Farmers go to Ferrogrão

BRASÍLIA – Named the world's largest soy producer, businessman Eraí Maggi is now working on a new project: uniting the producers of his state to build a fund, with contributions measured in bags of soybeans and corn, to build a railway. It is Ferrogrão, which will connect Sinop in the north of Mato Grosso with the river port of Miritituba (PA), in the Tapajós river. The work is estimated at R $ 12.7 billion. "It will be a change, close to the benefits it will bring to the producer," he told the state.

Ferrogrão is a project that has been running for five years without leaving the paper. The idea to build it was based on the major practices: Amaggi, ADM, Bunge, Cargill, Dreyfus and the structure of the Luz Participações station (EDLP). The reason seems obvious: using the ports of the north of the country to bring Brazilian soya beans to markets such as China, Russia and Europe. They have already built export structures in Miritituba, from where the cargo goes via the river to the Belém region.

In recent years, however, the giants have hesitated to provide the necessary resources to build the line, which promises to reduce the cost of transporting soy from R $ 300 per ton to R $ 110 and shortening the grain journey by four days. The immense capital of these companies runs at a time measured in crops, and not in the long term, as is typical for infrastructure projects.

The producers were tired of waiting and decided to put money into the project themselves. Two weeks ago a meeting of the Mato Grosso Soy and Mushroom Growers Association (Aprosoja – MT) unanimously approved the proposal to set up a fund to finance the investment. "It has to increase R $ 600 million per year quietly," said the chairman of the association, Antônio Galvan. He lists three possible benefits for farmers: land valuation, lower transport costs and profits from the operation of the railway, because they will all be partners.

"It's too good, just!" Summed up Erai. "The producer puts 1 to get 10." He is more ambitious and believes that the collection could reach R $ 1 billion a year. "It will be like taking candy out of the mouth of a child," he joked. The minimum prices for truck lorries "oblige" producers to think seriously about the company. The fund was formulated by the president of the EDLP, Guilherme Quintella, in a work that Eraí classified as "brilliant".

Project. "It could work," said Tarcisio Freitas, project coordinator for the Investment Partnerships Program (PPI). He said that for the past two years he "sold" the Ferrogrão project to a number of overseas investors, but the size of the investment and its long duration scared them.

Quintella said that the tradings are willing to enter with 25% to 50% of the funds for building the line. Negotiations with other potential partners, such as investment funds, indicate that their participation will be below the proposed ceiling.

Eraí sees Ferrogrão as a strategy to maintain the competitiveness of Brazilian agribusiness. "It is not good for us to think that only we are beautiful," he said. "The Chinese are leasing land in Russia to plant corn."

The genetic improvement of seeds has enabled the emergence of other areas of grain production in the world that endanger Brazilian leadership in the medium term. Freitas notes that sales of tractors manufactured in Brazil to Eastern Europe are greater than those for Latin America. The region has become a new frontier of soy production, very close to the big consumers. With a drastic reduction in transport costs, the national product will be able to stay better in the competition. "It is our way out," Erai said.

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