Agro-industrial development: Lessons from Brazil

Gabriel da Silva Medina and Benno Pokorny

Land Use Policy, 2022, vol. 120, issue C

Abstract: Agribusiness is an important development option for low-income countries that expect foreign investments to have a positive effect on the modernization and strengthening of their domestic agricultural sectors. However, evidence of these expectations being met is ambivalent, notably regarding whether domestic entrepreneurs can benefit from the thriving global agribusiness by establishing themselves in agro-industrial segments that can best remunerate capital and labor. Against this backdrop, we assessed the market share of domestic vis-à-vis multinational companies in key supply chains in Brazil, the leading example of agricultural development worldwide. The results revealed that the domestic market share was 23.9% for soybean, 47.2 % for sugarcane, 57.9 % for dairy, and 76.0 % for beef supply chains. There was high heterogeneity among agribusiness segments that can be divided into three groups: 1. Segments controlled by foreign multinationals, 2. State-supported segments controlled by domestic companies, and 3. Mixed segments controlled by both domestic and multinational companies. In mixed segments, foreign and domestic investments support the streamlining of supply chains and are thereby beneficial to the country in the short and long term. These are segments in which there are no barriers preventing the entry of domestic companies such as patents. Investments made in science and technology tend to support the development of the supply chain as a whole, not only specific companies, generating win-win situations.

Keywords: Foreign direct investments; Agribusiness; Agricultural policy; Market share; Sustainable development; Neo-colonialism (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:lauspo:v:120:y:2022:i:c:s0264837722002939

DOI: 10.1016/j.landusepol.2022.106266

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