Brasília, 7/4/2003 (Agência Brasil – ABr) – In spite of high interest rates and sluggish growth in the economy as a whole, the farm sector has been breaking records this year. According to a survey by the National Agricultural Confederation (CNA) and the University of São Paulo (USP), farm sector GDP growth during the first four months of this year was 9.22%, compared to last year, a historical record.

Farm sector foreign trade has also been setting records. During the first five months of the year there was a trade surplus of US$9.13 billion (with US$11 billion in exports and US$1.9 billion in imports). That is 40.6% better than during the same period last year. The reasons cited for the good performance are: a favorable exchange rate, good commodities prices on international markets, and a record grain harvest that could be over 115 million tons.

Some other factors that have also made a difference and boosted exports are: investments, especially in soybeans; and strong performances by beef and poultry, lumber and pulp. "The fact is that the Brazilian economic growth is very weak at the moment. Things would be much worse if not for the stellar performance in the farm sector, which has been much more vigorous than the rest of the economy," says Getulio Pernambuco, of the CNA Economic Department.

In spite of the good performance so far this year, the outlook for the future is less attractive. Supply is about to outrun demand. "In order to export more we need markets. Unfortunately, international negotiations now underway have not brought forth the market access we need," explains Antônio Donizeti Beraldo, head of the CNA Department of Foreign Trade.

According to Beraldo, lack of progress in FTAA (Free Trade Area of the Americas) and WTO (World Trade Organization) negotiations may result in slower farm sector growth next year. "There has been a significant expansion of Brazil's farm sector. But world markets remain very much closed," emphasized Beraldo.

Even with the possibility of reduced income, the Brazilian farm sector remains optimistic. The CNA and USP project farm sector GDP growth of 5.3% for the year, along with record exports. "For the third year in a row, the farm sector is leading Brazilan growth," concluded Pernambuco. (AB)