The changing environment and the modern farming

This article aims to discuss the major changes happening in farming, mostly in the largest farming export countries as the USA, Brazil, Argentina among others with relatively different environments like South Africa, India and China. The idea is to raise the facts that are changing, the impacts brought by these facts and leave an open discussion towards which acts should companies that are performing with farmers should do. These ideas are based on discussions with farmers and researchers in 4 of these countries. Among these countries, probably Brazil is the one that most fits in these trends.

•                 Increasing price volatility in the world of agriculture;

•                 New risks due to climatic change and Governmental regulations;

•                 Access to technology being more crucial and technological availability is increasing;

•                 Increasing farming concentration (more farms per farmer being managed);

•                 Much more information available, most of them for free;

•                 Changes in farming production business models;

•                 Changes on farmer’s behavior, more professional and informed;

•                 Farmer diversification to other regions and activities, including livestock;

•                 Farmers are getting more capitalized, but still need credit due to price/cost volatility;

•                 Increase of capital needs and land usage restrictions;

•                 Urban opportunities for labor are growing;

•                 Scarcity of resources needed by farmers to produce.

 

These changes in the farmers environment bring several impacts within the food chains:

•                 Shift of bargain power towards farmers;

•                 Farmers are creating increasingly bigger buying groups;

•                 The need to build scale as a basic principle;

•                 Increasing costs of labor;

•                 Well informed farmers, increasing in a yearly basis, the technical and market expertise

•                 Increasing costs of adjustments to a more restrictive environmental institutions;

•                 The issue of good land management;

•                 Multiple buying attributes demand different approaches to serve farmers with different profiles;

•                 Price and technical issues are becoming more important considering farmer’s buying behavior;

•                 Information is more available about suppliers of products and services and also prices of the offers and solutions;

•                 Opportunities to develop new credit alternatives and support farmers‘ working capital needs;

•                 Increase of risk exposure and demand of capital due to the more sophisticated offers existing in the market.