April 7th, 2015

Roberto Rodrigues

Agenda

1. Food Security: the role of Brazil

2. The Importance of Brazilian Agribusiness

3. Projections

4. Challenges and bottlenecks

5. Conclusions

If you desire peace, cultivate justice, but at the same time cultivate the fields to produce

more bread; otherwise there will be no peace.

- Norman Borlaug

3

10 / 15%

10 / 15%

4% 26%

26%

40% 17%

Map of undernourished population (% of total)

% increase in production

OECD - projection of food production by 2020

OECD projects to meet the 20% increase in world food production required to meet the market demand of estimated population levels in 2020. Brazil is by far the fastest growing agricultural producer, with output expected to rise by more than 40% from now to 2019/20. (OCDE, 06/2010)

• Tropical Technology

• Availability of Arable Land

• Human Resource

• Sustainability

• Agroenergy

Favorable conditions for Agribusiness in Brazil

38

57 57 58

193.4 198.5

90/9

1

91/9

2

92/9

3

93/9

4

94/9

5

95/9

6

96/9

7

97/9

8

98/9

9

99/0

0

00/0

1

01/0

2

02/0

3

03/0

4

04/0

5

05/0

6

06/0

7

07/0

8

08/0

9

09/1

0

10/1

1

11/1

2

12/1

3

13/1

4

14

/15

*

Tropical Technology - Grain harvests in Brazil

Source: Conab . Note: *6º Brazilian Grain Crop Survey – Mar/2015

Production (million tons)

Planted Area (million ha)

If today’s productivity per hectare were as low as it was in 1990, it

would have been necessary to have another 69 million hectares planted

with grains to achieve the same results

Harvest 1990/91 to 2013/14:

Production: + 234%

Planted Area: + 50%

5.0

10.1

2.3

12.7

1.1

3.4

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

POULTRY (+ 460%)

Brazilian Meat Production

Sources: ABIEC, UBABEF, ABIPECS.

In million tons

BEEF (+ 101%)

SWINE (+ 225%)

The “Low-Carbon

Agriculture” Plan (ABC), aims

to stimulate a new

sustainable agriculture,

reducing global warming

and mitigating carbon

emissions. ABC program

fosters 6 initiatives with goals

by 2020.

The Agriculture and Livestock Plan (PAP) for 2014/15 will allocate BRL

4.5 bi for Low Carbon Agriculture Plan. Each Producer has a credit limit

of BRL 2 million, annual interest rate of 4.5% to 5% and a repayment

period of 6 -15 years.

Plano ABC - Low Carbon Agriculture Plan

Sources: Observatorio ABC and MAPA.

Land Use - Brazil

Sources: IBGE, Conab, Abraf (2012), Icone.

Agribusiness in Brazil

Sources: CEPEA/USP, CNA, IPEA, MAPA and MDIC.

24% (BRL 1.18 tri)

30% 43% (USD 96.8 bi)

Jobs (2013) Exports (2014)

12% 29% 28% 31%

Inputs Agriculture Livestock

Industry Distribution

GDP in the agri-industrial system

GDP (2014)

Other Sectors

Other Sectors Other Sectors

Brazilian Foreign Trade (US$ billion)

Sources: MAPA and MDIC. Note: 2015* – accumulated Mar.2014 - Feb. 2015 . Prepared by GV Agro

Brazilian Agribusiness Trade Balance Brazilian Trade Balance

-5

-17 -16

20.4

80.1 78.8

04 05 06 07 08 09 10 11 12 13 14 15*

Exports

Imports

Balance

-0.4

-84.1 -82.7

13.2

-3.9 -3.9

04 05 06 07 08 09 10 11 12 13 14 15*

Agribusiness

Other Sectors

Total Brazil

Soy Complex - 25.7%

Forest Products - 17.1%

Meats - 16%

Sugar / Ethanol - 8.1%

Leather and Products - 7.4%

Coffee - 5.3%

Tobacco - 3.7%

Cereals - 2.3%

Others - 14.3%

Soy Complex - 32.5%

Meats - 18%

Sugar / Ethanol - 10.7%

Forest Products - 10.3%

Coffee - 6.9%

Cereals - 4,8%

Leather and Products - 3.6%

Tobacco - 2.6%

Others - 10.7%

Brazilian Agribusiness Exports - Main Products

Source: MAPA. Prepared by GV Agro

2004 (US$ 39.0 bi)

2014 (US$ 96.8 bi)

China - 22.8%

E.U. 27 - 22.1%

Asia (-China, -Mid. East) - 17.8%

Mid. East - 7.5%

USA - 7.2%

Africa (-Mid. East) - 6.8%

Aladi (-Mercosur) - 6%

East Europe - 4.7%

Mercosur - 2.4%

Others - 2.6%

2004

2014

29%

Brazilian Agribusiness Exports | Main Destinies

Source: MAPA. Prepared by GV Agro

51% E.U. 27 - 36%

USA - 14%

Asia (-China, -Mid. East) - 12.1%

China - 7.6%

Mid. East - 7.1%

Africa (-Mid.East) - 5.7%

East Europe - 5.1%

Aladi (-Mercosur) - 4.4%

Mercosur - 2.9%

Others - 4.3%

Outlook MAPA 2023/24 | Net Exports - Brazil

Sources: Outlook AGE/MAPA and Embrapa – Projections for Brazilian Agribusiness – 2013/14 to 2023/24.

Product Unit 2013/14Projection

2023/24Var. (%)

Cotton 1.000 tons 575 893 55%

Corn 1.000 tons 21,000 33,698 60%

Soybean (grain) 1.000 tons 45,297 65,244 44%

Soybean (meal) 1.000 tons 13,579 15,701 16%

Soybean (oil) 1.000 tons 1,374 1,626 18%

Beef 1.000 tons 2,068 2,889 40%

Poultry 1.000 tons 4,002 5,784 45%

Suine 1.000 tons 534 784 47%

Coffee Million bags 32 40 25%

Sugar 1.000 tons 27,154 38,801 43%

Orange juice 1.000 tons 2,094 2,626 25%

Milk Million L 138 185 34%

1. Infrastructure and Logistic:

Storage, Highways, Railways and Ports.

PPP (Public Private Partnership)

2. Income: Rural Credit and Insurance;

Minimum Price Guarantee Policy (PGPM)

3. Trade Polices: bilateral and regional negotiations

4. Technology: Valuation of Research Centers, Sanitary and Phytosanitary

Defense; Innovation and Productivity

5. Institutional Issues: Multiplicity of Agencies and Institutions

6. Organization: GPS X Mercosul

7. Communication

Challenges – Lack of Strategy

Solution: economic growth model based on investment and technological

innovation

Focus: improving the competitiveness of the Brazilian productive sector

Example: The agricultural sector has been adopting this model of growth

Conclusions

1 – Food security is essential for the

maintenance of Universal Peace.

2 – Brazil is capable of being a very important

player in the task of ensuring sustainable food

and energy security.

3 – Thus, it is necessary to build an appropriate

strategy.

Conclusions

4 – In democracy, public policies are

established by the desire of the majority of

society: public opinion.

5 – The pursuit of effective communication:

organizing the rural sector.

Conclusions