RONDONOPOLIS, Brazil — This Amazon nation's drive to become the world's breadbasket hinges on farmers such as Carlos Augustin, who grows cotton and soy in an area that would cover more than half of the San Fernando Valley.
Augustin's giant agricultural complex houses a cotton gin, dormitories for 300 migrant laborers and a $3-million fleet of cotton harvesters.
Such complexes are designed with one goal: to outproduce rivals from Australia to America. The strategy appears to be working.
In the last five years, Augustin and other large farm owners have turned their nation into an agricultural superpower, making it the world's biggest exporter of many agricultural products.
The South American nation now supplies sugar for Nigeria's bakeries, chicken for Hong Kong's restaurants, tobacco for Germany's smokers and coffee for Japan.
Soaring demand in China has fueled much of Brazil's growth. More than 60% of China's orange juice imports now come from Brazil, which also supplies a third of the Asian nation's soybean and tobacco purchases
Brazil exported $27.6 billion in agricultural products last year and imported goods worth $3.2 billion. That agricultural trade surplus of $24.4 billion was the biggest in the world and is crucial to Brazil's efforts to pay foreign debts and keep its economy humming.
"Agribusiness is a matter of survival for Brazil," said Carlo Lovatelli, president of the Brazilian Assn. of Agribusiness in Sao Paulo.
Brazil's focus on creating large farms to grow crops for export is not without cost. Many smaller farmers are being pushed out of business. And some Brazilians worry that the country is focusing too much on commodities such as cotton and oilseeds for the global market, rather than the "foodstuffs that can actually be consumed by the local people," said Vicente Puhl, a leader of a coalition of social organizations.
The agricultural boom also is responsible for much of the deforestation occurring in the environmentally sensitive Amazon region.
Government officials acknowledge that loggers, ranchers and farmers gobbled up 10,088 square miles of Amazon rain forest in the 12-month period ending last August, an area about the size of Massachusetts.
"Their ambition is destroying nature," said Jose Tadao, a representative of Brazil's Landless Workers Movement and an advocate for small-scale farming.
Environmental groups such as Greenpeace are fighting the expansion into the rain forest.
Others are arguing that deforestation could ultimately limit Brazilian agriculture. Paulo Moutinho, research coordinator for the Amazon Institute of Environmental Studies, believes the deforestation could eventually change Brazil's — and Earth's — climate, reducing rainfall and the supply of water for irrigation.
Almost half of the deforestation is occurring north of where Augustin farms, in the state of Mato Grosso, the center of Brazil's agricultural expansion. In June, Greenpeace bestowed its "Golden Chainsaw" award, for the Brazilian voted most responsible for Amazon destruction, on Blairo Maggi, the state's governor and owner of a farming concern that controls nearly 500,000 acres of soy, cotton and corn plantings. Earlier this year, Maggi's environmental chief was arrested by Brazilian authorities investigating the relationship between government officials and loggers.
Maggi, the world's largest soy producer, defends the nation's emphasis on large agribusiness. "Small properties in Mato Grosso don't have economic viability," Maggi said during a recent meeting with foreign journalists. "You can only survive if you have large volume."
Brazil has always been rich in land and water, the two key ingredients for farming, but it took a confluence of events to turn the nation into an agricultural power. It began with a change in economic policy in the 1990s, repealing a tax that made most agricultural exports a losing proposition, said Agriculture Minister Roberto Rodriguez.
Import duties on farm equipment, seeds and fertilizer also were slashed. Farmers now pay a 14% tariff compared with 20% in 1998. And when the Brazilian currency, the real, was devalued in 1999, the export market zoomed. Agriculture accounted for about 31% of the nation's gross domestic product last year.
"What really explains the growth of Brazilian agriculture is entrepreneurship, good science, access to good land and good weather," said Mario Jales, senior researcher at ICONE, a Sao Paulo think tank.
Brazil is spending millions of dollars on research to transform arid cerrado, or savanna scrubland, into productive farmland. It is using the World Trade Organization and other international trade agreements to challenge U.S. and European subsidies and open up markets.
In a complaint brought by Brazil, the WTO ruled in June 2004 that U.S. subsidies to cotton farmers distorted world prices by encouraging overproduction. The U.S. lost an appeal in March. The Bush administration is now working with Congress to bring its farm policy into compliance with the WTO.
And in April, a WTO panel agreed with Brazil, Thailand and Australia that European Union nations illegally export subsidized sugar, driving down prices on world markets. Brazilian trade officials said they were considering taking similar action against U.S. soy subsidies.
Previously, South American nations viewed industrialization as the primary engine of economic development, said economist Mailson da Nobrega, a former finance minister
But now, "if you look at Australia, New Zealand, Denmark, they are economic powers with strong agricultural sectors, and we can do the same," he said.