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Last Updated: Saturday, 13 December, 2003, 12:36 GMT
Brazil's small farmers milked dry
David Loyn
By David Loyn
BBC world affairs correspondent

The World Trade Organisation is meeting again in Geneva on Monday to take stock after the failure of talks at the Cancun summit in October. David Loyn reports on why Brazil has joined other developing countries in blocking US and EU demands for progress, in a bid for fairer trade for their farmers.

Many Brazilian small dairy farmers have had to close down
Adriano Campolino is now a major player in the world of non-governmental organisations, in that alternative universe of policy wonks whose research papers are increasingly influential in international decision-making.

But he has never forgotten his roots as a dairy farmer.

He was a small farmer, about as small as they come, with less than a dozen cows. But they were good cows. He improved their productivity to twice the Brazilian average.

After training as an agricultural economist, he designed and built his own processing plant, packaging his tiny output for local shops.

The government did not like it and tried to shut him down on health grounds.

He challenged them to a blind test of a carton of his milk against the product from the Italian food giant Parmalat, which now has a big share of Brazil's dairy industry.

His milk came out on top for quality.

But the government closed him down anyway, since he did not have the regulation 4m clearance between the top of his plant and the roof of his shed.

A million lost jobs

Before heading to Geneva, where next week the World Trade Organisation will try to rebuild momentum out of the wreckage of the failed Cancun summit, Adriano took me to see the problems facing Brazil's farmers, which he says symbolise the downside of globalisation.

We went to the rolling hills of south west Brazil, close to the border of Argentina.

Blink and you might think you were in Bavaria.

It is a surprising place, a long way from the Brazil of the Amazon, or Copacabana beach. Quiet, settled, family values run through everything.

The Europe which their forbears left behind has pursued them with a vengeance
Blond-haired farmers' wives set out their stalls to sell basketwork table settings for Christmas in a countryside dotted with small churches and towns with wide streets, full now of paper Santa Clauses and wooden reindeer.

A century or so ago when there was mass migration to the new world from Europe, some German farmers headed for the prairies of Ohio and Minnesota.

Others came here to tame the rich fertile soil of Brazil.

The descendants of the Germans who went to North America are in receipt of huge subsidies to farm, which are increasing despite Washington's promise to cut them.

In Brazil, in contrast, a million farmers have lost their jobs in the last 10 years.

It is becoming harder to make a living.

Map of Brazil
A couple of years ago these quiet country people stormed the Parmalat factory which they blame for their problems, vandalising the plant and spraying graffiti on the walls.

The Europe which their forbears left behind has pursued them with a vengeance.

The ruthless, cost-cutting ways of companies like Parmalat, Nestle and Elege now dictate their way of life.

Since the multinationals came almost a decade ago prices to farmers have halved, but milk prices in the shops have gone down by only a third.

So the farmers have lost out.

Productivity squeezed

Adriano introduced me to Sadji Sehn, of half-German and half-Italian origin.

We sat on the terrace of his very small house, built of corrugated sheeting, sharing a sort of herbal tea, which is drunk locally in ornately decorated wooden mugs through metal straws with piles of dried herbs packed on top.

Herds have shrunk as multinationals have driven down prices
Once he kept pigs as well as cows.

But today almost all Brazilian pork is produced in huge intensive sheds cutting out the small farmers altogether.

Now his ability to make money from milk is being cut too.

He has just nine cows left, a third of the number which he had when Parmalat first came to him and offered to buy his milk.

The price looked good at the time and he went in with them.

But soon the price fell and their demands for him to mechanise increased.

He left Parmalat and set up a co-operative with 70 or so other local farmers, but the sums are beginning not to add up, as the big companies and the supermarkets continue to expect lower prices.

What alternative?

Sadji Sehn is now trying to grow tobacco, but he is not as confident of that as he is of dairy.

"I suppose I will have to try to find a job in the city", he says rather unconvincingly.

It is hard to see his huge hands and leather skin fitting easily into an office.

The World Trade Organisation meets in Geneva
The truth is that the million farmers who have lost their livelihoods have few, if any, alternatives.

The intervention of the multinationals has increased milk production and lowered prices in the shops.

So does it matter if Brazil's small farmers go out of business at the same time?

The answer is that the social cost to the countryside is hard to face in a country which is struggling already with the tensions of transition to a modern economy.

A key figure in the government which took the decision to let in European dairy expertise and European accountancy practices admitted to me that it had been a mistake to do it without regulation.

As Brazilian negotiators head for Geneva it is not a mistake which they want to repeat.

From Our Own Correspondent was broadcast on Saturday, 13 December, 2003, at 1130 GMT on BBC Radio 4. Please check the programme schedules for World Service transmission times.

Country profile: Brazil
05 Jul 03  |  Country profiles
Quick Guide: World Trade Organisation
19 Nov 03  |  Country profiles


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