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Nilceu Piffer Cardozo

Canaplan Senior Associate Consultant

OpAA73

The rescue of agronomic planning in the Brazilian sugar-energy sector

In its beginnings, Brazilian agriculture had sugarcane as its first and major player, which dates back to the 16th century, in the times of hereditary captaincies. After more than 500 years, of cycles of high and low, it can be said that sugarcane is the surviving crop, which helped in the growth and development of the country, even in moments of great difficulty.

In the last 20 years, the sector has undergone profound transformations, which have left deep marks, not yet completely healed: family businesses and well established in traditional regions were partially replaced by large groups with units distributed throughout the country. Between 2003 and 2013, the area cultivated with sugarcane increased significantly, mainly in regions with little or no tradition and in more restrictive conditions for production.

Degraded soils, with low natural fertility and water storage capacity, in regions with a restrictive climate, with the occurrence of dry spells and high values of accumulated water deficit throughout the season, were chosen during this expansion. At the height of the sector's expansion, in the eagerness for growth and consolidation, agronomy and good production practices gave way to disorderly growth: it was necessary to secure areas, seize the moment, before someone else did.

The rusticity of sugarcane became its biggest enemy, as it was confused with the possibility of high production anywhere, regardless of local limitations or agronomic management adopted. However, everything has its price. The use of degraded cerrado areas brought to light the fragility of sugarcane expansion in Brazil, as many projects underestimated the challenges they would face.

Challenges that went beyond environmental and operational difficulties, extending to economic problems and credit restrictions, in addition to public policies that hampered the consolidation of the sector. It is not by chance that this period also marks the beginning of the reduction in productivity and longevity levels of sugarcane plantations known until then: the production of 12 tons of Total Recoverable Sugar per hectare minus 1 (average in the Center-South of Brazil) suffered a strong reduction and settled at 10 tons of Total Recoverable Sugar per hectare minus 1.

Despite so many challenges (whether environmental or political and economic), common to all involved, the existence of different results was evident: there were those who succumbed, and those who grew up despite the adversities. But what is the difference between them? The big difference between successful and unsuccessful cases can be summed up in just one word: planning.

Companies or producers that planned properly and, just as importantly, followed their planning are those that survived and grew, even in the face of such difficulties. Planning allowed them to be prepared for the difficulties that would come and achieve success. But what is agronomic planning and what is its importance?

Agronomic planning is related to the set of techniques, strategies and assumptions adopted to achieve greater agricultural productivity, reduce costs and achieve the sustainability of the production system. Agronomic planning requires the domain of critical information to the process and the best way to react to it. It is the art of knowing and learning from the past, measuring the present and estimating the future, in order to prepare not only to take advantage of the good opportunities that may arise, but, above all, to defend against adverse events (whether climatic or economic).

The strategy behind good agronomic planning is to answer critical business questions: what, where, how, how much, when and why should I or should not make one or more decisions. Such questions will define the premises of the enterprise, that is, the foundation on which it will be built. These are the “stone clauses” of the planning, which should be the best described and consistent with the reality of each region, time of year, culture characteristics, among other important variables.

The fundamental agricultural assumptions will mainly be related to the soil and climate potential of the region, such as natural fertility, texture and soil water storage capacity, volume and monthly distribution of rainfall, annual water deficit and climatic risks (such as frosts and droughts) . Once these assumptions are defined, it will be possible to design more assertively the resources needed for the project, as well as the best times, places and agronomic recommendations necessary for the execution of cultivation practices.

But there is another question to be answered by planning and which, unfortunately, is forgotten most of the time. Even adequate plans that comply with the conditions described can suffer from unexpected events, and therefore, it is always opportune to ask the question: “What if?”. At this point, planning flirts with the uncertain and seeks to guard against the uncertain future.

The long-term vision is essential to organize the growth and sustainability of the business, with a steady pace of expansion and renewal of the sugarcane fields, in order to avoid additional turbulence in the process. Well-organized companies must know not just where they are now or where they will be next year, but five or ten years from now and how they intend to get there.

The rescue of agronomic planning: In the quest for rapid growth at lower costs, many projects ignored the importance of adequately describing the challenges they would face, and the catastrophic consequences are still being felt today. The perverse logic of the market dictated that environmental challenges should be molded to the budget and the required schedule, something completely outside the reality of what is quality agriculture. In the midst of the crisis that occurred, many units acted in a “survival ” mode, in which planning is confused with the operation itself, limiting itself to what is possible to be done in a strictly short-term view.

After years of turmoil, the sector seems to be experiencing a new “big moment”, of great opportunities, but also of great challenges. After all, climate challenges (such as those of 2021, with severe drought and frost) will always exist, as well as the political and economic oscillations of the country and the world. The great challenge is, then, to fully resume the position once occupied, with organization, high productivity and competitiveness.

And this condition will only be possible with the rescue of adequate agronomic planning, precisely the practice that was most lacking during the disorderly expansion and the subsequent crisis. The perception of the limits of rapid growth and the need for solidity in the development of sugarcane fields have generated changes in agronomic planning, which has been given authority to determine when, where and why operations should take place.

The importance of a well-done groundwork, with the use of correctives and adequate soil preparation, with respect to the ideal conditions and times for planting, harvesting and cultural treatment, has become the great obsession of any company, surpassing even even investment in new technologies. It seems that the sector has finally recognized that there is no off-the-shelf solution to the lack of organization and, furthermore, that there is no more guaranteed return on investment than quality agronomic planning with authority to carry out sugarcane cultivation activities of sugar.