Challenges for the corn supply chain in Brazil: from investments in logistics infrastructure to...
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Challenges for the corn supply chain in Brazil: from investments in
logistics infrastructure to regulation of biotechnology
Profa. Dra. Andréa Leda R. OliveiraAgribusiness ManagementScholol of Applied SciencesUniversity of [email protected]
Prof. Dr. José Maria F.J. SilveiraInstitute of EconomicsUniversity of [email protected]
University of Campinas
Scholol of Applied Sciences
Laboratory of Agribusiness
Ravello, ItalyJune 18-21, 2013
• How the new logistics projects in Brazil will be affected by
segregation between GM and nonGM crops? What are the
main impacts?
• How these impacts would affect the competitiveness of
maize in the international market?
Questio
ns
Challenges
Methodolog
y
Results
Conclusion
s
Questions
Agricultural Areas: frontier regions booming
Adoption of GM crops in Brazil: rapid growth
10 years: GMO areas increased approximately 12 times
2002: 3.0 million ha 2012: 36.6 million ha
GM maize: 53% of maize area in 2010.
Challenge
s
Territorial extension and load transport, selected countries. Notes: 1) Total territorial extension minus areas covered by water 2) Does not consider air and pipeline transportation. Source: CIA World Factbook (2010) for territorial extension; Bureau of Transportation Statistics (2010), International Transport Forum (2010) and CNT (2013) for transport matrix apud OLIVEIRA, 2011.
17.0
9.2
8.5
9.2
7.6
Territorial extension — land1
(million km2)
Russia
Australia
Canada
USA
Brazil
88%
49%
21%
48%
41%
61%
2%
11%
11%
50%
4%
13%
Rail Road Waterway
Russia (2009)
Australia (2008)
Canada (2006)
USA (2008)
Brazil (2012)
Transport matrix2
55% 35%
9%
Challenge
s
Transportation in Brazil
Logistical Challenges in Brazil Challenge
s
• The capacity to offer differentiated products (traceability and
segregation grains) with greater efficiency and lower costs will be a
significant competitive factor between grain producing countries.
• Brazilian Logistics System: attempts to arrange transportation of
standardized product and big volumes.
• New challenges: meeting the demand for differentiated products that
require adjustments in the current logistics system.
Challenge
s
Spatial Equilibrium Model Methodolog
y
MCP Methodolog
y
Model Flowchart
Tests for non GMO
Supply Regions
DemandRegions
International Demand
Export Ports
Transhipment
waterway port
roadway
railway
waterway
maritime
Methodolog
y
Roadway
Railway
Waterway
Sea Port
Water Port
Corn production
Map Legend
SUPPLY REGIONS
• Scenario 0: trade flows are made based only on transportation costs.
• Scenario 1 (Full Segregation): Costs of strip and PCR (Polymerase
Chain Reaction) tests were added. The strip tests varied according to
the quantity of transfers/transhipment points according to the
transportation route. PCR tests were made in the storage before
shipment, at the port of shipping for export and also on the ship, total
3 PCRs. The costs of testing and storage were obtained through interviews with
the main traders and laboratories in Brazil.
Methodolog
y
• The “full segregation system” generated a negative impact of 4.5% on
trade.
• Analyze the losses U.S. dollars, reaching almost US$718 million.
This amount represents 28% of foreign exchange generated by
exports of Brazilian corn in 2011.
Tests and storage expenses: US$506 million
International trade reductions: US$212 million
• Scenario 0: 100% of exports were made by intermodal routes.
• Scenario 1:
• only 29% of corn destined for foreign markets were made by
intermodal options.
• 71% of intermodal routes are no longer competitive, giving
priority to highways and increasing the transportation costs.
• >>>> impacts in the new projects >>>>
Results
Conclusions
• Using the MCP model proposed for the transfer of Brazilian corn, it was
possible to verify the effects of the implementation of the Cartagena
Protocol.
• With segregated storage and tests to identify the GMO´s throughout the
routes there is an increase of the cost of transport.
This causes a reduction in production, resulting in a fall in
commercialization, especially of the international market that
demanded the largest number of tests, reflecting a decrease in
competitiveness of Brazilian corn.
Also, another deficiency identified was the reduced numbers of
laboratories to perform the tests.
Conclusions
• The Cartagena Protocol also imposed an increase in the opportunity
cost by adopting a new technology.
• At the present time, Brazil faces the challenge of reducing its deficit in
storage and transportation capacity, a process which is being based on
increased efficiency from agility and taking advantage of scale
economies and scope.
• The imposition of identity conservation systems on a large scale would
not only mean diverting the resources necessary to accompany the
Brazil’s agricultural production growth rate, but also create uncertainties
as to the type of investment that should be made.
Challenges for the corn supply chain in Brazil: from investments in
logistics infrastructure to regulation of biotechnology
Profa. Dra. Andréa Leda R. OliveiraAgribusiness ManagementScholol of Applied SciencesUniversity of [email protected]
Prof. Dr. José Maria F.J. SilveiraInstitute of EconomicsUniversity of [email protected]
University of Campinas
Scholol of Applied Sciences
Laboratory of Agribusiness
Ravello, ItalyJune 18-21, 2013
THANK YOU...
Results