Until the middle of the 1960s, fertilizer consumption in Brazil was very low and the mixtures were produced in areas close to the ports, since most raw materials were imported. In the second half of the 1960s, the Brazilian industry started to locate the production of the fertilizer mixtures close to the demand areas. This was accompanied by the provision of services such as soil sampling and analysis, advice on the type and time of application of fertilizers etc.
At the same time, the Brazilian fertilizer industry implemented an intensive advisory program for the use of fertilizers, through the FAO-ANDA-ABCAR Project. This project consisted of a series of field demonstrations throughout the whole country and contributed to a strong increase in fertilizer consumption in Brazil. As a result, Brazilian demand for fertilizers increased from 360 thousand tonnes of nutrients in the 1960s to 3 291 thousand tonnes of nutrients in the 1980s, reaching an average consumption of 7 029 thousand tonnes of nutrients for the period of 2000 to 2002.
Today the distribution of fertilizers in Brazil is carried out by the private sector. State owned companies participated in distribution only from 1976 to 1981. Although the state-owned companies were privatized only in 1992, already in 1982 the government had transferred the mixture and distribution of fertilizers to the private sector. The activities of the state-owned sector were restricted to the production of raw materials and straight fertilizers.
The participation of agricultural cooperatives in the distribution of fertilizers has recently shown some growth. Agricultural cooperatives account for about 10 percent of current fertilizer demand. They purchase the product from the compound fertilizer producers and then sell it to their members but they also produce fertilizer mixtures themselves. This has increased the share of the cooperatives in the production of fertilizer mixtures from 2 percent in the 1990s to 5 percent at present.
Today 35 percent of fertilizer sales are financed through official agricultural credit, administered essentially by the Banco do Brasil (a Federal Government Bank). Joint operations between the fertilizer industry and the agribusiness sector (producers of vegetable oils, textile, tobacco, etc) are responsible for the financing of 18 percent of the sales. The cooperatives are also increasing their role in the financing of the purchase of fertilizer mixtures by their members. Although their participation is still very low (financing 5 percent of the total sales), their share is tending to increase since the cooperatives charge lower interest rates. The remaining 42 percent of the sales are financed either from the farmers’ own resources or through commercial banks.
