Chemical storage tanks damaged by flooding in Encantado, Brazil, May 22, 2024 (AFP/Nelson ALMEIDA)
Damaged agricultural land, shut down factories: the historic floods which hit the south of Brazil have put a dynamic economy on the ropes, which must now assess the damage and deal with the most urgent matters in order to survive.
“We have never suffered such losses,” summarized Gedeao Pereira, president of the Federation of Farmers of the State of Rio Grande do Sul (Farsul), this week.
“It is widespread destruction, especially in the central region of our state,” he insisted at a press conference.
Rio Grande do Sul is the sixth most populous state in Brazil, with nearly 11 million inhabitants, and one of the richest in Latin America’s largest economy.
It has been a month since it was overwhelmed by devastating floods with, beyond the material damage, a terrible human toll: some 170 dead, dozens missing and more than 600,000 people having to leave their homes.
It is primarily an agricultural region, where soya is produced in particular. This is reflected in the industry, where the meat sector is one of the most dynamic.
An employee cleans the mud that accumulated at an industrial site after flooding in Encantado, Brazil, May 22, 2024 (AFP/Nelson ALMEIDA)
Nine out of ten factories in the region were affected by the floods, according to the local industry federation. Farsul estimates that large farmers lost up to 25 million reais (around 4.5 million euros).
“The more we visit (disaster areas), the more we are impressed by the extent of the damage,” underlines Mr. Pereira.
Here are the main challenges facing the economy of Rio Grande do Sul:
– Priority: restore transport –
The floods destroyed bridges and damaged roads, extremely complicating both the transport of goods and the supply of raw materials.
Not to mention the damage caused by flooding within factories themselves, preventing the resumption of production.
An employee cleans an industrial site in Encantado, Brazil, May 22, 2024 (AFP/Nelson ALMEIDA)
“The most urgent thing is to restore mobility,” Angelo Fontana, president of the Chamber of Industry, Commerce and Services of the Taquari Valley, one of the most affected areas, told AFP. , in the central region of Rio Grande do Sul.
Founded 90 years ago, his chemical products company, Fontana, which employs 250 people, has still not resumed production in the town of Encantado. Huge chemical warehouses outside the factory now lean like the Tower of Pisa after being hit by the force of the current.
– Essential financial aid –
One of the main measures recently announced by the federal government is the provision by the public development bank BNDES of 15 billion reais (around 2.7 billion euros) in low-interest credits for businesses. . Other credits are available to farmers.
But Gedeao Pereira told AFP that he would have preferred “more consistent measures”, and in particular “longer repayment periods, up to 20 years”.
Government aid “is positive, but more credit is needed,” says Carlos Joel da Silva, president of the Federation of Agricultural Workers of Rio Grande do Sul, which represents 700,000 small producers.
According to him, farmers will have heavy expenses just to revitalize their land and make it fertile again.
– Focus on prevention –
In a region which has suffered four extreme climatic events in less than a year, economic players have understood that it is essential to develop prevention plans.
Employees clean an industrial site invaded by mud after flooding in Encantando, Brazil, May 22, 2024 (AFP/Nelson ALMEIDA)
Thanks to this type of plan, the Fontana company has “limited the damage”.
“As soon as we saw the forecast for more torrential rains, we removed the equipment and electronic components,” says factory director Ricardo Fontana.
– Retain labor –
His colleague Angelo Fontana also fears an “exodus of labor” available in Rio Grande do Sul.
Nearly 10% of its employees have expressed a desire to leave. “We need to give them housing solutions so that they can find stability,” he says.
For Carlos Joel da Silva, certain small rural producers, who are barely recovering from several years of drought, risk having to “look for other land”.
Alexandre Becker, a dairy farmer from the Taquari valley who lost a large part of the food stored for his cows, will not be able to keep all his livestock.
If things don’t improve in the coming months, “we could end our business,” he warns.
© 2024 AFP
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