WASHINGTON – When he traveled to Brazil seven years ago, Illinois farmer Phil Corzine had a reaction similar to that of other American farmers when they lay eyes on the vast tracts of cheap South American land available for cultivation.
“I saw the potential. I was really impressed. And scared,” recalled Corzine, who farms near Assumption, Ill., 80 miles northeast of St. Louis.
Rather than worry about the budding competition, he joined it. He formed a company with mainly Illinois investors and a Brazilian partner and bought 2,500 acres last year in the state of Tocantins at the eye-popping price of $100 an acre.
In central Illinois, land that produces roughly the same soybean yield as Brazilian farms sold recently for $4,500-$5,000 an acre.
Later, Corzine, 46, bought another 1,000 acres of savanna at $204 an acre and began clearing it for soybeans. And he’s on the lookout for more.
He has no plan to move to Brazil. This is business, and in that first trip, Corzine saw what the future holds when American farmers go head-to-head with the world’s new agriculture powerhouse.
“They’ve got land prices and labor costs that we are not going to be able to offset. You’d be sitting around in the evening with a beverage in your hand thinking about that. Finally, we decided that maybe we ought to take advantage of it rather than crying in our beer,” he said.
One advantage the Brazilians don’t have is a range of farm subsidies like those in the American programs that keep farmers afloat and bail them out when times are bad.
But sooner or later, Midwestern farmers will see a cut in those subsidy checks and perhaps elimination of entire programs, partly due to Brazil’s success challenging their impact on trade.
Corzine can view the controversy over subsidies from both sides of the equator.
“It’s a significant advantage to know that if I grow soybeans here in the United States, I’m going to get five bucks a bushel because of (subsidies). If I sell for three dollars, four dollars or whatever, the government is going to pay me the difference. So I probably won’t quit growing soybeans, even when I should,” he said.
“But now that we’re in this era of world production, you have to have programs that don’t distort trade. A lot of farmers here don’t want to hear it, but I think part of our farm programs are going to have to be revisited.”
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(c) 2005, St. Louis Post-Dispatch.
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PHOTOS (from KRT Photo Service, 202-383-6099): FARM-BRAZIL
AP-NY-05-20-05 0615EDT
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