What Are the BRICS Building in Africa?


This week, South Africa has hosted the leaders of Brazil, Russia, India and China for the 5th BRICS Summit in Durban. The meeting takes place amid growing African and global interest in the BRICS, and excitement about plans to launch a BRICS Development Bank.

But what is the role of these five countries in African agriculture – a sector hoped by many to be the engine of growth on the continent? Depending on who you ask, the BRICS are either supportive allies and drivers of growth — or land-grabbing new colonialists. African policy makers, though, are increasingly looking to the BRICS not only as a source of investment and technology, but also as a fount of examples to be emulated — whether in large-scale commercial farming or in boosting small farmers’ productivity.

For many years, diplomatic and business links have supported a flow of African agricultural development specialists to Brasília, Delhi or Beijing. However, this flow has sped up dramatically in recent years as the BRICS — and their supporters within the global agriculture policy community — strengthen their efforts to promote their ‘models’ of agricultural development as the key to unlocking Africa’s agricultural potential.

But what are the realities that lie behind these ‘models’ within the BRICS countries themselves? What are the national politics that lie behind new international drives to export these models? What are the political drivers and motivators of this new engagement in Africa, which has arrived after long histories of colonial and post-colonial development? How should Africa approach these new engagements: with open arms, or with sceptical caution?

New research by the Africa-based Future Agricultures Consortium on China and Brazil in African agriculture suggests that each of the countries that make up the BRICS is acting in Africa in very different ways. The research was presented for the first time last week at an international conference on the Political Economy of Agricultural Policy in Africa in Pretoria.

Much recent work on ‘the BRICS in Africa’ has emphasised the geopolitical scale, as these new players engage in areas dominated in the past by western donors and companies. This often gives a very general picture of ‘Rising Powers’ or ‘China’ and ‘Africa’, for example. Yet behind these labels, China, Brazil and India — for example — have very different interests and priorities, and within these countries there are battles between different approaches, reflecting domestic political debates.

Of course, the 55 countries which make up Africa are also hugely diverse, and any new encounter arrives on the back of a very particular history, shaped by development interventions since colonial times. Each country has its own agrarian history and political economy. So depending on the context, similar interventions — a commercial agricultural scheme, for example, or technical training — will have very different consequences. From the initial negotiation to the daily running of projects that are set up, the results vary widely.

From the colonial era and through post-colonial development, African policymakers and technical experts have learned to negotiate around technology transfer, economic reform or loan agreements. ‘Africa’ has not just been a passive recipient in many of these cases.

The same applies to these new encounters. But with new players, carrying with them different discourses and practices rooted in their own recent development experiences, the room for manoeuvre by African states may be increased. Different players can be traded off against each other: western donors for welfare and social protection, China for large-scale infrastructural development, Brazil for agricultural technology transfer, for example. But the range of choice presents dilemmas. Should Mozambique, say, go down the route of smallholder agricultural production, and low input agriculture, promoted by many western donors and NGOs? Or should it aim for large-scale commercial, mechanised agriculture, modelled on the Brazilian cerrado experience, or the large farms of northern China?

In many respects the arrival of new players on the scene in Africa has opened up the development game. The old, narrow conditions no longer apply, and African governments do not need to be constrained by the rules of Western development aid. Yet engagement never comes with no strings attached, despite the warm-sounding rhetoric of ‘South-South cooperation’, ‘mutual benefit’ and ‘political solidarity’. China and Brazil need Africa, just as Africa needs them. Africa’s resources, including its land, are critical both for longer-term global food security, particularly in the populous parts of Asia, and such low-cost resources, labour and market connections are vital for agribusiness and trade plans.

To understand the new encounters in development cooperation brought by the BRICS and others, we have to get to grips with the details, and the cultural, social and political relations at play, as well as the wider political economy that structures such engagements.

Whose interests are being served? Who wins and who loses? These questions will be keenly watched as Africa’s farmers, food producers and politicians look to partners in the South for a new future.


Emerging powers China, Brazil make plans to bypass U.S. dollar

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China and Brazil agreed on Tuesday to swap up to the equivalent of $30-billion in each other’s currencies if need be so that their fast-growing commercial ties will not suffer if a new banking crisis causes dollar trade finance to dry up.

The three-year agreement, signed before the start of a BRICS nations summit in Durban, South Africa, marked a step by the two largest economies in the emerging powers group to change global trade flows long dominated by the United States and Europe.

Brazil, Russia, India, China and South Africa represent together a fifth of global GDP but have struggled to convert their economic weight into political clout in the international arena.

“Our interest is not to establish new relations with China, but to expand relations to be used in the case of turbulence in financial markets,” Brazilian Central Bank Governor Alexandre Tombini told reporters after the signing.

Brazilian Economy Minister Guido Mantega described the deal, called a bilateral currency swap accord, as “a sort of umbrella agreement” but he did not spell out what specific areas or categories of trade would be affected.

Brazil’s vast mineral resources and agricultural products have helped fuel China’s industrial growth and feed its people while the returns have helped bring a new era of prosperity to the Latin American giant.

Bilateral trade totalled around $75-billion last year. Of Brazil’s $41.2-billion exports to China, iron ore accounted for 34 per cent, while soy and soy products made up 29 per cent and crude oil 12 per cent.

Electronics, machinery and manufactured goods figured heavily in Brazil’s $34.2-billion of imports from China.

Brazilian officials have said they hope to have the trade and currency deal operating in the second half of 2013.

Mr. Mantega said it would act as a buffer against turbulence in international financial markets dominated by the U.S. dollar.

“If there were shocks to the global financial market, with credit running short, we’d have credit from our biggest international partner, so there would be no interruption of trade,” he said.

Chinese officials at the signing made no comments but the People’s Bank of China said on its website the currency swap agreement was worth 190 billion yuan ($30.6-billion U.S.) and would facilitate trade and investment.

At the Durban summit, the group’s fifth since 2009, the heads of state of Brazil, Russia, India, China and South Africa are expected to endorse plans to create a joint foreign exchange reserves pool and an infrastructure bank.

These objectives reflect frustration among emerging market nations at having to rely on the World Bank and International Monetary Fund, which they see as still reflecting the interests of the United States and other rich nations.

The reserves pool of central bank money would be available to emerging economies facing balance of payments difficulties or could be tapped to stabilize economies during periods of global financial crises, according to documents outlining the plan that were obtained by Reuters.

Officials say the BRICS are considering injecting an initial $50-billion into the new infrastructure bank. But the specifics of the scale, location and structure of the institution were still being thrashed out.

“It’s a huge job with a lot of difficult issues to be agreed on. In principle, there is some progress,” Russian Deputy Finance Minister Sergey Anatolyevich Storchak told Reuters.

The bank would support the ever-growing financing needs in emerging and developing nations for roads, modern ports, and reliable power and rail services.

The BRICS leaders were also due to discuss trade and investment relations with Africa, at a time when many on the economically buoyant continent are seeking more balance and a different focus in trade and investment, especially from the giant of the group, China.

South African President Jacob Zuma on Tuesday welcomed new Chinese President Xi Jinping, who is making his first visit as head of state to Africa.

In Tanzania on Monday, Mr. Xi told Africans he wanted a relationship of equals that would help the continent develop, responding to concerns that Beijing is only interested in exploiting its abundant raw materials.

Source: The Globe and Mail

Know the new manufacturing company that just closed a partnership with Brazil?

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Sunnen Products forms joint venture with Brazilian distributor

Maplewood-based Sunnen Products Co.has formed a new joint venture with its longtime Brazil distributor, Hontech Ltda.

The new company, Sunnen do Brasil, will be located in Sao Bernardo do Campo SP, Brazil, and led by Hontech President João Bahia.

For nearly 20 years, Hontech has been the exclusive Brazil distributor of Sunnen honing systems and tooling. The new venture will manufacture abrasives locally and serve Sunnen’s customer base in Brazil.

“This new operation will enhance our competitiveness in the region and reduce lead times on key products,” Sunnen Products Chief Operating Officer Mike Haughey said in a statement. “Brasil has been, and will continue to be, one of the fastest growing economies in the world.”

Hontech, formed in 1993, currently has 30 employees and seven sales representatives serving manufacturing clients including Eaton, Volkswagen, General Motors, Fiat and Bosch.

Sunnen has exported its honing machines, tooling, abrasives and fluids since the 1930s. It has facilities in Belgium, China, the Czech Republic, France, Italy, Poland, Russia, Switzerland and the United Kingdom. The company also has a network of more than 50 factory-authorized distributors worldwide.

Sunnen Products Co. reported 2012 revenue of $107.5 million, down 1 percent from $108.6 million in 2011.

The company is owned by the Joseph Sunnen Trust for the beneficiaries of the Sunnen family, and it has more than 600 employees worldwide.

Source: St. Louis Business Journal

Have you seen what the new bioengineering that Monsanto wants to deploy in Brazil?

Soja-Imagem-SXCMonsanto to debut GMO soy in Brazil, pending China

Monsanto Co hopes to roll out a new bioengineered, worm-resistant soybean seed for planting in Brazil next season, the firm’s local president said, but a successful launch is tied to approval from top-buyer China.

So-called Intacta RR2 Pro is the first genetically modified seed Monsanto has developed exclusively for South America and as it is designed to produce higher yields, it could help Brazil surpass the United States as the world’s top soybean producer, building on this year’s record crop.

But not without a green light from China, which buys 70pc of Brazilian soybeans and could create a major headache for Brazilian farmers and exporters next season if it does not approve the technology. More than 40 countries have approved the technology, but China has not for unknown reasons. The situation highlights how much Brazil’s giant farm sector and overall economy has become hitched to the Asian giant, which is its top trading partner but can be a fickle customer.

“We expect to have Chinese approval in the coming months so that when soybean planting starts in October or November, farmers can plant Intacta,” Monsanto President in Brazil Rodrigo Santos told Reuters in an interview. He said the Chinese had completed technical studies on the seed and Monsanto is expecting an official sign-off from the agriculture ministry. 

The recent regime change in China may have slowed the process, Santos said. Intacta seeds were planted in test fields across Brazil this year and if any of them make it into cargoes bound for China, it could give the country reason to reject an entire shipment.
The Chinese have already spooked the local soybean market this season by canceling orders because of slow delivery from Brazil’s congested ports. Futures prices fell on the news.

Brazil’s soybean output has swelled thanks to ample Chinese demand and to GMO technology Monsanto began selling in Brazil in 2005, known as Roundup Ready. It is present in 85 percent of Brazil’s soy fields and is designed to withstand an herbicide known as glyphosate that kills invasive weeds.

Source: The Nation

German automaker Audi back to Brazil?


Audi mulls fresh go at car production in Brazil

German carmaker Audi has said it’s contemplating having another shot at car production in Brazil after stopping its T3 operations some years ago. It could draw from the experience of its parent company, VW.

German carmaker Audi said it was considering an option to resume car production in Brazil. “A decision has not yet been reached, but we’re in the process of looking into it and will come to a conclusion within the next six months,” the head of Volkswagen’s Latin America operations, Michael Macht, said in Sao Paulo.

As Audi’s parent company VW marks six decades of its presence in Brazil, the Latin American country looks attractive to many auto makers, such as BMW which announced last year it was planning to launch a production facility in the world’s sixth-largest economy in 2014.

For Audi, it would be a second attempt to put down roots in Brazil after it ended its T3 production in the country in 2006 for profitability reasons. A mere complete knock down facility (CKD production) would not be a lucrative option for the Ingolstadt-based German luxury carmaker though because of high import duties.

Investment offensive

Like many rival auto makers, Audi is increasingly looking to countries outside the European Union, with the bloc continuing to be in the grip of a protracted debt crisis. The company had announced earlier it was also building plants in Russia and Mexico and may expand operations in Hungary and China. But it noted Brazil would definitely be “a very interesting market.”

Twelve-brand parent company Volkswagen said it was highly pleased with business operations in Brazil, pointing out that the firm had a 21-percent market share in Brazil, second only to Fiat.

VW announced it would invest 3.4 billion euros ($4.4 billion) in Brazil by 2016, with available resources to go into both production and infrastructure.

Source: dw.de

Did you know that Brazil expects to produce two million tonnes of fish per year by 2014?



Brazil Expects to Produce Two Million Tonnes of Fish by 2014

The Harvest Plan for Fisheries and Aquaculture, which makes $ 4.1 billion in credit available to producers, predicts that by the end of 2014 Brazil will be producing two million tonnes of fish per year.

To stimulate production, while favouring family farmers and fishermen, the Federal Government decided in the Harvest Plan to increase, from 5 to 20 tons, the volume of fish under the Food Acquisition Program (PAA).

The fish purchased through the programme will be allocated to school feeding, to popular restaurants, food banks, community kitchens and even the food baskets distributed to the Federal Government.

Fish can also be purchased by the organisations themselves to be sold in the market.

To participate in the programme, the producer must be framed in the National Programme for Strengthening Family Agriculture (Pronaf), facing family farmers, agrarian reform settlers, indigenous and other traditional peoples and communities or rural family enterprises.

Each family has the right to sell between $ 4500 to $ 8000 per year in the Federal Government, in various forms.

As part of the programme, people can participate in the PAA individually or through their cooperatives or other organisations.

To participate as an individual, beneficiaries vendors must obtain a Statement of Fitness for Pronaf (DAP) in previously authorized institutions, as officials Technical Assistance and Rural Extension or Federations and Confederations Farmers, through their unions. In the case of artisanal fishers and aquaculturists family DAP can be provided by the MPA.

Source: The Fish Site