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Social Development

Gilberto Tomazoni - CEO Global at JBS S.A

To fuel the country’s development

29/11/2023

In the interior of the country, far from large urban centers, a movement is unfolding that is crucial to Brazil’s ambitions. Much is said about the successive records for harvest volume, as well as the 25% share of agribusiness in the Brazilian economy. Our global leadership in the export of products such as soybeans, coffee, citrus, chicken and beef, to be among the best known, is also notable. The crucial point, however, concerns the unique potential that the food sector has to boost the generation of jobs, income and production in the interior, something very relevant given the country’s persistent challenge of promoting the socioeconomic inclusion of its population.

 

Currently, the food sector accounts for 1.9 million direct and formal jobs, which is equivalent to 24.3% of vacancies in the manufacturing industry according to data from Pnad Contínua. However, if we completely map this entire production chain, the number is much higher and goes beyond jobs. When thinking about the links that allow field production to reach the tables of Brazilian families and around the world, it is necessary to consider not only the harvesting of grains and fruits or animal husbandry. There is equipment, logistics, inputs and a multitude of specialized activities and services that act in a coordinated manner so that the objective of feeding the country and the world is achieved. The question here is how to measure all of this.

 

Economic science maps the size of this production network, with its direct, indirect and induced impacts through what it calls input-output modeling. Using this technique, an attempt is made to map the economy with a series of interconnected sectors. Producing food, therefore, is generally characterized by a long supply chain. For each direct job created in an industrial production unit, which we can consider as a direct effect, other job points are created in its direct input suppliers, which, in turn, activate a supply chain, called suppliers of suppliers. This is the so-called indirect effect.

 

The movement doesn’t stop there. In addition to these direct and indirect effects, there are induced ones. The salary paid by the industry to its employees returns to the economy in the form of consumption – more production and more employment associated with what was originally produced. When we look at all these effects – direct, indirect and induced – throughout the food sector’s production chains, we arrive at a very large multiplier effect.

 

Following this reasoning, a study by Fipe (Fundação Instituto de Pesquisas Econômicas) and Nereus (Center for Regional and Urban Economics at the University of São Paulo) was recently released, which corroborated the importance of this broader look at the networks that form in food production. As an example, the research indicated that the production chains linked to JBS moved, in 2021, the equivalent of 2.1% of GDP (Gross Domestic Product) and contributed to the generation of 2.73% of the country’s jobs. The company, which directly hires 145,000 people in more than 130 Brazilian municipalities, helps create 2.9 million jobs, taking into account the production chains linked to it, according to this survey. Here, I cited the case of the company I manage, but the same type of model applies to other companies that demonstrate the potential of the food sector as a socioeconomic engine in the Brazilian interior.

 

Recently, Fundação Getúlio Vargas released a study that reinforces the increasing contribution of food production to one of the most important pillars for any economy: job creation. Between 2019 and 2022, despite being a period of great turbulence – with the Covid-19 pandemic, crop failure and conflict in Ukraine -, Brazilian agribusiness achieved the highest formality rate since the beginning of the historical series, in 2016.

 

In 2022, the sector as a whole had 13.9 million jobs, compared to 13.6 million three years earlier. During this period, 344 thousand new jobs were created, an increase of 2.5%, which allowed us to surpass the total number of people employed before the pandemic. In the same period, another relevant data: the Gross Value of Agricultural Production, released by the Ministry of Agriculture, Livestock and Supply, increased 29.2%. In this process, there was a significant formalization of work, in addition to a trend towards greater stability and higher remuneration. The formality rate in agriculture rose to 23.5%, the highest percentage in the historical series.

 

These studies show the relevance of food production for the growth of the interior of Brazil. With new job opportunities, the overall quality of life improves – people’s income, education, health and housing change. Not only cities with industrial units installed, but also those in their surroundings, benefit from the development of jobs and wages. There is also an induction of productivity gains when dozens of interconnected sectors are analyzed – such as production, capital, inputs, work, land, family consumption and exports of hundreds of products.

 

Therefore, science is capable of calculating and proving that the food sector directly generates a very relevant amount of jobs and economic development, in addition to a multitude of indirect and induced benefits as well. This reinforces the importance of stimulating this industry to promote economic expansion and inclusion of the Brazilian population, especially in the interior.

 

All this in a context that combines productivity with responsibility. Brazil has a crucial role to play in the mission of feeding the growing world population in a context marked by climate change. The opportunities are broad and, as a network, each link in the food production chain needs to cooperate with each other.

 

The country has demonstrated over the years that it knows the ways to produce more with less, preserving our biodiversity, the richest among all nations. With the dissemination of best practices and support especially for those who have less access to technological advances and financial resources, Earth’s opportunities for Earth will multiply.

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