The World’s Stockyard

A recent visitor to the Amazon rainforest was surprised by the animal that was most conspicuous: instead of exotic jaguars, the region was populated by “the humpbacked, floppy-eared, glossy white Nelore cow, the ultimate conqueror of the frontier.” As the Brazilian economy was transformed into the world’s main provider of beef in the last two decades, the rainforest that houses 10 percent of the world’s animal species has been set alight to open the way for millions of grazing cows. Current estimates suggest that there are more than twice as many cows as people in the Brazilian part of the Amazon—around 63 and 28 million, respectively.

When President Luís Inácio Lula da Silva started his first term in office in 2003, Brazilian exports of frozen beef ranked third in the world by volume, representing around 11 percent of the total. By the end of his second term in 2010, Brazil ranked first, accounting for 23 percent of all frozen beef exported worldwide. In quantity, these exports increased from 317 to 781 thousand tonnes. Over the following decade, Brazilian beef supremacy deepened: in 2022 Brazil was the origin of 32 percent of all frozen beef traded internationally, exporting almost twice as much as India, the second largest exporter. The rise of Brazil as the stockyard of the world was tightly connected to the rise of China as an economic superpower: Chinese imports of frozen beef surged between 2002 and 2022 from eleven thousand to over two million tonnes.¹

A yet more dramatic story can be told about soya. The Brazilian share of global exports of this bean rose from about a quarter in 2003 to around half since 2018. A substantial portion of this commodity is used to produce animal feed for other countries’ stockyards, earning the title of an emergent “Brazil-China soy-meat complex” from researchers looking  to describe these shifting global agri-food relations. The two commodities—beef and soya beans—have spread across Brazil’s hinterland like wildfire, and much of their production does not abide by local environmental regulations (see the geographical expansion of the two activities in Figures 1 and 2, below). A 2020 investigation by Raoni Rajão and others, which compiled a comprehensive dataset with information on 815 thousand rural properties in the Amazon and Cerrado (the Brazilian savanna), concluded that “roughly 20 percent of soy exports and at least 17 percent of beef exports from both biomes to the EU may be contaminated with illegal deforestation.” (The shares may be even higher for exports to other destinations with more lax regulations.)

Booming exports of primary commodities do not usually mark the path to the luminous summits of development. The prices of such products are highly volatile, subjecting the economies that depend on their exports to bumpy trajectories, to the detriment of long-run growth. And crucially, primary production seldom offers the backward and forward linkages that encourage productivity increases throughout an economy, fostering cumulative technical change. More often than not, primary production is an enclave, with limited spillovers into other industries and the labor market—and with the potential to bring the whole economy down if falling international prices lead to currency devaluation and economic crisis. The collapse of the Brazilian economy between 2014 and 2016 had multiple determinants, but it was undeniably related to the downturn in commodities prices.

In the age of climate emergency, the developmental drawbacks of being a primary goods exporter may intensify. As a team of researchers from the London School of Economics and the University of Oxford argued, a “global green race is underway; a race in which early movers will be rewarded and laggards will risk losing global competitiveness.” Besides barriers to climbing the value chain on the world market, the economic cost of becoming the world’s stockyard is compounded by its environmental impacts, in terms of emissions and biodiversity loss. Brazil is the seventh largest emitter of greenhouse gases. But the composition of its emissions differs starkly from the world’s norm: whereas agriculture, forestry, and land-use change combined account for about 18 percent of global emissions, they represented more than three-quarters of Brazil’s between 2000 and 2020. When it comes to the country’s emissions, fossil fuels take the backseat, overshadowed by beef and soya. Where global commodity markets once supported a redistributive domestic agenda, the now entrenched reliance of the Brazilian economy on deforestation-based primary production hinders it from offering a decent living standard to the majority of its population and contributes to the degradation of its ecosystems and the warming of the planet.

Green hopes

Recently, this dismal picture has given way to more positive views about the prospects for Brazil in the global green transition. After four years of a far-right, climate-denialist government that actively promoted deforestation, Lula’s electoral rise to a third term produced some optimism. Lula has been trying to position himself on the world stage as a strong supporter of the green transition. Marina Silva—the environmental leader who was in his cabinet between 2003 and 2008 and resigned amidst disagreements over environmental policy—is back as the environment and climate change minister; she managed to reduce deforestation in the Amazon by almost 40 percent in 2023. And in 2025, further burnishing its climate action credentials, Brazil will host COP30 in the Amazonian city of Belém. Writing in the Financial Times last September, finance minister Fernando Haddad framed the administration’s economic agenda in the language of green transformation: “a comprehensive transformation of our economy and society through greener infrastructure, sustainable agriculture, reforestation, circular economy, increased use of technology in productive process, and climate adaptation.”

The hopeful outlook is not restricted to government circles. In the most recent Country Climate and Development Report focused on Brazil, the World Bank argued that the country’s “relatively clean and renewable energy matrix,” based predominantly on hydropower, gives it “an important advantage for building a low-emission industrial sector.” From this vantage, the unique composition of Brazilian emissions does not reveal the country’s destructive and emissions-intensive agribusiness sector, but rather the low-carbon intensity of its energy sector. The latter could be mobilized to boost industrial exports, giving it an advantage over competitors who power manufacturing production by burning coal or natural gas, and making the full decarbonization of the economy more attainable in Brazil than elsewhere. As Ricardo Abramovay asserted, the country can halve its emissions “without structural transformations in its economy,” given that eliminating deforestation can be attained “without any modification in the transport system, the energy matrix, consumption patterns, heating or cooling of homes.” Or, as others have put it, meeting the country’s emissions goal for 2030 “could be achieved quite cheaply.”

The government’s current strategy to reap this opportunity revolves around the Ecological Transformation Plan launched at COP28. According to the finance minister, it represents “a new development model, inclusive and sustainable.” Its goals are “increasing productivity by creating and disseminating technological innovations and building sustainable infrastructure, taking advantage of the country’s unique geographic and environmental characteristics—the wide availability of renewable energy sources and abundant biodiversity.” In May 2024, the administration issued a new statement to announce that “the Ecological Transformation Plan is already in motion.” It lists a series of ongoing actions laying the foundation for the new development model: green bonds, subsidized credit and debentures, and tariffs to foster investment in decarbonization, reforestation and reindustrialization, the ongoing formulation of a domestic green taxonomy, and advances in the negotiations for Congress to approve a carbon market—referred to by Haddad in 2023 as the “first landmark measure” for the green transformation.

Another action in this realm was the New Industry Brazil, a suite of industrial policies that aim to build on the country’s current economic base to jumpstart development. Three of the six chosen missions relate to environmental sustainability. One of them has impacts on agribusiness, intending to promote a “digital and sustainable agro-industrial chain for food, nutrition and energy security.” The goals include strengthening the manufacturing link of the agribusiness chain, mechanising family farming with domestically produced equipment, and enhancing the environmental sustainability of agro-industrial production. According to Mariana Mazzucato, who helped the government design the new policy, “depending on how they are deployed, these new missions could help foster public-private, cross-sectoral, and cross-ministerial coordination and collaboration aligned with the Ecological Transformation Plan and the overarching agenda for sustainable and inclusive growth.” Mazzucato also claimed that by “putting the ecological transition at the heart of economic policy, the Government of Brazil is setting a different course—one that could turn social and environmental challenges into opportunities.”

Nevertheless, the place of agribusiness in the strategy for the country’s green transition, beyond serving as one of the bases for an effort of reindustrialization, has not been addressed in detail. A recent study on the topic, which examines the minimal sectoral changes needed for the Brazilian economy to meet its decarbonization pledges, simply disregards the emissions related to land-use change (especially deforestation), with the argument that “they are known to result from illegal activities.” This problematic assumption has compromising consequences: the proposed sectoral changes would require a shift in production away from carbon-intensive manufacturing activities and towards agriculture, livestock, and meat production, as well as different service industries. Perversely, Brazilian decarbonization would result from expanding agribusiness.

The World Bank, meanwhile, provides a more accurate picture of the relationship between agribusiness and the climate transition. It argues that the recent adoption of the government’s low-emission agricultural ABC+ Plan, which consists of “low-interest rural credit to fund the implementation of agricultural practices or technologies that are likely to contribute to climate change mitigation and/or adaptation,” could contribute to reducing deforestation without compromising agricultural production, as long as it was reinforced, rather than sabotaged, by other rural credit policies. But, in their estimates, this effort would not eliminate emissions from agriculture and land-use change. Rather, it could halve them by 2030. Further, they highlight significant political obstacles: “agricultural interest groups (including some cattle ranchers and those affiliated with the livestock industry) have notable influence at both subnational and federal levels.” Their political clout explains why government subsidies and rural credit policies provide “additional incentives to deforest.”

In 2021, for instance, the budget for the ABC+ Plan represented only two percent of the Plano Safra, the main rural policy that, among other things, “supports cattle ranching in the Legal Amazon’s less developed states.” In 2023, the first Plano Safra announced by the current government dedicated a similar share of the total amount to low-carbon agriculture: RenovAgro, the new name of the ABC+ Plan, received 1.9 percent of the total.² The government argues, however, that other aspects of the policy also stimulate sustainability in agriculture, varying the interest rate charged to farmers, for instance, based on their compliance with sustainable practices.

The power of agribusiness

Planning the green transition in Brazil without facing the challenges posed by the dominance of agribusiness head-on downplays the tensions between the proposed strategy and the pattern of accumulation that was consolidated over the last two decades. In this period, agribusiness became one of the most powerful segments of Brazilian political and economic life. When Brazilian agribusiness exports became a crucial piece of global capitalism’s puzzle, they assumed a commanding position in the domestic Brazilian economy, especially by guaranteeing access to foreign currency. 

The share of soya beans alone in total Brazilian exports rose from less than 5 to more than 12 percent in the last two decades. All agricultural goods combined (soya beans, different kinds of meat, sugarcane, and corn, among others) currently account for more than a third of total exports. Together with minerals, especially iron ores and petroleum, they represent more than 70 percent of all exports. Brazil has consolidated, since 2000, its subordinated integration in the international division of labour as an exporter of primary commodities. Being more industrialized than its neighbors, Brazil used to be a regional outlier in terms of the share of manufactured goods in total exports, which stood at around 55 percent during the 1990s and early 2000s against at most one-third in countries like Argentina, Colombia, and Uruguay. In the last two decades, however, the composition of Brazilian exports has become increasingly similar to those of other countries in the region, with the share of manufactured exports declining to about a quarter of the total since 2020.³

The role played by agribusiness is also identifiable in statistics regarding the composition of the domestic economy. During the commodities boom, agribusiness expanded less than the rest of the economy. The share of the whole agribusiness chain (comprising the production of inputs, agriculture, livestock, agroindustry, and agroservices) in GDP declined from about 30 to 21 percent between 2003 and 2010.⁴ As the policy space created by booming exports was used to adopt redistributive policies and expand public investment, mass consumption increased and urban services outpaced agribusiness. But the period was characterized by the consolidation of the main corporations and their rising political power. JBS, for instance, became one of the largest meat-processing firms in the world, buying several of its Brazilian competitors as well as major firms in the United States, with the crucial support of the Brazilian Development Bank (BNDES).

During his two previous terms in office, Lula took advantage of the commodities bonanza to implement poverty-reducing policies, without challenging agribusiness’s rise. In agricultural policies, the government preserved an inherited duality, with one ministry dominated by the agribusiness elite and another focused on the demands of the agrarian social movements. Regarding the environment, ambiguity also prevailed. On the one hand, the government oversaw significant improvements in environmental legislation and enforcement that led to a reduction of deforestation by a factor of four. On the other, it often prioritized investments that could boost short-term growth, overriding problematic environmental implications. The construction of the Belo Monte hydroelectric dam in the Amazon basin is a case in point. It remains one of the leading examples of a megaproject that resulted in the mass displacement of communities and caused significant biodiversity loss, at the same time as it contributes to the country’s renewable energy matrix.

The agrarian ruling classes used the opportunities opened by the commodities boom to consolidate their power. With no particular loyalty to the government that oversaw their rise, some factions of the agribusiness lobby would soon push for a different, and dangerous, political course. As Rodrigo Nunes argued, when agribusiness moved to oppose Lula’s successor, President Dilma Rousseff, in 2015, “it seemed to have come of age politically: no longer content to simply defend its immediate economic interests, it instead sought to impose its agenda on the country as a whole.” It became a leading political player in the parliamentary coup that ousted Rousseff in 2016, fomenting a violent turn to the right in Brazilian politics, and laying the ground for the electoral victory of the far-right politician Jair Bolsonaro in 2018.

The results were immediate: the Brazilian state was effectively transformed into the “executive committee” of the agrarian bourgeoisie, dismantling environmental regulations, indigenous rights, and the ministerial and institutional apparatus that had been painfully built since democratization and the passage of the 1988 Brazilian Constitution. A reactionary political bloc was established, welding together rural capitalists, the militant faction of Christianity, and the security apparatus (comprised of different branches of both the police and the armed forces): the infamous “beef, bible, and bullets” tripod that carried Bolsonaro to the presidential palace.

With this political backing, agribusiness was set to thrive. During Bolsonaro’s government, as the rest of the economy stagnated, the agribusiness chain boomed. It grew on average 7.8 percent per year between 2019 and 2022, while GDP crawled at an annual average rate of 1.4 percent. As a consequence, its share of GDP oscillated around 25 percent since 2020, having recovered some of the ground lost in the 2000s.⁵ There were two associated booms in rebounding deforestation rates and in inequality: the rising share of income appropriated by the richest 0.1 and 0.01 percent between 2017 and 2022 was driven mainly by the states in which beef and soya production dominated.

The relationship between the far-right and agribusiness was not a temporary affair. André Singer identifies the formation of “a coalition with a territorial, economic, and social base”—stretching from its representatives in Brasilia to the rural elites and growing sections of the poorer groups in the hinterland—and notes that, in the 2022 presidential election, Bolsonaro received more votes than Lula “in the 265 municipalities of the nine Amazonian states.” Nunes writes about the broader historical significance: “the reversal of the political domination of the countryside by the bigger cities (and the industrial and service sectors) that began with Getúlio Vargas in the 1930s.” The sluggish growth model based on agribusiness exports, gradually assembled over the last two decades, finally showed its teeth: it puts at risk not only Brazilian biodiversity but also its democracy.

Burning challenges

The main challenge for Lula’s new development model is overcoming the dominance of agribusiness in the country’s political economy. Rural capitalists have given ample evidence that they will not lay down their arms without a fight and that they will resist shifting the economy away from the “soya-meat complex” every step of the way. Having elected many representatives to Congress in the last election, the agrarian bloc makes up fully 60 percent of elected members of Congress, across both houses—enough power to impose defeat on the current government.⁶

In the first months of the new government, as Lula structured his cabinet, the agribusiness lobby in Congress managed to hollow out both the indigenous peoples and the environment ministries, transferring some of their mandates to other government departments. They successfully protected their multiple tax benefits, imposing a series of changes to the government’s comprehensive indirect taxation reform agenda, which aimed precisely to make its incidence more homogeneous across sectors. They amended the plan for the establishment of a carbon market—which the government claimed would be “universal in scope”—to exclude the agriculture and livestock sectors from its provisions. And when the Brazilian Supreme Court decided against the agribusiness lobby in a case about the demarcation of indigenous territories—regarding a policy aimed at historical reparation but with significant impacts on curbing deforestation—Congress rushed to approve legislation in the opposite direction, effectively quashing the court’s decision.

The new development model promised by the government could potentially change the balance of power, reducing the dependence of the economy on the fortunes of agribusiness and thus weakening this faction of the ruling classes. The green transition could precisely be used as an opportunity to mobilize the state apparatus to transform the Brazilian economy, reducing its reliance on primary exports and creating decent jobs. So far, however, notwithstanding the rhetoric surrounding the Ecological Transformation Plan, the government seems to be outsourcing most of the climate transition to the private sector due to its limited fiscal space—squeezed between a self-imposed commitment to austerity and the erosion of the tax base promoted by agribusiness.⁷So much so that the finance minister made sure to contrast its green plans with the policies being implemented in the United States, claiming that a “mosaic of regulatory and tax policies” will guide the Brazilian transition, relative to the “vast amount of budget resources” mobilized by Joe Biden’s government. The new industrial policy, for instance, will have to make do mostly with subsidized credit from the BNDES, having been effectively pushed out of the government budget.⁸

Will the strategy work? The progress of the US Inflation Reduction Act notwithstanding, forceful critics have argued again and again that the challenges of the climate transition cannot be overcome by mobilizing market forces alone, that is, by counting on the incentives created by subsidized prices internalizing environmental costs. Decisive government action that disciplines capital into a long-term strategy of sustainable structural transformation is required—an approach that Daniela Gabor calls the “big green state.” The argument is even more forceful for an economy like the Brazilian one, which has endured decades of stagnation and in which, according to a recent study, the potential for green competitiveness has “seen a declining trend.” Most importantly, government intervention is indispensable given the overwhelming influence of a faction of the ruling classes that works to sabotage the green transition and is responsible for most of the country’s carbon emissions.

Admittedly, establishing a “big green state” in a peripheral country in which the predatory faction of agribusiness is ascendant may seem utopian. But there are some tendencies pushing in this direction. First, across the world, the widespread adoption of industrial policies weakened the neoliberal consensus against them, reducing ideological obstacles. Second, the likely negative consequences of global warming and global North climate policies on the prospects of agribusiness may push some of its leaders to back a plan that reduces the risk of Brazil becoming a global pariah and losing access to certain markets, potentially dividing the agrarian bloc. Shying away from this challenge seems to be the truly utopian position, which counts on the unlikely possibility of reducing deforestation, meeting emissions targets, and holding back the far-right without changing the development model. Another utopian position would be the hope that the development model can be altered stealthily by changing a few relative prices.

The loyal support the current government has among the poorest half of the population provides a starting point for the task of building a strong political coalition to discipline capital into a long-term strategy that can establish a new development model. This would require what Alice Amsden called “reciprocal control mechanisms”: the deployment of targeted government support to technologically sophisticated sectors, conditional on regularly meeting performance standards, so that the primary commodities share of exports can decline as new economic actors push the economy in a different direction and simultaneously create a constituency for the new development model. While some of those elements are present in the current government’s plans, they have been kept on the margins where they are weakened in their capacity to unleash transformative shifts in the economy.

Time is running out. As it remains effectively unchallenged, the agribusiness-led economy keeps strengthening the far-right bloc, further empowering the agrarian capitalists and feeding the disillusionment of the popular classes. That is one of the reasons why the hope that flourished with Lula’s election in 2022 has already turned into a pervasive sense of political deadlock. As extreme weather events uproot entire cities and stoke turmoil—the tragic flooding of a significant part of Rio Grande do Sul being the most recent example—the stakes for challenging the dominance of agribusiness couldn’t be higher. But it is not only urgent to slow down global warming and give humanity a chance to avoid the worst consequences of climate change; a new development model is also a necessary condition to weaken the far-right attacks on democratic institutions and open the way for an economic transformation that could restore the hopes of improved standards of living for the majority of Brazilians, who have endured a decade of impoverishment.