INTERVIEW-Enviromental laws reshaping face of Brazil farming
* Protecting forests makes intensive farming necessary
* Expanding crop area to crowd out cattle pastures
* Delicate balance between food needs and environment
By Karl Plume
NEW ORLEANS, Nov 5 (Reuters) - Laws designed to limit deforestation in Brazil will increase the need for more intensive farming and ranching to keep up with rising world demand for food, the governor of Brazil's largest agricultural state said on Thursday.
"It's not going to be easy because we are not clearing more land in Brazil for agricultural purposes so we have to set up a strategy to intensify and turn low productivity pastures into high yield cropping areas," said Blairo Maggi, governor of Mato Grosso state.
Crop production will expand into cattle pastures, said Maggi, who also is president of Grupo Andre Maggi, one of Brazil's largest soybean producers and exporters. Ranchers will have to find ways to maintain cattle production using a far smaller area, he said through an interpreter on the sidelines of a global soybean conference.
The delicate balance between environmental protection regulations and the ever-rising global demand for food are key hurdles for Mato Grosso and other states in the South American agricultural powerhouse.
Infrastructure improvement is also crucial for Brazil, the world's No. 2 soybean producing country, to realize its agricultural potential in the decades ahead, Maggi said.
"Conversions are not going to happen in every pasture because many are in low quality areas. But there are pastures in high quality areas that can be used for cropping purposes. This is the type of area we should be targeting now."
Such a plan would mean less pasture for ranchers, who currently occupy about 30 percent of the land area in Mato Grosso and produce on average about one head of cattle per hectare.
Condensing cattle operations without reducing production would be costly, but Maggi said he envisions more cattle production operating side-by-side with row cropping. Income from strong grain and soybean prices could offset the increased costs of raising cattle on less land.
"There are a lot of costs involved in converting the land. The market will have to handle that."
RISING FOOD DEMAND
Accelerating demand for food from a growing and ever more affluent population in the developing world is increasing demand for animal protein and feedgrains, like corn and soybeans, needed to feed livestock.
Mato Grosso state is Brazil's largest soybean producing state with the nation's largest cattle herd. About 30 percent of the landlocked state's area is devoted to cattle production and about 8 percent is for agriculture.
Traditionally Brazil has relied on Mato Grosso for quickly expanding cropping area during favorable market conditions, but stricter environmental laws have sharply reduced clearing of Amazon forest for farming.
In the 2003/04 crop year, 1.1 million hectares of forest were cleared for agricultural land, but this year the area cleared was ten times smaller.
Maggi touted his state's environmental preservation efforts, but stressed the need to raise food output.
"We need to not be too passionate about environmental questions because people need to eat," he said.
Brazilian farmers are in a difficult position, bound by the toughest preservation laws in the world while having to compete with other agricultural producers globally that are not bound by such strict regulations.
Still, Maggi said Brazil should overtake the United States as the world's top soybean producer and exporter in the next 10 to 20 years, His outlook is slightly more conservative than others in recent years, which put the time frame for Brazil to overtake the United States at five to 10 years. (Reporting by Karl Plume; Editing by David Gregorio)
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