July 22, 2021

10:07

Marcela Leiros – from Cenarium Magazine

MANAUS – The economy in the Amazon is governed by farming, extractivism and agriculture. According to specialists, agriculture and cattle-raising are the great “engine” of deforestation in the Amazon, especially cattle-raising. In order to open large pastures, it is necessary to cut down large areas of the tropical forest, but this has caused losses.

The economic impacts of deforestation are difficult to measure, but they are already being felt. With the rainfall cycle becoming more unpredictable, crops and pastures are also affected by the environmental unbalance.

Not only in agriculture and cattle-raising, the lack of control and inefficiency of the federal government in face of the environmental crisis intensified in Brazil since last year, when the annual deforestation of the Brazilian Amazon reached 11 thousand square kilometres, a record rate since 2008, has generated insecurity and reaction from international markets. Investors are already mobilizing and announcing to impose sanctions on the Union, if the scenario of environmental degradation is not reversed.

Harvest loss

n Mato Grosso – a state that broke the deforestation record in April, with 217 square kilometres of forest lost, according to the Amazon Institute of Man and the Environment (Imazon) – the fall in the second corn harvest, that is, the significant reduction in what was expected for the crop, should exceed, this year, 15 bags per hectare, on average, in comparison with the 2019-2020 season. This is what the Mato Grosso Institute of Agricultural Economics (Imea) pointed out, which attributes the difference to the late planting and lack of rain during the development of the plantations.

With the fall of the crop, total production should be 32 million tons, a drop of 9.72% compared to last season, when producers harvested more than 35 million tons of grain. This fall would be an effect of drought that struck the state this year. In some regions, were 50 days without the occurrence of rain.

Rivers floods

This year’s great river flood is causing losses in the Amazon. In Amazonas – where the Rio Negro reached the highest level of the last 118 years, 30.02 meters – agricultural losses were estimated around R$ 201 million, according to the Institute of Agricultural and Sustainable Forestry Development of the State of Amazonas (Idam). The figure, released in May by Idam, refers to the production of more than 17,000 families in 26 municipalities. Among the main crops affected were banana, vegetables, papaya and cassava.

In 2020, the Amazon also had losses of R $ 329,5 million caused by natural disasters, according to the study “Damage and losses caused by other disasters during the pandemic in 2020”, the National Confederation of Municipalities (CNM). The research showed the financial impact of phenomena such as flooding, flooding, landslides, droughts and forest fires recorded during the first year of the pandemic Covid-19.

Water crisis

In May this year, the federal government created a crisis room and began discussing an action plan to preserve the water in the reservoirs of the main hydroelectric plants, located in the Southeast and Centre-West regions, and avoid the risk of energy shortages. The situation is a result of the lack of rainfall in the two regions in recent months. According to the government, the volume of rainfall recorded since October 2020 is the lowest in 91 years.

This crisis has already put pressure on inflation this year and limits the growth of the Gross Domestic Product (GDP), according to the Central Bank. The official estimate for economic growth this year rose from 3.6% to 4.6%. However, the water crisis is one of the factors that generate uncertainty and limit the increase in activity in 2021.

The impact is also felt directly in the pockets of Brazilians. The National Electric Energy Agency (Aneel) approved, on June 29, the readjustment of the red tariff flag level 2 – an additional charge applied to electricity bills when the cost of energy production increases. The extra charge went from R$ 6.24 to R$ 9.49 for every 100 kWh consumed – an increase of 52%. Aneel estimates an increase of at least 5% in electricity bills in 2022.

“Consumers no longer want to buy products that are contaminated with deforestation, slave labour, violation of indigenous rights,” Paulo Moutinho, PhD in Ecology and senior scientist at Ipam.

Translated by Bruno Sena