Farmers in Brazil’s Mato Grosso, the country’s top soy state, are shunning once-heralded, genetically modified soy varieties in favour of conventional seeds after the hi-tech type showed poor yields.
“We’re seeing less and less planting of GMO soy around here. It doesn’t give consistent performance,” said Jeferson Bif, who grows soy and corn on a large 1,800-hectare farm in Ipiranga do Norte, near the key Mato Grosso soy town of Sorriso.
He said he obtained average yields of 58 bags (60 kg) per hectare with conventional soy last season while fields planted with GMO soy in the same year yielded 10 bags less.
Growers began illegally using genetically modified varieties of soy even before Brazil passed a biosafety law around four years ago permitting their use, in the hope of gaining higher yields and reducing production costs.
Around half of Mato Grosso’s soy is estimated to be genetically modified, but the tide is turning against it.
Part of farmers’ disappointment over the performance of the modified soy may stem from misunderstanding of the specific conditions in which its altered characteristics can bring rewards.
Uptake of GMO soy was fast in the state Rio Grande do Sul because of its resistance to glyphosate, which is used to kill the weeds that flourish there. But this feature is much less useful in Mato Grosso, where weeds grow much less thickly.
Farmers in Mato Grosso also benefit from better support from co-operatives and government bodies which provide advice and technical assistance and help them maximize yields even with conventional soy.
Another reason for Mato Grosso’s ongoing shift away from GMO soy is that trading houses and meat processors, conscious that some consumers strive to avoid GMO foods, prefer conventional soy and will pay a premium for it.
Soy is a key component of many cattle feed products.
Alexsander Gheno, agronomist at APAgri consultancy, said GMO soy may have other uses which could indirectly boost yields. By rotating planting of conventional soy with GMO soy, it could help break the cycle of diseases afflicting the crop.
But Gheno said the momentum that GMO crops have gained may see them chase out conventional soy in the long run, even if growers don’t prefer the high-tech varieties.
“Companies have been focusing their research on GMO soy more than on conventional ones. So in 10 years we could have 100 per cent of the area planted with GMO soy not because this was farmers’ choice exactly, but because development of new conventional varieties is getting scarce,” he said.
Credit Shortage Scares Brazilian Farmers
Despite favourable weather and near record output this season, growers in Brazil’s No. 1 soybean-producing state of Mato Grosso are worried about the effects of the global crisis on sales and profits.
Producers now fear that if the credit constraints continue in the coming months, demand for beans will remain slack and they will face problems buying inputs for planting next season.
“We haven’t seen any big forward selling of soy this season. It has been a war,” Silvesio de Oliveira, a soy producer in Tapurah in the north of Mato Grosso said.
He sold forward only 30 per cent of his crop, down sharply from 80 per cent a year ago.
Multinational companies like Bunge, ADM, Cargill and Louis Dreyfus account for nearly 90 per cent of soy financing in Brazil’s centre-west. They usually buy soy from farmers around planting season in exchange for inputs such as fertilizers or money, depending on the contract.
But as these companies have had a hard time raising resources on the international market, interest in buying has remained weak, farmers said.
They estimate forward sales totalled about half of the expected crop, sharply down from about 80 per cent a year earlier.
Buying interest rose a little in the past weeks as the availability of soy grew, but prices offered were too low to stimulate wide producer selling, said Marcelo Duarte, executive director at the state Soybean Growers Association (Aprosoja).
In Sorriso area, soy was traded at 34 reais per bag ($14.50), down 10 per cent from January.
“During the planting season, when soy prices were higher, exporters couldn’t find credit to pay margins (to hedge prices in the futures market), so they didn’t buy much,” Duarte said.
“This lack of liquidity could press down prices in the coming months. Trading houses may pay less and producers may have to sell their soy because it’s harvested already,” Duarte said.
Mato Grosso is expected to harvest 17.92 million tonnes of soy, up from 17.85 million tonnes in 2007-08, according to official estimates. Nearly 65 per cent of it has been harvested.