The proposal for this paper was written in March 2008, at the height of the commodity boom. Brazil was riding on a cycle which saw the sustained growth of agricultural and mineral exports, directly fuelled by the impressive growth achieved by the world economy. At the time it was difficult to foresee the depth the financial crisis which was already in course.

Although the medium-term effects of the crisis on emerging countries are hard to estimate, it seems clear that the recent cycle has changed the face of Brazilian agriculture. Brazil has become a major agricultural exporter, second only to the United States of America and to the European Union, although government support to farmers is insignificant in comparison to that of OECD countries.

And yet it is not because of its dimension alone that the Brazilian agricultural sector has become increasingly important. Brazilian agriculture is playing simultaneous and sometimes conflicting roles within the country’s development model: it has contributed to macroeconomic stability by guaranteeing valuable foreign currency inflows; it has been harnessed to poverty reduction efforts; and it has contributed (together with important hydrocarbon discoveries and a significant potential for the generation of hydroelectric power) to the country’s energy security strategy, through the expansion of ethanol production.

These three roles have been attributed smaller or greater weight by successive Brazilian governments. During its electoral campaign the Workers’ Party (Partido dos Trabalhadores - PT) underlined the need to combat hunger and improve food security, but under the Lula government Brazil has seen both a boom of agricultural exports and a revival of agro-fuel growth. With the expansion of the agricultural frontier towards the western borders of the country and the Amazon basin, it seems clear that the export, energy and food functions of Brazilian agriculture are, or may soon be, at conflict with each other.

The aim of this paper is to look at how the three functions of Brazilian agriculture have performed under the two Lula governments (2003-2008). The paper is divided into three sections. Section 2 presents some major traits of the Brazilian agricultural sector. Section 3 concentrates on the evolution of the export, energy and food functions of Brazilian agriculture under the PT Government. Section 4 discusses the interaction between the three functions.

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