The supply chain of Brazilian maize and soybeans: the effects of segregation on logistics and competitiveness

Abstract

Despite the significant advances of Brazilian agriculture, transportation and storage costs still constitute the main barriers to the Brazilian agribusiness. The aim of this article is to analyze the effect of segregation of maize and soybeans in the Brazilian transport and storage logistics, especially genetically modified grains. In the context of the guidelines of the Cartagena Protocol on Biosafety (CPB) as well as of the competitiveness in the international market, we develop a spatial equilibrium model in the form of a mixed complementarity problem. The competitiveness of Brazilian maize and soybeans on the international market is compromised by the inefficient logistics and slow responses to the demands of the CPB. The contribution of the paper is to evaluate how regulatory issues of a segment, in this case biotechnology, may interfere with logistic infrastructure projects.