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Building Agro-Industrial Capabilities in the Sugarcane Supply Chain in Brazil

Author

Listed:
  • Gabriel da Silva Medina

    (Faculty of Agronomy and Veterinary Medicine, University of Brasília, Brasília 70910-900, Brazil)

  • Rommel Bernardes da Costa

    (Faculty of Agronomy, Federal University of Goias, Goiânia 74690-900, Brazil)

Abstract

Background: This study aims to explore how domestic entrepreneurs can benefit from the thriving global agribusiness by establishing themselves in agro-industrial segments that can best remunerate capital and labour. The ways in which domestic entrepreneurs in Brazil enter different segments of the agribusiness industry were assessed with specific attention to implications for the development of local agro-industrial capabilities. Methods: We assessed the current market share of domestic companies in relation to foreign multinationals in various segments of the sugar and ethanol supply chain in Brazil. Results: Foreign multinationals are market leaders in the fertilizers, machinery and trading segments (domestic companies market share is 20.3%, 33.3% and 42.9% in those segments respectively). However, Brazilian companies have achieved higher market share in segments such as plant breeding, sugarcane processing and farming (domestic market share is 93.2%, 67.4% and 75.5% respectively). Plant breeding, farming and trading benefit from governmental support in research, subsidized credits and market policies respectively. Conclusions: By investing in agro-industrial sectors developing countries can benefit from agribusiness expansion for their economic growth. Investments in science and technology and domestic regulatory actions can help to build country capabilities, although the impacts are sometimes limited to the agro-industrial sectors where domestic companies are more competitive. These lessons can help other developing countries to assess their opportunities and challenges for agro-industrial development.

Suggested Citation

  • Gabriel da Silva Medina & Rommel Bernardes da Costa, 2023. "Building Agro-Industrial Capabilities in the Sugarcane Supply Chain in Brazil," Logistics, MDPI, vol. 7(4), pages 1-14, October.
    • Handle: RePEc:gam:jlogis:v:7:y:2023:i:4:p:71-:d:1255026
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    References listed on IDEAS

    as
    1. José Elenilson Cruz & Gabriel da Silva Medina & João Ricardo de Oliveira Júnior, 2022. "Brazil’s Agribusiness Economic Miracle: Exploring Food Supply Chain Transformations for Promoting Win–Win Investments," Logistics, MDPI, vol. 6(1), pages 1-19, March.
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