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Last Updated: Tuesday, 2 October 2007, 11:00 GMT 12:00 UK
Brazilian land attracts foreign farmers
By Gary Duffy
BBC News, Bahia

Tyler Bruch is a young American farmer determined to succeed, and he works long days week after week, year after year to make his point.

Tyler Bruch farms the land
Tyler Bruch is one of a growing number of foreign investors

But his challenge is not in the fields of his native Iowa but in the far west of the state of Bahia in Brazil, his adopted country.

Just 27 years old, Tyler is managing more than 34,000 acres (13,759 hectares), both for his family and for around 30 American investors.

The main crops are cotton, soy beans, corn, popcorn, as well as dry beans and some sunflowers.

For Tyler there were clear advantages in choosing Brazil to make an investment.

"When I came down here a few years ago, land in the US was maybe $3,000 (1,500) an acre versus $500 an acre here," he says.

"There was also a lot more ground here readily available, so in terms of starting up an operation there was a lot more opportunity."

Sunshine and space

Tyler is one of a growing number of overseas investors in this area, a trend repeated in other parts of the country, and foreign investment in Brazil is growing rapidly.

Oziel Oliveira - mayor of Luis Eduardo Magalhaes
In the last five years the value of the land in this area of production has gone up 300%
Oziel Oliveira
Mayor of Luis Eduardo Magalhaes

The abundance of land, the seemingly ever-present sunshine and the lower prices have all proved attractive.

In some parts of the country the investors are banks or large companies.

Tyler knows of at least nine or 10 other Americans in the area, as well as Europeans, Japanese and Chinese investors.

Moving to Brazil just after college was a big step but he has no regrets.

And in this age of environmentally friendly fuels, his company will shortly break ground preparing for the construction of a big bio diesel project.

Foreign funds

It seems the word about Brazil's investment opportunities is starting to spread and, in this part of Bahia, local officials can hardly contain their satisfaction.

Land on one of Tyler Bruch's farms
The wide open spaces of Brazil are a great attraction

Just seven years ago, the nearby town of Luis Eduardo Magalhaes had a population of 18,000. Now it has grown to 44,000, and locals say the number of new cars on the streets is just one sign of prosperity.

Mayor Oziel Oliveira sees only signs of progress.

"In the last five years the value of the land in this area of production has gone up 300% and for us this has had a very important wider impact," he says.

"This was land that was practically all cerrado [savannah or grassland] which is now being occupied and has brought an economic benefit for us all."

The mayor is so pleased with the investment so far that his next goal is to attract funds from the Chinese who, he hopes, will back the construction of a railway to the coast.

There are more than 20 foreigners living and working in the area and. if you include the people who are not residents, the number goes up to 50, he says.

Rural exodus?

Asked about possible risks to the local environment, including the cerrado, regarded biologically as one of the richest savannahs in the world, the local agriculture and environment secretary, Eduardo Yamashita, says all progress brings risks:

Many families have had to leave the land. Prices have increased and so has destruction of the environment
Rolf Hackbart
Incra president

"Every process of development and every process of change and transformation causes impacts that are positive and negative.

"We have a negative environmental impact but we have a positive social impact. It means we are developing a region and... the people are getting better living conditions."

However, not everyone shares the perspective of local officials.

The government's land reform agency, Incra, is concerned that the growing purchase of land by overseas investors in making its job more difficult.

It worries that property will remain concentrated in the hands of a small minority and that the environment is being harmed by the pursuit of profitable crops.

Rolf Hackbart, president of Incra, says what is happening in Bahia is not uncommon and that some of the best land in Brazil is going to foreign investors:

"They have bought a lot of land in this area and this has caused a big rural exodus. Many families have had to leave the land. Prices have increased and so has the destruction of the environment.

"Generally there have been some good experiences, but you don't see more trees - you see more machines, fewer people and a lot of fertilizer."

Land reform

But from the perspective of overseas investors, this criticism is unjustified.

Agricultural workers
Land investors say they are creating badly needed jobs

Portuguese-American John Alvernaz Da Silveira runs a dairy farm about 50 minutes from Luis Eduardo Magalhaes, and he has recently opened a cheese plant.

He does not accept the argument that overseas investment is working against the interests of poorer Brazilians:

"What I have built in Brazil, I brought with my savings from the States.

"Everything I'm building in Brazil I'm not going to take back - it's going to be for Brazilians. And the people that work for us, I think they can say they never worked in a better place in the world."

Land reform is a sensitive issue in Brazil, a country where millions live in poverty, and officials are planning in the next few weeks to propose limits on the level of foreign investment.

But for the moment the money is still rolling in and it seems the dust has far from settled on this particular argument.

An American farmer on buying land in Brazil

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07 Aug 07 |  Americas
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13 Jul 07 |  Country profiles

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