Transcontinental Railroads for Soy

Brazil is the world’s second largest producer of soybeans. The country made great advances over the last quarter century, thanks in great part to the work of EMBRAPA and the development of Brazilian agriculture. I wrote a note about the expansion of the Brazilian agricultural frontier at this link. They have learned how to make the formerly non-productive soils fertile and developed new varieties of crops, such as soybeans adapted to the tropics that have revolutionized agriculture in the country and may soon help less developed countries in places like Africa.

The intractable problem remaining is infrastructure. Infrastructure is weak all along the chain from the farm field to the ports. Infrastructure that we take for granted just does not exist in many parts of Brazil. They have no network of paved trunk roads, for example. These webs of roads bring agricultural products to markets and greatly reduce prices and waste. We don’t even think about this most of the time, but I understand their worth sometimes when I drive down one of my dirt roads after even a light rain. It is not hard to imagine how bad it would be if traffic was more and heavier just me, not hard to imagine, but it would be hard to work with it.

Freight rail is an often out-of-sight but crucial part of infrastructure in any large country. The state of Brazilian railroads is even worse than the roads, outside small areas of the Southeast.  A truck can, with difficulty, drive across an undeveloped path; a train obviously cannot go where there are no tracks and there are no tracks laid across most of the Brazilian agricultural frontier.  

As part of my quest of getting to know Brazil, I was doing a little research on infrastructure in the interior of the country and found an interesting article about the “soy railroad” or what Brazilians call Ferrovia de Integração Centro-Oeste (Fico) – the trunk railroad for the Central-West. Look at the link to see where the railroad will go. It will be part of a massive transcontinental railroad that will cover 4,400 kilometers. Work is supposed to begin April of 2011, initially with R$ 4.1 billion from the Programa de Aceleração do Crescimento (PAC) – program for the acceleration of growth. The rail project has been slowed by environmental concerns, as well as management challenges of such an ambitious project.  

The project is supposed to be completed in two phases. The first phase will go from Campinorte in the state of Goias, connect with the north-south railroad, and end up in Lucas do Rio Verde in the state of Mato Grosso.  I didn’t know where these places were either, but you can look them up with Yahoo Maps. The railroad would be a straighter line than the road and I think be better environmentally, since RR traffic is more easily controlled.  As I wrote above, the trains obviously cannot leave the tracks.

When the project is up and running, it will save R$ 1 billion in the annual cost of freight for producers in the region, according  to Glauber Silveira da Silva president of the Mato Grosso Association of Corn and Soy Producers.  He also talked about the need to complete BR-163, the highway that is supposed to connect Cuiabá in Mato Grosso with Santarém in the state of Pará. It was started in the 1960s, but  much of it is a dirt road with ruts big enough to swallow cars. The completion of this infrastructure would change the direction of the product flow from the central-west. Most of the freight currently goes south and east, toward to overloaded ports of Santos in São Paulo state or Paranaguá in Paraná. A good road/rail connection could take the products north to Itaqui, in Maranhão, or Vila do Conde, in Pará, closer to export markets.

These heroic infrastructure projects are very exciting for me. I have read a lot about building our own transcontinental railroads and I am generally fascinated by trains and roads. (One of big advantages that I noticed when I was there was the Iraq’s great rail potential.) The challenge for the Brazilians is not only to build these things, but also to do so in a way that protects the environment. I believe that we can indeed have sustainable development and I look forward to seeing how/if that works in Brazil