Image by Beto Barata/PR, via Wikimedia Commons.  Accessed 16.10.17

 

Confronted by a second set of corruption charges and unprecedented unpopularity, President Michel Temer has come to depend on the Frente Parlamentar da Agropecuária (FPA) – the powerful agribusiness caucus in Congress – for his political survival. In return for the FPA’s continued support in blocking criminal charges against the president, the Brazilian government has indicated that it is willing to make favourable concessions to the agribusiness sector.

The FPA’s increasing leverage over the government may provide investment opportunities alongside reputational and operational risks.

Impact

  • Congress is likely to reject the latest round of graft charges against President Temer in a vote scheduled for late October, sparing him from trial in the Supreme Court.
  • In return for support from the majority of the FPA’s lawmakers, the agribusiness sector is set to be rewarded with government patronage. Measures under consideration include legalising the sale of land to foreign individuals and companies, and the approval of bills proposed in Congress that would open Amazonian reserves for commercial operations.
  • The availability of previously protected reserves would facilitate investment by the agribusiness, mining and hydroelectric sectors. If these opportunities arise, they would be accompanied by a number of risks for stakeholders, including ethical concerns, protests, and operational security hazards.