Thursday, January 10, 2008

Brazil sees sharp farm growth, despite environment



By Raymond Colitt

BRASILIA (Reuters) - Brazil's farm sector will grow rapidly over the next decade and double some of its leading exports despite concerns over Amazon destruction and farmers' debt, the government said on Wednesday.

Critics say Brazil's rapidly expanding agricultural frontier has helped push farmers and loggers deeper into the world's largest rain forest, increasing destruction.

"We can still grow substantially without any deforestation," Agriculture Minister Reinhold Stephanes told a news conference after presenting the government's 10-year farm sector outlook.

Brazil's production of ethanol derived from sugar cane would grow by 113 percent and exports of the biofuel by 270 percent over the next decade, the report said.

Brazil is to surpass the United States as the number one soy exporter, with foreign sales rising 40 percent to 50.5 million tons by the 2016/17 harvest.

"We see good prospects for strong growth," Stephanes said.

The government last month banned the sale of farm products from illegally deforested areas in the Amazon in an attempt to reverse months of increasing destruction.

It will impose fines for buying or trading goods such as beef or soy produced on illegally deforested properties.

A new zoning law is in the making that would regulate farming according to environmentally sensitive regions.

Still, conservationists question whether the government has the resources to implement controls, even though it sent hundreds of additional police last month to the vast Amazon region, part of which is dominated by local political bosses, land speculators and gunmen.

Increased agricultural production would come from improved yields and increasing the use of already cleared land. Only 3 percent of Brazil's total land was being used for soy production, Stephanes said.

Beef exports, which have grown 104 percent since 1994, would expand by a further 62 percent over the coming decade, the agriculture ministry projected.

In order to expand its already dominant position in many commodities on the international market, Brazil would have to become more aggressive in coming years, Stephanes said.

That included additional lines of credit for farmers, who have lost some capital after two consecutive bad crop years, he said.

The government's projections assume world per capita income growth of 3.05 percent through 2016, up from 2.86 percent over the past decade.

(Editing by Christian Wiessner)

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