BRAZILIAN AGRIBUSINESS China Development Bank - MDIC Meeting Overview China Development Bank - MDIC Meeting Brasília, January 21st, 2011 1

2009 RANKING: BRAZILIAN PRODUCTION AND EXPORTS Sources: USDA and MAPA 2

AGRICULTURAL PRODUCTION INDEX: 1992-2019 FAO-OCDE Projections “Brazil is the fastest growing agricultural sector by far, growing by over 40% to 2019, when compared to the 2007-09 base period.” (OECD-FAO Agricultural Outlook 2010-2019)

AGRICULTURE AREA 2007/2008 HARVEST Most of recent expansion in agricultural area is on pasture land Source: Ministry of Agriculture, Brazilian Institution of Geography and Statistics (pastures – 2006)

MAJOR AGRICULTURAL PRODUCTS IN BRAZIL GROSS VALUE OF PRODUCTION Source: Agriculture and Livestock National Confederation – June 2009 5

BRAZILIAN AGRIBUSINESS EXPORTS MAIN PRODUCTS – 2010* Total: US$ 73.9 billion Source: Ministry of Development, Industry and External Commerce. 2009 Elaboration: Ministry of Agriculture * From November 2009 to October 2010 6

BRAZILIAN AGRIBUSINESS EXPORTS MAIN DESTINATIONS – 2010* Total: US$ 73.9 billion Source: Ministry of Development, Industry and External Commerce. 2009 Elaboration: Ministry of Agriculture * From November 2009 to October 2010 7

DOMESTIC CONSUMPTION AND EXPORTS Roughly 70% of the Brazilian agricultural production aims the national market. Sources: Ministry of Agriculture, Brazilian Institute of Geography and Statistics - 2009 Elaboration: Ministry of Agriculture 8

Corn field Harvesting soybean GRAINS Harvesting cotton Soybean field 9

GRAINS - PRODUCTION AND AREA 1991 to 2010 Growth: 157,3% = 5,1% / year Harvested Area Growth: 24,9% = 1.2% / year Source: National Company of Food Supply 10

MEAT Large scale, state of the art production Biggest exporter of beef and poultry

MEAT PRODUCTION EVOLUTION Broiler: + 170% (95-09) Beef: +70 % (95-09) Pork: + 117% (95-09) High domestic consumption and #1 world exporter Source: Conab ¹ The meat consumption in Brazil is close to 100 kg / inhabitant / year, with more than 43 kg of chicken meat, 37 kg of beef and 14 kg of pork. Domestic demand accounts for about 70% of chicken production, 80% of beef production and 85% of pork production.

SUGARCANE

SUGAR AND ETHANOL: PRODUCTION AND AREA Growth 2002-2009: 93.2% (8.6% p.y.) ETHANOL Growth 2002-2009: 142.4% (11.7% p.y.) Harvested Area Growth 2002-2009: 44.5% (5.4% p.y.) Estimate Sources: Ministry of Agriculture, National Company of Food Supply 14

One country, many flavors Brazilian Coffee One country, many flavors 15

FRUITS: Diversity and Good Quality 16

MILK 17

Increasing production lead to self sufifciency MILK Increasing production lead to self sufifciency Source: Milk National Forum – Brazilian Confedeeration of Agricultrue and Livestock 18

Forestry productivity PLANTED ForestS Planted forests - 6.8 million ha support a diversified wood industry Biggest world exporter of hardwood pulp Highest productivity country in the world Largest growth potential Forestry productivity Hardwood Conifers (Million ha) Source: ABRAF

FOREIGN INVESTIMENT IN AGRIBUSINESS 20

GLOBAL TRENDS World population growth with increasing per capita income Continuous need of food production increase Increasing demand for higher-quality, better, protein-intensive food (i.e.meat) Shortage of new areas for agricultural production Challenges to food security

BRAZILIAN AGRIBUSINESS COMPETITIVE ADVANTAGES Strong, thriving economy & Institutional framework Leadership in tropical technology Natural resources abundance (land, water, solar energy) Farming vocation & Business entrepreneurship

STRONG, THRIVING ECONOMY INSTITUTIONAL FRAMEWORK & INSTITUTIONAL FRAMEWORK Social inclusion & income distribution (upgrowth of middle class) Investment enhancement Consolidated democracy, with stable legal and institutional framework Infrastructure long-term investment program, with strategic actions Sustainable growth based on macroeconomic prudential policies Robust fiscal rules (primary surplus & rigid control of public deficit) Low external vulnerability (with free capital flow) Land investments in Brazil follow well established regulatory procedures permitting several forms of access to foreign investors

Evolution of Foreign Direct Investments in Brazil 2001-2009 24 24

FOREIGN DIRECT INVESTMENTS By origin - average 2007-2009 25 25

STRONG, THRIVING ECONOMY & INSTITUTIONAL FRAMEWORK No restrictions on commodity exports BRAZILIAN TRADE BALANCE (1990 – 2010*) AGRIBUSINESS TOTAL OTHERS Source: Ministry of Development, Industry and Foreign Trade Elaboration: Ministry of Agriculture *Last 12 months (Nov09 – Oct 10)

INFRASTRUCTURE LONG-TERM INVESTMENT PROGRAM STRONG THRIVING ECONOMY & INDUSTRIAL FRAMEWORK

LEADERSHIP IN TROPICAL TECHNOLOGY Continuous & persistent public and private investments on R&D Opened partnerships with other countries Expressive results of productivity Efficient use of natural resources

Producer Support Estimate (Public Support to Farmers) FARMING VOCATION & BUSINESS ENTREPRENEURSHIP Producer Support Estimate (Public Support to Farmers) Brazil’s competitiveness doesn’t rely on subsidies. Source: Organization for Economic Cooperation and Development

TECHONOLOGY and ENTREPRENEURSHIP No tillage (environmentally friendly) Sowing corn (2nd harvest) Harvesting soybean DOUBLE CROPPING - CORN AFTER SOYBEAN Scale, mechanization Two crops in the same year without irrigation 30

FOREIGN INVESTMENT IN AGRIBUSINESS Machinery and Equipments Production Food Processing Infrastructure Distribution Logistics The agribusiness productive chains offer several possibilities for foreign investors: Direct Investment on Projects (Transportation, Storage, Harbourage) Contract Farming (payment in products) Capital Markets (Stocks, Investment Funds) Partnerships and Joint Ventures

Maurício Fleury Curado Ministry of Agriculture, Livestock and Food Supply Department for Agribusiness International Promotion Maurício Fleury Curado Advisor for Foreign Investment Esplanada dos Ministérios, Bloco D, 3º Andar, sala 338 70043-900 - Brasília - DF, BRAZIL Phone: +55 (61) 3218-2425 E-mail: invest@agricultura.gov.br www.agricultura.gov.br 32