RURAL CREDIT: A KEY FACTOR IN THE EXPANSION OF SOYBEAN PRODUCTION IN MATO GROSSO

Abstract

The state of Mato Grosso has recently become the leading soybean producer in Brazil. The growth of related activities (crushing, trade in machinery and input products, transportation and storage, services) has also been spectacular. Among the factors explaining this boom, agricultural credit has an original and very important role. At the same time as the State is transforming its intervention modes, the private sector is taking the relay. The agricultural financing system consists of a mix of public (principally for long-term investments) and private (productive expenses, such as seeds and other inputs) funds, together with the producers' own funds. The risks linked to the development of this capital-intensive production model make this system weak and unstable. The expansion of large-scale soybean farming in this frontier region may thus make producers dependent on multinational firms and have a significant social and environmental impact. The Brazilian government has lost much of its ability to affect the Mato Grosso soybean industry, except as regards infrastructure investments. What will the government choose: to improve the road system, use the Amazon River basin, extend the railway network, or some combination of all of these? How can civil society play a role in this choice?