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The Colombian Cerrado

The 'Cerrado' Colombiano

(Note: 'Cerrado' is a large tropical savanna in Brazil that was initially thought infertile but subsequently converted into highly-productive areas for agriculture and livestock)

The same model that made Brazil into a global agricultural power will be implemented in the Colombian Orinoquía. If this gamble succeeds, it will be the greatest revolution in nutrition for the nation.

The world is amazed by something known as the Brazilian 'Cerrado.' The Economist magazine called it the great agricultural miracle and revolution of the farms in this South American country, and The Washington Post describes it as the engine of a powerful agricultural industry that threatens to overtake the U.S. as the world's breadbasket.

Many others are simply left speechless by this Brazilian feat of conquering the so-called 'Cerrado', or large tracts of land that just a few decades ago were covered with ghostly vegetation and considered unsuitable for agriculture. Today, this territory is recognized as the world's richest savanna in biodiversity and the most prosperous and thriving agricultural region, in which a significant portion of the soybean, corn, and other crops consumed by mankind is produced (see box).

How this economic miracle came to be is no secret. The Brazilians, with intensive and laborious research, themselves managed to adapt crops to the climatic and soil conditions of the region, invested in innovation and technology, developed infrastructure, and stimulated large poultry and oil companies.

Today, many countries want to borrow this model, but there are few who can still count on an available agricultural frontier to wage this bet. According to the Food and Agriculture Organization of the UN (FAO), over half the land available for global agricultural production is located in only seven countries, and one of them is Colombia. The other six are Angola, Congo, Sudan, Argentina, Bolivia, and Brazil.

This is already big news for the country and has led to many analysts talking about the need to take on the challenge like the Brazilians did. The former Minister of Finance, Rudolf Hommes, has asserted in his column for the Colombian El Tiempo that Colombia has both unused land reserves and ample aquatic resources to emulate Brazil.

The truth is that many in Colombia are already playing with the idea of developing the model of the Brazilian Cerrado. And the Altillanura (The High Lands), an extensive area in the Colombian Orinoco region, would be the perfect region to make this dream a reality.

Its territory goes to the eastern margin of the Meta River and extends from the town of Puerto López to Puerto Carreño, at the edges of the Vichada River and the Orinoco River, in the Vichada region. This is an area of about seven million hectares, of which four could be perfectly suitable for agriculture. This figure is not negligible. Currently, Colombia uses 4.9 million hectares for agricultural purposes. As they say, developing the Altillanura could almost double the country's agriculture.

This is encouraging, as the government of President Santos is betting on this project. The idea will become official state policy once it is included in the National Development Plan.

The Minister of Agriculture, Juan Camilo Restrepo, said that the Altillanura is the last great agricultural frontier left in the country, and if it can be transformed and developed, Colombia will have taken a huge social and economic leap forward, just as Brazil had done decades ago.

The topic is very interesting because the Colombian territory in question has many similarities to the Brazilian Cerrado. The soils are acidic, with low fertility, poor in nutrients, high in aluminum (which can be toxic) – in other words, it would have to be built up from scratch. This was not an impediment to the Brazilians, who through Empraba, the state agency for agricultural research (similar to the Corpoica in Colombia), managed to transform these arid lands into those suitable for cultivation.

The idea is to first develop, in the Altillanura, crops such as corn, rice, sorghum, soybean, and sugar cane, in addition to palm, rubber, and forestry.

The Key to Success

In order to convert this part of the country into the great agricultural project that is desired, the state's role will be crucial in respect to the provision of public goods and services. There remains a lot to do for the miracle of the Cerrado to become a reality in Colombia. According to the Minister of Agriculture, there are several tasks that the government must undertake.

First, as this is an environmentally fragile region (as shown by several studies), care must be taken so that any development that is done should be respectful of nature. For example, there are some vast wetlands that are part of the ecosystem of the Orinoco that should be protected to the fullest. Restrepo has indicated that the government shall commit itself so that any colonization in the region shall be as minimally destructive as possible.

The second challenge is that which also served as the crux of the challenge for the Brazilian Cerrado: research and technology. What was accomplished in Brazil by Embrapa will be executed by the Colombian Corporation for Agricultural Research (Corpoica) and the International Center for Tropical Agriculture (CIAT), the fifth largest research center in the world, which is based in Colombia. These two institutions have already signed an alliance to support applied research for the Altillanura. According to Juan Lucas Restrepo, the director of Corpoica, a plan for the technological development of the zone will be implemented in terms of foliage (grasses), genetic engineering, land reclamation, development of new seed varieties, pest control, and even computer simulations to adapt the region to any future climate change. There is already much ground that has been gained in this task, as the CIAT has already done development in this area in the past, and as the Minister of Agriculture said, there exists a scientific historical memory that will be valuable at this juncture. The expansive research center, a smaller version of the Brazilian Embrapa, will be located in one part of the Carimagua, a territory consisting of 22,000 hectares that belongs to the government.

Fundamental for all this to work is the terrestrial infrastructure, consisting of both communications and electrical infrastructure. The government understands that the only way to provide additional value to what is produced in the region is through both land and river routes, in addition to electrical conduits. The investments required on this front have been transformed into the National Development Plan.

Another critical issue that the government will have to resolve is that of land titling, as regulations are lax in this region. The Minister Restrepo is determined to advance the delivery of titles to individual farmers, and as part of this policy, the agency Incoder will deliver some 17,000 hectares of Carimagua territory to small and medium-sized farmers. There had been a large controversy during the last administration due to the possibility of distributing these lands solely to large investors.

The formalization of regulations is fundamental to the participation of small and medium-sized producers in this project. The company Ecopetrol is a good example of how there is sufficient room for small producers. In the region, the petroleum company is developing the most advanced plant for the production of ethanol extracted from sugar cane. As the company will not produce all the sugar cane, it will be associated with small and medium-sized farmers who can be the suppliers.

Success also depends on the manner in which the government encourages the settlement of farmers, who at the end of the day will be the ones who operate on the grand projects implemented in this region. This will also involve other parallel developments in which the government will have to intervene, such as housing, education, and health.

However, in a region like this, fraught with transportation difficulties, it is necessary to launch a business model that allows for economies of scale. In other words, it is necessary to foster the chains of productivity such as occurred in Brazil, where in addition to agriculture there existed the development of pig and poultry farming companies who were able to take advantage of raw materials such as corn and sorghum for animal feed.

To expedite this project requires the participation of private investors, and the government hopes to boost their presence not with subsidies but by creating the necessary framework to enable them to develop their businesses. To prevent a slowdown of participants, the government will redefine the Family Farm Unit (UAF), which is a measure that allows allocating public lands to individuals. Today, the UAF is too small for large-scale developments as required in the Altillanura. With this re-design, the government hopes that capital will soon reach the region.

The Pioneers

Strictly speaking, The Colombian Cerrado will not have to start from scratch. The first investors arrives less than 10 years ago and today are convinced that this project can be developed succesfully. Jaime Liévano, the president of La Fazenda (a company that produces corn and soybeans and has an integrated chain in the production of pork), has shown how, through research, the land can produce wonders. His company has developed corn with amazing performance, even comparable to the U.S. grain belt.

As always, some are less optimistic. The president of Fenavi, Jorge Enrique Botero, says there are still many bottlenecks to declare victory in this project; among them is the lack of infrastructure. "For now, the poultry sector will not bet on this area, as the limiting factor of the inability to transport what is produced there is plain to see."

The truth is that the issue of the Altillanura is already on the radar of many investors. Large employers with business vision, such as the Sarmiento and Santo Domingo families, have already set their sights on the area. Argentine and Brazilian investors are also eyeing the region with interest, and in the grain markets it has been confirmed that the multinational Cargill wants to expand its operations in Colombia and evaluate the possibility of producing corn and soybean in the Altillanura.

In summary, with so many eyes fixed on the Altillanura, and with the willingness of the government, this could prove to be the great food revolution for Colombia. To many, this still sounds too good to be true, but Brazil has demonstrated that miracles can happen.

See the interview with the Minister of Agriculture, Juan Camilo Restrepo, and an overflight of the area: Semana.com

The Brazilian Miracle

The Economist magazine notes how crops in Brazilian farms have increased in yield between 1996 and 2006 by more than 360%.

Beef exports were increased ten-fold and surpassed those of Australia as the second largest exporter worldwide.

Brazil today is the largest producer and exporter of orange juice, the leading exporter of ethanol and sugar cane, the largest grower of coffee, the second largest in soybeans, the third largest producer of poultry, and the fourth largest pork producer in the world.

To the astonishment of all, today Brazil is the fourth largest exporter of cotton, when just a few years ago it was a net importer.

All this has been achieved due to innovation, productivity, and indeed, tenacity.