 of them found nowhere else.

Or at least it used to. For the high plateaus of the cerrado, which are the most biodiverse, have proved the most tempting for farmers. The best is already gone. Lutz planned a three-year expedition to explore, metre by metre, a 75km cross-section of the district of Formosa do Rio Preto, just north of Barreiras, to find out what it still contained. But he had better be quick, said Flavio Marques, an environmental adviser to the Bahia state prosecutor, whom I met across town later that afternoon. Marques was sitting in front of a floor-to-wall satellite image of western Bahia. Green slivers of natural cerrado vegetation followed some river valleys. But elsewhere, and particularly in the plateau close to the border with neighbouring Tocantins state, including Formosa do Rio Preto, the colouring was almost universally pink. Pink denoted crops.

The fastest loss of cerrado today is in Formosa do Rio Preto, he said. More than 200,000 hectares disappeared to agriculture in that district alone between 2002 and 2008. I didn’t need telling why. As we spoke, trucks from all over the district were lining up nearby to empty its latest harvest into Cargill’s soya-collecting silos. Marques told me he was in charge of imposing in western Bahia the minimum environmental standards required by Brazil’s long-standing forest code. The code said that developers in the cerrado should leave 20 per cent of the land intact as 'legal reserves’. But he was in despair. Three years before, he had sent out a letter asking all farmers of more than 5,000 hectares to show him details of their legal reserves. So far, he told me, only a tenth of them had bothered to reply. 'The majority of them don’t have legal reserves, but they think they can get away with it,’ he said. They are probably right. 'The private landowners have traditionally done whatever they want here.’

Two hours down the road from Barreiras is Luis Eduardo Magalhães (LEM), an even newer agricultural boomtown. According to legend, in the early 1990s the town was just a petrol station run by a poacher of the giant rheas that live amid the grasslands. What is certain is that it has grown in a decade from nothing to a town with a population of 60,000, centred on Brazil’s largest soya-processing plant, owned by Bunge, and a John Deere dealership that sells tens of millions of dollars’ worth of harvesters each year. Now Cargill is here, too. And Massey Ferguson and Mitsubishi, Syngenta seeds and Dow Agrosciences. On one side of the highway, dirt tracks lead down from truck stops to stinking barrios full of booze joints and brothels. On the other side are the paved roads, starred hotels and gated estates.

The administrative district around LEM covers 400,000 hectares. But it has had an environment secretary for only a year. Fernanda Aguiar, who has the job, is a smart young lawyer who previously made a living representing farmers in environmental cases. She told me she had a staff of five. 'When this town got started, they just wanted people to come and get rich quick. There were no services or planning. Things were done without any respect for the law.’ A decade on, she says, 'nobody feels they belong here because nobody was born here. People have no idea about taking care of their town, let alone the cerrado.’

All across Aguiar’s domain the land is dominated by big farms, locally called fazendas. Some have names straight out of the TV mythology of the American West, such as Fazenda Chaparral and Fazenda Bonanza. Others betray the curiously cosmopolitan origins of their proprietors, such as Fazenda Oriental (proprietor: Mr Ming Quang) and Fazenda New Holland.
South of LEM, I pulled up at the São Sebastião Farm. Anildo Kurek, a Brazilian of Dutch extraction, told me how he began here in 1989, at the age of 35. 'Then it was still all natural cerrado,’ he said. He bought his first thousand hectares with bags of soya – the preferred currency in those days – paid to 'one of the earliest pioneers, who had cleared the land of bush – and people too, I expect.’ Kurek came with his father-in-law and brother-in-law. 'It was an adventure. There were no roads, no water and it was hard to get fertiliser. There was no law. Well, no law enforcement anyway. No government agencies.’

Times have changed, he said. The three of them bought 20 neighbouring farms, one at a time, and created a single operation covering 23,000 hectares, which Kurek now runs with 130 full-time employees. 'We have to follow the rules now, well mostly,’ he said, as we stood in one of his corn fields. Dwarfed by his crop, he was still slightly surprised at his luck in life, at the huge amount of land he controlled and the giant harvesting equipment at his disposal.

São Sebastião felt more like a traditional farm than anything else I visited in the cerrado. Walking to lunch on the veranda of Kurek’s hacienda, we passed chickens, a vegetable plot, a playground swing, a native tree called a goyaba, and a guard dog lazing in the shade. A cockerel crowed as the soya trucks headed out of the gate, destined for Bunge or Cargill.
Kurek’s neighbours were mostly from a different generation. Next door were the 22,000 hectares run by the American-owned Iowa Farms, recently renamed Grupo Iowa to make it sound more Brazilian. Then there were the Argentines over at Los Brobos. Would he stay? 'I live in Brasília at the weekend now. It’s a four-hour drive. And my family has gone back to the south. I’ve had offers for my land but I’ve turned them down,’ he said. 'So far.’ He was disappointed that none of the next generation of the family was interested in taking over. And the number of Brazilian farmers around there who might be keen to buy him out was diminishing.

So who might buy when the time came? Would it be the British lords and asset-strippers at Agrifirma? Or how about SLC Agricola, Brazil’s largest agricultural enterprise? It already has 11 farms in the cerrado, covering a total of 230,000 hectares. They included the nearby Panorama Farm, which was my next stop.

SLC does corporate-formula farming. Some call it the McDonaldisation of agriculture – adapting the local environment to fit a standard business plan. Each of its farms runs the same cotton-soya-maize rotation, scheduled by head office a year ahead, and personally approved by its chairman and patriarch of 40 years, Eduardo Silva Logemann. Each farm is also built to a standard design, with the same recycling bins and floodlit football pitches and internet-enabled club for employees. Panorama’s manager, Marcelo Pegrow, said the farm was one of the company’s newest, amalgamating three old farms that had covered 27,000 hectares. The company planned to buy or rent more neighbouring farms if the chance arose.
It certainly had the cash. Since floating shares on the Brazilian stock exchange, it had doubled its turnover in four years. The Brazilian agricultural boom just keeps on going. And the cerrado keeps on disappearing. The main impediment to further expansion right now, several farmers told me, was transport. Getting the crops to market is still a slow and expensive business. Rodrigues reckoned that half the cost of his soya at the coastal port of Ilheus, more than 1,000km to the east, came from trucking bills. But a new 1,500km railway is being built into western Bahia, reaching Barreiras by the end of 2012 and LEM soon after. That would provide another boost to agribusiness.

So can anything hold back the tide? I had travelled with the Brasília staff of Conservation International. They have a strategy for engaging with farmers, trying to create a coalition of those willing to comply with existing conservation laws, to protect 'legal reserves’, and to establish conservation corridors across the cerrado.

Is the strategy working? I met farmers who now talk the talk – but only, they made clear, if conservation and profit can go together. And the truth is that the global market is winning every round in the fight for the cerrado. The soya market is booming, in particular because it is an ideal feed for the growing herds of livestock in Asia needed to satisfy soaring demand for meat and dairy products. China in particular relies on Brazilian soya. But Asian countries are no longer happy simply to buy the produce. They no longer trust the markets to meet their needs, and want to control the supply chain.

At Barreiras airport, I was waiting for the commuter flight back to Brasília, known to locals as the 'agribusiness express’. Suddenly, a small chartered plane landed and a delegation of more than 20 Chinese piled out. They explained that they were from the Chongqing Grain Group. They had crossed the world with $2.4 billion to spend on setting up a plant in the city to process 1.5 billion tonnes of soya beans a year. Once in operation, it would displace Bunge’s LEM operation as Brazil’s largest soya-processing plant, and could handle half the state’s current soya harvest. Local officials were there to meet them. It looked like a done deal. The Portuguese word cerrado literally translates as 'closed’ or 'inaccessible’. But now that the cerrado is open and accessible, it looks doomed.

This is an edited extract from 'The Landgrabbers: The New Fight Over Who Owns the Earth’ by Fred Pearce (Eden Project Books, £20). To order a copy from Telegraph Books for £18 plus £1.25 p&p call 0844-871 1515 or see books.telegraph.co.uk
Original source: Telegraph
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