Along the road running to the horizon from here is some of Brazil's barest and meanest-looking land. It is dusty brown in the dry season, deep red underneath, and so old and worn that it bears nothing but sickly weeds and stunted trees wrenched into foreboding twists and knobs.
This does not look like a promising site for an agricultural boom. But, in fact, it could be Brazil's future corn belt, 120 million virgin acres that need no more than some zinc fertilizer and a cheap irrigation system to produce three good grain crops a year.
Just off the road here, down a long slope toward a river, is a small beginning--Dirceu Cortez's lovely, two-mile spread of wheat, deep green pea plants and yellow corn. "You'd never believe it," Cortez said, "but this is good land. We could feed the whole country from farms like this."
Cortez is almost right, but for all his first-year enthusiasm, he doesn't see much chance that such a thing will happen. He is in business because of a $60,000 government loan for irrigation at a heavily subsidized interest rate. In Brazil this year--with the annual inflation rate well above 100 percent--that means at least 50 percent.
Since Cortez took the loan, the subsidized rate has risen to at least 100 percent, and Brazil's cash-strapped central government has precious little money left to hand out.
"We have so much potential in this country, so much that could be done," said Cortez one afternoon at his farmhouse, sipping tea brewed from herbs that grow wild on the savannah. "This is what we should be doing, out developing our resources. But what is happening? We are just mortgaging the country to pay foreign bankers."
In that mildly delivered remark was all the frustration Brazilians feel after nearly three years of recession and a foreign debt payments crisis have brought one of the developing world's longest and most successful economic spurts to a standstill.
Nowhere is the sense of lost opportunity stronger than in agriculture. Here in the central savannah and elsewhere in the interior is the world's largest unused supply of arable land. And yet, food production appears to be dropping in a country that imports up to $1 billion in food a year and still is left with approximately 38 percent of its population malnourished.
Agriculture is both the story of Brazil's immense potential to grow and the complex problems it must overcome to successfully reignite its development.
"Brazil is a lot like what it was 500 years ago--we have all our growth ahead of us," said Renato Ticoulat, the president of the Brazilian Rural Society. "But there must be basic changes. Because in fact under our concept of development, agriculture has been retarded, inefficient and unproductive."
While Brazilian industry was raised into Latin America's most powerful base in the last generation, agriculture has paid a hidden price. It has been decapitalized as Brazilian resources have been sucked into the new urban centers, and the countryside has been depopulated--despite Brazil's 2.4 percent population growth rate--by a massive rural-urban migration.
Meanwhile, Brazilian governments, unwilling to attack root problems in land ownership and rural living conditions, have added to its farmers' problems with massive, quick-fix subsidy programs and other incentives that have helped divert millions of acres from basic food production to export and industrial crops.
Now, with the country short on dollars and under pressure from foreign banks, the government has begun the painful process of withdrawing subsidies from farmers who have grown dependent on them and who argue that they cannot produce without them.
Even government officials say they expect this will result in a drop in agricultural production, followed by a critical search for programs that will allow Brazil to exploit its immense resources.
Officials, economists and farmers say that success--as elsewhere in Brazil's evolving economy--will depend on the country's will to attack fundamental problems that its meteoric growth has helped it avoid in the past.
"We lack resources now, and we have to correct," said Agriculture Minister Amaury Stabily. "We have to start taking action in the social area."
If Brazil is successful, it could easily support a new wave of prosperity on its agricultural product alone. Already the world's second largest food exporter after the United States, Brazil currently is farming about 50 million acres, and much of that inefficiently. But in reserve are approximately 300 million acres.
In the savannah area alone, according to government studies, Brazil could produce 150 million tons of food and 8 million tons of meat annually by the year 2000--more than double the current total agricultural product and enough to feed 200 million people. Brazil's population is now close to 120 million.
That kind of development also could be invaluable for other Third World countries. Brazil is the first country to develop technology for farming savannah land, which is also found in wide belts across food-poor Africa. Already, developing countries across the Southern Hemisphere have sought out such Brazilian innovations as species of protein-rich soya that will grow in tropical zones.
And yet, Brazil's general agricultural performance during the past two decades has been less an example to other countries than a model case of the damage and imbalances caused by rapid industrialization in a poor nation.
As in many Latin American countries, the heavy industrialization that began to accelerate in the country in the late 1950s led to a massive migration from the farms. In 1964, when the Brazilian military took power and began to push the industrial development even further, about one-third of Brazilians lived in cities. Now two-thirds are urban residents, and although industrial growth is stalled, the migration continues at a rate estimated at up to 1.4 million persons per year.
More importantly, however, has been an accompanying transfer of national wealth from farmers and rural residents to industries and cities. Government economic policies were in effect designed to shift the capital through measures such as agricultural price controls, export taxes and an overvalued exchange rate so that industries would have funds to invest and expand.
Now, Brazilian country-dwellers lag hopelessly behind the urban population. Although more than 40 percent of jobs are still in rural areas, the sector produces only 12 percent of the gross national product and receives only 11 percent of incomes. An average salary for a farm employe is about one-third of that of a factory worker, and at retirement the rural worker receives a pension of one-half of Brazil's minimum urban salary--or $37 a month.
"Agriculture has become completely demeaned in its social image," said Ticoulat. "It came to be considered an activity for people of low income and low intelligence."
By the mid-1970s, Brazil's industrializing economy began to distort even the balance of crops in industrial production. Eager to pay an ever-expanding bill for imports of industrial goods and petroleum, the government began to grant incentives to export crops such as soya and oranges. Agricultural products still account for more than 50 percent of Brazil's foreign earnings, despite their low share of the overall economic product.
Then, in 1979, Brazil began a massive program to substitute gasoline powering automobiles with alcohol refined from sugar cane. The result is that 5.5 million additional acres of sugar cane will be in production by 1985 to produce alcohol fuel--and much of the land is being coverted in rich southern farming areas from traditional food crops.
These pressures have had destructive effects on the country's food supply. Between 1972 and 1981, production of soya grew at an annual rate of 16.6 percent and oranges at 11.67 percent per capita. But production of Brazil's staple foods--black beans, cassava, rice and others--remained stagnant in per capita terms, or in the case of beans, dropped by 1.34 percent a year.
Overall, agricultural production grew at the rate of about 5 percent a year between 1970 and 1980, almost half that of industry. But for Brazilians, particularly the poor, there were less available staple foods.
Over the years Brazilian opposition economists, the Catholic Church and the farmers called on the military government to address the underlying problems hindering agriculture, such as unequal distribution of land and the poor wages paid farm laborers.
As in its overall economic policy, however, the government chose to avoid these structural and social issues by promoting rapid growth, which, it hoped, would solve some of the problems more easily than controversial political reform programs.
Year by year, the government pumped mounting subsidies into the farming sector, hoping to counterbalance the effect of controls on food prices and encourage higher production.
Brazil's agricultural production grew, but the subsidies only added to the long-term problems. Meanwhile, the expense for the programs quintupled in constant currency between 1969 and 1979, when another large subsidy stimulus was initiated. By 1980, 40 percent of government revenue was spent on stimulating agriculture, and in 1981 the total sum spent was $11.4 billion. Export crop growth again was improved while food staples lagged.
While many large farmers used the credits to buy new equipment and modernize their operations, there were also signs of conspicuous consumption after the recent credit increases.
The government finally has been forced toward sharp reductions in credit this year in order to meet guidelines for reducing the budget deficit and inflation. The result, said Eliseu Alves, the president of the government's agricultural research institute, Embrapa, is that "we are going to have a great reduction in the production of food."
If food production ever is to begin growing again, farmers and economists say, Brazil finally is going to have to address the fundamental social and economic problems it has ignored for so long. "Agriculture depends a lot on income and employment, and it cannot be dynamic unless there is a better distribution of wealth," said Dercio Garcia Munhoz, a professor at the University of Brasilia.
"If they are losing income," he said, "how can farmers push the country ahead?"
"We are just beginning," said Agriculture Minister Stabily. "We have a lot we can produce for our own market. And the foreign markets do not worry us much. I have a notion that the world is going to need a lot of food."