Brazilian soy farmers spent R$ 8.3 billion on fungicides in 2016/17, says Cepea

The cost of producing soybeans with fungicides in Brazil reached R$ 8.3 billion, 96% of which was only for the control of soybean rust; along with R$ 6.2 billion in insecticides and R$ 4.8 billion in herbicides, totaling R$19.3 billion in the 2016/17 season. This amount corresponded to 16.5% of the total cost of soy production in the country during that harvest - which reached R$ 117 billion.
 

The figures were released on 22 May, by the Center for Advanced Studies on Applied Economics (Cepea / Esalq-USP), based on a study performed by the center, in partnership with the National Association of Plant Protection (Andef).
 

The study monitored the evolution of the occurrence of the main pests and diseases that affected soybean, maize and cotton crops in the 2014/15, 2015/16 and 2016/17 season, and the respective economic impacts for producers and the country, the report said.  In addition, Cepea simulated a situation in which producers did not use fungicides to control rust.
 

Although this brought savings of R$ 5.75 billion in agrochemicals, the fall in the soybean crop would not compensate, as it would reach some 30%.
 

"Assuming that producers could compensate for this loss in productivity by expanding the area under cultivation, they would spend R$ 33 billion on additional resources to cover an increase of almost 1/3 in the national production area," says Cepea, referring to costs that involve only private land, labor and capital, and not opening new areas, as well as infrastructure and logistics.
 

For the country, in macroeconomic terms, this would be seen in the 30% drop in exported volume, equivalent to losses of US$ 4.5 billion in external revenues for products of the soybean complex. Researchers from Cepea also estimate that the 22.9% increase in soybean prices, due to the loss in production, would have an impact of 0.57 percentage points on the general IPCA of 2017. In other words, the IPCA would increase from 2.95% to 3.52%. This same reasoning applied to the IPCA of food, which would imply variations of a 1.03 percentage point in the index, that is, it would jump from -1.87% to negative -0.84% in the year 2017.
 

Download entire report here.