November 17, 2000

AgLead IV class checks out
South American competitors

By Si Cook
Organization Programs Director

Much has been said in recent years about increasing trade between countries and continents. "Global economy" is a phrase that is being used more frequently than ever by elected officials, the business community and world leaders. With technology and transportation making the world an ever smaller place, trade with countries that are thousands of miles away is no longer an oddity—it's a reality! Members of Texas Farm Bureau's AgLead IV Class recently visited two of South America's most economically prominent countries, Brazil and Argentina, to get a feel of what American agriculture's competition will look like.

In mid-October—springtime in South America—the 12-member Aglead class flew into Sao Paulo, Brazil to begin their international learning experience. The city, with over 15 million people, is representative of the large expanse of land that makes up the country. Brazil is roughly the same size as the United States and boasts some of the same diverse geography and climates. While in Sao Paulo, class members were able to visit a Brazilian Hypermarket, which they learned is much the same as any supermarket or major grocery store here in the states. The entire facility was the picture of cleanliness and order. In fact, the only way you could distinguish it from your local H-E-B or Kroger's was the language in which everything was written—Portuguese.

Following a briefing at the U.S. Agricultural Trade Office, the group visited the largest port in Latin America, the Port of Santos. This modern facility is responsible for more than 33 percent of South America's foreign trade.

The group then headed inland to view various aspects of production agriculture. The first stop was the largest sugar mill in South America, USINA SANTA ELISA. This family-owned business processes cane produced from thousands of acres into refined sugar, by-products and alcohol to power the more than 40,000 cars in Brazil that use it for fuel. The plant also burns its waste products to generate enough electricity to run the entire operation and provide enough additional power for a city of 30,000.

The AgLead group completed the Brazilian leg of the trip with visits to FUNDECITRUS, a major citrus company, and ESALQ, a major agriculture university. They found that most of the Brazilian citrus crop goes into juice which is exported, much of it to the United States.

From Brazil, the group then journeyed to the fabled city of "good air"—Buenos Aires, Argentina. This unique and very cosmopolitan city lies at the edge of the famous Pampas region. The group traveled 140 km (approximately 90 miles) southwest of Buenos Aires to Roque Perez, a small agricultural community. There they visited "El Tajar" a family-formed corporation started by friends and neighboring farms. The class learned about the company's history from its beginnings in 1988 to the present operation which encompasses 50,000 hectares (123,555 acres.)

This very modern, profitable farming and ranching operation is unique in many ways. To start with, "El Tajar" actually owns very little land. The corporate owners find it more beneficial to lease. The second thing that impressed the group was the amount of equipment owned by the corporation—virtually none! All of the farm work is done by custom operators who maintain a close relationship with the various farm managers.

The leadership class quickly found out that the owners live by a lowest-cost-producer philosophy! The class saw their feedlot (cattle surrounded by a two-strand electric fence and eating out of steel barrels cut in half) as well as their farming operation, which is almost exclusively no-till. The yields they realize on corn are good, even though they use little or no fertilizer. The managers quickly told us that they could produce much more—if the price of commodities goes up!

The group was scheduled to visit Liniers Livestock Market in Buenos Aires. Liniers normally sells 8-10,000 head per day, but the market had been closed down for the week because of a major strike being conducted by farmers and ranchers in the area. The class came upon one of their roadblocks as they traveled back from the Pampas into Buenos Aires. Upon learning that members of the group were farmers and ranchers from the United States, the local association president was eager to share the woes of he and his fellow producers.

It seems that the Argentine government has given very little help to people in agriculture and it is becoming almost impossible to make a living from the small farms and ranches that the majority of the producers own.

They were also upset about the unfair trade advantage that other countries (including the U.S.) had over them because of subsidized agriculture! All in all, it was a very informative visit that ended with an invitation to come back again for a real tour of production agriculture.

In summary, the South American experience was extremely educational. The hospitality that was extended was exceptional. Both the Brazilians and Argentines are very open, hospitable people, most of whom are very informed and curious about what goes on in the U.S. Their agriculture has the potential to rise to a level that equals ours. However, they lack the transportation infrastructure to get their products to market. The vast majority of produce and other goods are trucked, using fuel that is three to four times as expensive as ours.

Many in the U.S. have heard about the vast sections of land that are being broken out in new agricultural production. The group found this to be true and much of this land can only be accessed by hundreds of miles of dirt roads. This presents a costly transportation problem. This one fact is what will keep South America from taking a disproportionate share of the world agricultural trade in the near future.

This trip was an experience that will be remembered for years to come by all who attended. Traveling abroad and learning about other cultures and customs is a priceless experience. Well-known writer and philosopher Mark Twain once wrote, " Travel is fatal to prejudice, bigotry, and narrow-mindedness, and many of our people need it sorely on these accounts. Broad, wholesome, charitable views of men and things cannot be acquired by vegetating in one little corner of the earth all one's lifetime." These words still hold true today. While the AgLead IV Class now has a much better understanding of "the global trade issue" and they were thoroughly impressed with what they saw and heard, I think that I can speak for the group when I say that there is still no place on earth better than the good old U.S.A.!