Source: AFP
The booming economy of southern Brazil has been brought to its knees by historic flooding, with vast tracts of farmland unused and factories paralyzed.
As businesses assess the full extent of the damage, they are calling for aid to help them recover and measures to deal with future extreme climate events.
“No one had losses like we are seeing now,” said Gedeao Pereira, president of the Farmers’ Federation of Rio Grande do Sul (Farsul).
“There is widespread destruction, mainly in the central areas of the state,” he told a news conference.
Historic month-long flooding, attributed by experts to climate change exacerbated by El Nino, left 169 dead and some 600,000 displaced.
AFP looks at some of the main challenges facing businesses in Rio Grande do Sul, one of Brazil’s richest states:
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Counting costs
Source: AFP
The main industries in the area are agriculture and manufacturing.
According to a local industry federation, nine out of 10 factories in the state have been affected by the floods.
A preliminary survey published by Farsul estimated that large landowners lost up to 25 million reais ($5 million).
However, as the waters continue to recede, the true cost of the damage in the region of 11 million residents has yet to be calculated.
“As we continue to visit the state, we are increasingly struck by the level of damage,” Pereira said.
Restoration of transportation
Source: AFP
Many bridges collapsed in the floods and the roads are in dire condition, making it extremely difficult to transport goods.
“The most pressing thing is to restore mobility,” said Angelo Fontana, president of the Chamber of Industry, Commerce and Services of the Taquari Valley, a hard-hit area northwest of the capital, Porto Alegre.
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He told AFP that this would be the first step to get companies back on their feet.
Fontana is a partner in a 90-year-old company of the same name, which manufactures chemical products in the town of Encantado, next to the Taquari River.
The company, which employs 250 people, has yet to restart production after several of its huge chemical tanks were left leaning precariously like the Leaning Tower of Pisa from the force of the water.
More financial aid
Source: AFP
The federal government announced, among other measures, a 15 billion reais ($2.9 billion) credit line with low interest rates and the ability to renegotiate existing debt.
However, Pereira told AFP that “longer repayment periods, up to 20 years” were needed.
The aid is “positive, but more loans are needed” for producers, said Carlos Joel da Silva, president of the state’s Federation of Agricultural Workers, which represents more than 700,000 small-scale farm workers.
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Just treating farmland to make it fertile again is extremely expensive, he added.
Emergency plans
The region has experienced four extreme weather events in the past year and businesses say it’s time for emergency plans to deal with the changing climate.
The Fontana company drew up such a plan after the 2023 floods.
This time, when torrential rains were forecast, “we removed equipment and electronic components from our machines,” said Ricardo Fontana, the company’s director. “That way we limit the damage.”
Risk of employee flight
Angelo Fontana said nearly 10 percent of his company’s workers have asked to quit after the floods, pointing to the risk of a “worker exodus” in the region.
“We have to give them a solution for housing, stability,” he said.
Source: AFP
The threat of extreme weather can prompt some to abandon their businesses altogether.
Da Silva, of the Federation of Agricultural Workers, said small producers who had just recovered from years of drought could be forced to “look for new lands”.
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Alexandre Becker, a dairy farmer in the Taquari Valley, who lost much of his cattle’s feed, said he would get rid of some of his herd.
“If the winter doesn’t go well for us, the way things are going this year, we don’t rule out” leaving the business, he said.
Source: AFP