Next Steps Are in the Government’s Hands
February 23, 2012 Brazil is now the 4th-largest producer and 5th-largest exporter of cotton in the world. These numbers would be enough to show the importance of the Brazilian cotton chain, but lets’ explore in greater detail what is behind these rankings.
A recent study commissioned by ABRAPA, which resulted in the book, “The Brazilian Cotton Chain: Challenges and Strategies,” shows that in the 2010/11 season, the total turnover of the chain was $37 billion, generating an aggregate GDP of more than $19 billion. The sector earned $7.7 million from the sale of agricultural inputs to the sale of final products. These figures show the reality of the work done by cotton farmers across the country and throughout the chain.
Another important finding revealed by the research concerns the generation of jobs and income. There are 1.7 million workers who generate a total income of $787 million, resulting in an average salary of $679 per month – 130% higher than the minimum wage and higher than income from sugarcane ($660) and soybeans ($627). The number of jobs is exceeded only by the construction industry, the country’s largest employer.
Those are numbers that drive the Brazilian economy and make the country grow. Exports totaled $947 million, of which $746 million came from cotton lint, $14 million from lint, $11 million from cotton yarn, $12 million from knitted cotton and $164 million from cotton fabrics. Cotton lint exports totaled 646.6 million tons in 2011 and 474.2 million tons the previous year, with China, South Korea and Indonesia serving as Brazil’s largest buyers.
All of these numbers are made possible by the efforts and professionalism of the Brazilian farmer, who works hard every year to produce a top-quality cotton crop and, more importantly, fulfill their contracts – regardless of price changes.
This is one of the greatest works of ABRAPA: ensuring the fulfillment of the commitment to honor contracts and keeping the name and reputation of Brazilian cotton on the rise in international markets.
Expanding Area and Production
For 2012, ABRAPA’s expectation is to grow in both cotton area and production. We expect to reap a harvest of more than 2 million tons, thus expanding our export capabilities. The job of marketing Brazilian cotton has been done well with our main customers to date and they continue buying from Brazil.
But to ensure future growth and maintain momentum, certain government actions need to be undertaken.
One of the most important, and one that I’ve been advocating to Brazil’s federal government, is the adoption of a modern market support mechanism that allows both producers and other industry players to hedge their product, ensuring that they receive a minimum price and participate in high market prices.
ABRAPA has already submitted a proposal for this program to the federal government and we hope that this year, we can proceed with its implementation.
It is also necessary to redefine the rules of NR 31, which defines labor relations in the field and puts into practice the points of the new Brazilian Forest Code, which was recently approved in the House and Senate. Streamlining the bureaucracy of the export process, reducing the tax burden, and improving the infrastructure and logistics in producing regions are other points that will require attention.
Despite those challenges, the Brazilian cotton industry is strong, stable and growing. The numbers prove it, as does the support of international buyers. But we will not relax despite our achievements: The goal of ABRAPA and of all the Brazilian producers is to improve and produce more and better cotton every year.
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