Brazilian Economic Policy and Agribusiness: A Comparison with Zimbabwe, South Africa, and Successful Cases

Hugo Fran?a Pacheco

Agribusiness is one of the main drivers of the Brazilian economy, responsible for a significant portion of exports and the trade balance surplus. However, the economic policies adopted throughout history have directly impacted this sector, varying according to the ideology of the ruling government. Despite being an agricultural powerhouse, Brazil faces challenges that, at times, can be compared to those encountered by countries like Zimbabwe and South Africa, which suffered the consequences of land expropriation and redistribution policies without proper economic planning. These nations adopted measures aligned with totalitarian regimes, where private property was weakened, and the productive sector was devastated. In contrast, countries like Australia, Canada, and the United States demonstrate that policies protecting private property and technological investments can lead to sustainable agribusiness growth.

Brazilian Economic Policy and Agribusiness Over Different Governments

1. Liberal Governments and the Strengthening of Agribusiness

During periods when liberal or center-right governments were in power, such as during the administrations of Fernando Henrique Cardoso (1995-2002) and Jair Bolsonaro (2019-2022), agribusiness received significant incentives. Policies promoting production, facilitated rural credit, and international trade agreements strengthened the sector. For example, under the Bolsonaro government, exports to China and Arab countries expanded, and bureaucratic barriers for agribusiness were reduced.

1. Leftist Governments and Pressure on the Sector

During the administrations of Luiz Inácio Lula da Silva (2003-2010; 2023-present) and Dilma Rousseff (2011-2016), there was an increase in land regulation and a greater push for agrarian reform, often leading to conflicts between rural producers and social movements such as the MST (Landless Workers’ Movement). Although agribusiness remained strong due to high external demand, legal insecurity regarding land ownership and increasing taxation created challenges for producers.

1. Impact of Economic Policy on the Agricultural Sector

The adoption of restrictive fiscal policies and selective subsidies impacted the sector. The economic instability during the 2014-2016 recession, under Dilma Rousseff’s government, created an uncertain scenario for agribusiness investors, reducing production growth. Dilma’s impeachment and the transition to Michel Temer (2016-2018) restored confidence in the sector, with regulatory flexibility and investment stimulus.

Current Policies for Agribusiness Under Lula’s Government

Since 2023, with the return of Luiz Inácio Lula da Silva to the presidency, the government has adopted policies reflecting an interventionist approach, similar to governments aligned with state-controlled production systems. Some key measures include:

• Environmental Regulation and Supervision: The Lula government has reinforced stricter environmental policies, imposing new guidelines for sustainable land use and deforestation control. However, it is crucial to highlight that the expansion of Brazilian agribusiness is not driven by opening new areas but by increasing productivity through investments in research, technology, and innovation. Brazil is a global leader in adopting sustainable practices, balancing high production with environmental conservation, making the sector an example of efficiency and innovation on the world stage.
• Rural Credit and Incentives: The Lula government initially announced the 2023/2024 Agricultural Plan as a measure to support agribusiness. However, the program was recently suspended, causing uncertainty among producers and investors. The lack of clarity regarding the continuation of this incentive has raised concerns, especially among small and medium-sized producers who depend on these credit lines to maintain production and technological innovation.
• International Relations: The government has sought to strengthen trade partnerships, primarily with China and the European Union, while facing diplomatic challenges with countries critical of Brazil’s environmental policies.
• Agrarian Reform and Land Conflicts: The current administration has reactivated agrarian reform programs and strengthened social movements such as the MST, raising concerns about legal security in rural areas and the risk of land expropriation without proper planning.

Although some economic incentives continue, increased regulation and pressure from social movements on land ownership generate uncertainties for the sector.

Comparison with Policies in Zimbabwe, South Africa, and Successful Cases

1. Zimbabwe: Expropriation Without Planning and Economic Collapse

Under Robert Mugabe’s government, Zimbabwe implemented land expropriation without compensation for landowners, under the argument of correcting historical inequalities. The lack of planning resulted in a drastic decline in agricultural production, hyperinflation, and an unprecedented economic crisis. This model of expropriation without legal security proved disastrous for the country’s economy.

1. South Africa: The Path to Expropriation Without Compensation

South Africa is debating land expropriation without compensation, promoted by the Economic Freedom Fighters (EFF) party and partially supported by the African National Congress (ANC). Legal insecurity has led to capital flight and concerns in the agricultural sector. In Brazil, discussions promoting land expropriation and strengthening radical social movements could serve as a warning for agribusiness, given the historical instability in countries that have adopted similar policies.

1. Success Cases: Australia, Canada, and the United States

Unlike Zimbabwe and South Africa, which failed due to a lack of legal security and destruction of the productive infrastructure, countries like Australia, Canada, and the United States demonstrate how protecting private property, innovation, and structured investments can strengthen agribusiness:

1. Australia: The country balances sustainability and innovation with free-market policies and legal security, making it one of the largest exporters of beef and wheat.
2. Canada: With policies incentivizing agricultural modernization and protecting private property, Canada has ensured high productivity and stability for sector investors.
3. United States: One of the most successful examples, the U.S. agribusiness model combines a free market, advanced technology, and strong property rights protection, making it the world’s largest exporter of soybeans, corn, and beef.

Conclusion

Brazil holds a privileged position in global agribusiness but must learn from the mistakes of countries like Zimbabwe and South Africa to avoid decisions that could compromise its economic stability. At the same time, it should take inspiration from nations with well-structured policies, ensuring a secure and predictable business environment. Protecting private property, technological incentives, and strategic trade agreements are fundamental factors to guarantee sustainable agribusiness growth and consolidate Brazil as an agricultural powerhouse while avoiding policies that resemble totalitarian regimes, which have already proven unsuccessful in other nations.