Road cuts deep into Brazil's Amazon

Boomtown sees rail comparison
In Novo Progresso (“New Progress” in Portuguese), the population has doubled to 40,000 in only five years. Merchants sell everything from chain saws to veterinary supplies in squat concrete buildings erected along BR163, whose dirt stretch also serves as the town’s main street.

Many Novo Progresso merchants compare the paving project to the Transcontinental Railway, which opened up the midwestern and western United States to immigration and development in the 19th century.

Supporters say the highway will bring jobs to help ease grinding poverty throughout Brazil, where many of the 182 million citizens consider themselves lucky to make the minimum wage of $125 a month.

“I’m not against preservation, but we have to find ways to solve Brazil’s social problems. And the way to do this is through development, progress and jobs,” said Mayor Tony Rodrigues, a newcomer who teamed up with Chinese partners to start one of the dozens of new sawmills in Novo Progresso.

No one is trying to stop the paving of BR163; road supporters and critics agree that the economic forces driving the project are unstoppable. After years of delay, Brazil’s Congress opened the project to private funding with a new law in December.

Behind the momentum is Brazil’s thriving agribusiness industry, which accounts for about 40 percent of the country’s gross domestic product and provides tens of millions of jobs.

Soy is king, with Latin America’s largest country second only to the United States in production. Brazil is desperate for a cheaper and faster route to export the commodity because of supply bottlenecks caused by crumbling highways that lead to overburdened ports on the Atlantic Ocean.

Cargill invests in road
BR163 cuts 600 miles off the trip, providing a perfect link from Brazil’s top soy-growing state of Mato Grosso to the Amazon River, where Cargill Inc. — the Minneapolis-based agricultural giant and Brazil’s largest soy exporter — built a $20 million port three years ago in the expectation that the road would eventually be paved.

Shipping a metric ton of soy from Mato Grosso to the Atlantic ports costs about $82 during harvest time, but would cost only $50 to $60 a ton via BR163, said Seneri Paludo, a grains analyst at the AgRural consultancy in Cuiaba, the state capital of Mato Grosso.

Up to 10 million tons could eventually be shipped via the highway annually, translating into shipping savings of up to $320 million a year that would be passed on to customers in Europe and China.

“BR163 needs to happen,” Paludo said. “It would really improve our competitiveness with the North Americans, and has turned into a question of economic viability.”

Indians protest change
But Indians living near the road say loggers are already illegally cutting some of the trees they use to make their traditional canoes, and they worry that the road will bring farmers who will cut down more trees to make way for cattle, soy and other crops.

“The forest gives us our life,” said Francinaldo Rocha, a leader of about 150 Munduruku Indians who eke out a living by fishing, hunting and growing manioc and corn along a tributary of the Amazon River. “The asphalt is really just for the rich.”

The road also would benefit multinational companies like Honda Motor Co. and Royal Philips Electronics NV who set up shop decades ago in the remote free-trade-zone city of Manaus, upriver along the Amazon River from the Cargill terminal.

Instead of using boats to ship computers, cell phones and televisions all the way to southern Brazil, the companies could take advantage of BR163 and cut days and thousands of miles off the trip.

Honda, for example, sends 1 million motorcycles to southern Brazil every year, at a per-bike cost of $42 that could be reduced to $29 via BR163. That’s a $12.5 million savings, said Issao Mizoguchi, Honda’s plant manager in Manaus.

Development plan promised
In a bid to ensure orderly growth, Brazil’s government is finalizing a sustainable development plan to control a land rush that could boost the area’s population from nearly 2 million to as many as 3.5 million by 2020. The draft plan calls for increased federal presence to stem illegal logging and land seizures, and social programs to help poor families and prevent landowners from turning workers into debt slaves.

Critics warn that the government faces a possibly overwhelming task, and doesn’t have the track record to prove it can handle the job. Brazil has some of the strictest environmental legislation in the world, but the laws are often poorly enforced.

“Is the government ready to put a soldier behind each tree?” Adario asked. “This is the question.”

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