Large commercial farmers in Brazil will gain substantially from freer world trade, but smaller family farmers are in danger of being left behind, according to a report from the Organisation for Economic Co-operation and Development.
In its first Review of Agricultural Policies in Brazil, the OECD estimates that, if world import tariffs, export subsidies and domestic farm supports were halved, the Brazilian economy would gain $1.7bn (900m) a year or 0.3% of GDP.
The gains could be greater still, as the EU’s latest offer to the World Trade Organisation talks seeks to cut the highest tariffs by 60%, eliminate export subsidies and reduce trade distorting farm supports by 70%.
But, whatever emerges from any WTO settlement, the report warns of continued poverty for much of Brazil’s rural population.
“More than 60% of the rural population still has an income below the absolute poverty line,” it says.
“A range of policies is needed for small-scale farmers to raise their income and benefit from the expected growth in Brazil’s share of world agricultural trade, for example programmes to upgrade farming skills and technologies.”
The OECD points to dairy and maize production, where large-scale commercial farmers have edged out semi-subsistence and family farmers.
“Measures are required to encourage diversification and help identify other sources of income and business opportunities in rural areas.”