Opportunity of Irrigation in Brazilian Agriculture

Irrigation plays a crucial role in modern agriculture, ensuring food security and sustainability. Cristiano Oliveira, Associate Professor at the Federal University of Rio Grande and head of research at Rivool Finance, emphasizes that irrigation provides a stable water supply, mitigating risks from irregular rainfall and droughts, resulting in more productive and higher-quality harvests.

According to Oliveira, this practice enables the cultivation of high-value crops that would be unviable without irrigation. However, Brazil faces challenges in maximizing these technologies compared to global agricultural leaders, highlighting the need for strategic investments to promote competitiveness and sustainable growth.

"In 2023, the irrigated area in Brazil represents only 13.2% of its arable land, less than the United States (19.3%) and China (21.2%). The European Union also surpasses Brazil, with 13.4% of its agricultural land under irrigation. Despite growth from 12.3% in 2010 to 13.2% now, Brazil's irrigation infrastructure expansion is still behind its competitors," he explains.

Irrigation can increase agricultural productivity by up to 300%, depending on the crop and conditions. Embrapa studies show that drip irrigation in horticulture can double productivity, accelerating returns on investment and providing significant financial gains, making irrigation highly profitable despite initial challenges.

"Investing in irrigation aligns with private credit adoption in Brazil, given expected returns and maturation periods. Potential returns range from 15% to 50% per year, with payback periods between 1 and 5 years, depending on the system and scale. These factors make irrigation attractive to private investors and financial institutions," concludes Oliveira.