South America Calling

Over one million Brazilians hit the streets of 100 cities Thursday evening in the largest demonstrations in 20 years.

The protests were the biggest in a week of marches, leaving governors perplexed as to where this surge in activism came from.

What started as a small demonstration against bus fare hikes in Sao Paulo has morphed into mass protest over a dizzying array of issues from corruption, poor education and health and the rising cost of living, to more specific gripes such as the high cost of holding the soccer World Cup next year.

If there is a common thread to the demands, it is perhaps greater government accountability. Many Brazilians are tired of being told they have never had it so good when the economy has stalled, graft scandals are monotonously regular and the threat of violence is ever present in their cities.

Governors ceded to the public clamor and lowered bus and metro fares Wednesday. But that didn't stop the movement growing Thursday, making headlines worldwide.

So what happens next?

One of the charms of these protests is that nobody knows.

It is difficult to imagine that a movement with no leadership and such diffuse demands can maintain momentum and effect concrete change.

But it has certainly given an enormous jolt to politicians, who are being lambasted as a class by demonstrators.

Politicians currently don't know how to respond. But they will have to react eventually, and the changes they implement will likely affect business and agribusiness.

I do not propose to try to analyze that impact here -- it would be foolhardy as the situation is so fluid -- but here are a few ideas that have occurred to me.

-- The protestor demographic is young and left-leaning. This group is typically also interested in environmental issues. Government authorities have made it easier for Cerrado grain farmers to obtain licenses to clear land of late. That trend could be reversed?

-- One of the big complaints is that Brazilians pays taxes at European rates but get third-world services in return. If politicians react and education improves, that will be good for business and agribusiness, which is suffering from a lack of qualified labor.

-- The protest movement is urban in nature, but there is a growing acknowledgement across Brazilian society of the importance of agribusiness to the economy.

-- Without farming, Brazil would be showing a trade deficit this year and GDP growth would be risible. Politicians know that and wouldn't take actions that overtly hurt agribusiness to placate protestor demands for investment in other areas such as health.

-- Protestor complaints over rising costs have roots in Brazil's slowing economic performance over the last three years. There is a broad consensus among specialists that economic reforms are necessary to unleash growth potential, but the government has not been willing to spend the political capital necessary to push changes through Congress. Labor or social security reform would be off the agenda, but the need to kick start the economy to placate the population could possibly put tax and regulatory reform in the minds of politicians. That would certainly help agribusiness.

As I said, these are just some ideas rattling around my head.

(AG)

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