VZCZCXRO7936
RR RUEHRG
DE RUEHSO #0918/01 2341846
ZNR UUUUU ZZH
R 221846Z AUG 06
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC 5659
INFO RUEHBR/AMEMBASSY BRASILIA 6733
RUEHRG/AMCONSUL RECIFE 3101
RUEHRI/AMCONSUL RIO DE JANEIRO 7380
RUEHMN/AMEMBASSY MONTEVIDEO 2130
RUEHBU/AMEMBASSY BUENOS AIRES 2422
RUEHAC/AMEMBASSY ASUNCION 2740

UNCLAS SECTION 01 OF 02 SAO PAULO 000918 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR CA/VO/F/P AND CA/FPP 
 
TAGS: CVIS EAGR EINV ETRD ECON BR
SUBJECT: EDUCATIONAL OUTREACH AND ECONOMIC FAMILIARIZATION WITHIN 
AGRICULTURAL REGIONS OF SOUTHERN BRAZIL 
 
 
¶1.  (U) SUMMARY.  In an effort to increase consular outreach and 
deepen understanding of economic conditions in the diverse Sao Paulo 
Consular District, two consular officers completed a driving tour of 
the interior portions of the states of Parana and Sao Paulo. 
Outreach goals were addressed through meetings with Bi-National 
Centers in Curitiba and Londrina in Parana state. To gauge economic 
conditions in the interior, the officers focused on economic 
activity linked to agriculture.  Conoffs toured the largest paper 
mill in Brazil and visited a successful agricultural cooperative. 
Parana proved to be a relatively prosperous state that is 
successfully using its agricultural sector as an engine for growth. 
END SUMMARY. 
 
FACILITATING TRAVEL FOR STUDENTS 
 
¶2.  (U) During meetings with advisors at the bi-national centers in 
Curitiba and Londrina, Parana, the officers discussed the visa 
application process as it applies to students, provided updated 
contact information for the section, and solicited feedback on 
student experiences with the visa process.  Advisors were encouraged 
to inform their students of the current waiting time for interviews 
and the need for advance planning.  Finally, the officers emphasized 
the U.S. Government's continued commitment to facilitate travel for 
students with a legitimate interest in studying in the United 
States. 
 
PAPER PRODUCTION 
 
¶3.  (U) Paper and pulp production is a growing industry throughout 
Brazil, and the Klabin mill, located near Ponta Grossa in 
north-eastern Parana, is the largest paper mill in the country.  The 
factory is primarily dedicated to the production of paper for food 
containers, e.g., milk and fruit juices.  It produces approximately 
2,000 tons of paper per day, half of which is exported, mainly to 
Asia and Europe. 
 
¶4.  (U) The company has over 100,000 hectares of planted forest in 
the state of Parana.  The mill uses a mixture of 50% eucalyptus and 
50% pine for its container paper.  Company representatives said that 
the practice of mixing the quick-growing eucalyptus with pine gives 
the Brazilian producer an advantage over other world-wide 
competitors.  Eucalyptus grows at a rate of 41m3 per hectare per 
year, whereas pine grows at a rate of only 28m3 per hectare per 
year.  Moreover, Klabin is able to harvest three times from a single 
eucalyptus trunk before having to replant.  While the company has 
enough wood to meet its own demand, it also contracts local farmers 
to plant pulp trees to get "buy-in" from the local community 
regarding wood production and to help guarantee adequate future 
supply. 
 
¶5.  (U) Over the last year, the Klabin Company also began 
construction of a new mill adjacent to the existing site.  The new 
plant will double current production. Interestingly, despite 
production growth, direct hires at the current mill have fallen from 
over 2,000 to less than 1,200 due to investments in new technology. 
 
 
A DIVERSE AGRICULTURAL COOPERATIVE 
 
¶6.  (U) The Cocamar Cooperative is a well-organized farmer 
cooperative located in Maringa in north-western Parana. It has over 
6,000 associated farmers and directly employs over 1,000 people.  A 
primary goal of the cooperative is to engage directly in product 
processing and marketing so that farmers are able to retain a 
significant portion of the value added to their products.  Toward 
this end, Cocamar has enjoyed more success than most other Brazilian 
cooperatives.  It processes and markets under its own label a wide 
variety of agricultural products that includes oranges, coffee, soy 
beans, sugar cane and even small amounts of silk.  In fact, local 
silk and cotton help supply the cooperative's clothing manufacturing 
operation. The relative importance of this activity has been reduced 
as regional cotton production has declined over the past decades. 
Even so, the cooperative continues to innovate; for example, 
defective plastic grain-oil bottles are reused as primary material 
for clothing manufacture. 
 
¶7.  (U) The Cocamar Cooperative also strives to make family farming 
a viable business model.  Most of the member farms are smaller than 
100 hectares (about 250 acres). Cocamar leaders perceive a lack of 
rural labor as one of the greatest coming challenges for the 
region's farming sector. Urban migration is a common phenomenon 
throughout Brazil, and Cocamar executives worry that it is an 
increasing threat to agricultural production.  As a result, they 
promote the family farm model, where a diversity of crops on a 
single farm can employ several year-round workers, as opposed to 
 
SAO PAULO 00000918  002 OF 002 
 
 
large mono-crop operations, which require large numbers of temporary 
workers at peak times of the year. 
 
CONSULAR INSIGHTS 
 
¶8.  (U) ConGen Sao Paulo covers six states with an area equivalent 
to that of the western United States (Washington, Oregon, Montana, 
California, Idaho, Nevada and Utah).  Within such a large area, 
there are widely divergent levels of economic development and 
poverty.  This tour of one of the richest agricultural areas of 
Brazil reinforced the contrast between the southern states of Sao 
Paulo and Parana with their northern neighbor, Minas Gerais (which 
Sao Paulo covers solely for NIV purposes).  With the exception of 
the southern border region, the small and medium-sized communities 
within central and northern Minas Gerais are visibly less prosperous 
than similar, agricultural-based communities within Sao Paulo and 
Parana. 
 
¶9.  (U) Outside of overall regional impressions, it is often 
difficult for visa officers to determine the economic situation of 
applicants who do not receive an officially registered salary.  This 
problem is aggravated by the Brazilian tendency to underreport 
earnings for tax purposes.  Farmers are a particularly problematic 
group.  In order to help with decision-making, the discussions with 
the Cocamar, individual farmers and USDA representatives yielded 
some useful points of reference to help with consular decision 
making: 
 
-- Based on current export prices, an acre of producing coffee 
plants yields approximately US$1,000 in profit annually. 
 
-- Cocamar producers claimed that a good living could be made with a 
little over 10 hectares of established orange groves (in Parana a 
tree can produce 150kg of fruit a year, as opposed to only 100kg in 
Florida). 
 
-- Sugar cane is the 'hot' product because of the increased 
international and domestic demand for ethanol.  Returns from 
investment in sugar cane are expected to be high and large tracts of 
land are being converted to its production.  This is especially true 
in northern Parana and in Sao Paulo State. 
 
-- Cigarette producers have negotiated strict production limits with 
individual farmers to diversify production sources.  Each farmer is 
allowed only two hectares of production; however, such small plots 
are highly lucrative and can provide enough income to sustain an 
entire family. 
 
The cost of living in Parana is significantly lower than in 
metropolitan Sao Paulo.  The cost of items such as food, clothing 
and even housing in Parana are a fraction of the comparative cost in 
the city of Sao Paulo. 
 
COMMENT 
 
¶10.  (U) Due to a mix of factors, including drought, availability of 
credit, and the relatively high current value of the Brazilian Real 
on world foreign exchange markets (which hurts even small, 
non-export oriented farmers as local commodity buyers still price in 
dollars), Brazil's agricultural sector remains in what is generally 
described as a state of crisis (see septel on the Consul General's 
trip to the far west of southern Brazil).  Nonetheless, the 
cooperative model seems to be thriving in the state of Parana, and 
Conoffs have noted that numerous cooperative farmers have 
successfully applied for visas in the last year to attend 
agricultural events and exchanges in the United States.  Moreover, 
the Sao Paulo Consulate has a long-standing history with an 
agricultural student exchange program run by a Sao Paulo 
cooperative.  Finally, the impression of both cooperative and USDA 
representatives was that the 'state of crisis' in Brazilian 
agriculture within the states of Sao Paulo and Parana was only 
relative when compared against the extremely favorable conditions 
enjoyed by these farmers over the past few years. END COMMENT.