Economy

How Brazil’s water crisis could dry up agribusiness

Low levels in hydroelectric reservoirs have raised the alarm nationwide. While the population fears power outages and rationing policies, agribusiness is facing a series of potential production problems

How Brazil's water crisis could dry up agribusiness
Corn fields in Minas Gerais. Photo: Alf Ribeiro/Shutterstock

Brazil is in the throes of its worst water crisis in 91 years. Since Brazil’s meteorological service was created almost a century ago, no other September-to-May period has been as dry as the one between late last year and 2021. According to the administrators of the national power grid (ONS), water reservoirs in the Southeast/Center-West systems — which are the largest in the country — are set to end July at just 26.6 percent capacity.

Capacity forecasts are even lower than 2001, when Brazil was forced to undergo aggressive electricity rationing policies, but failed to avoid massive blackouts. The crisis of two decades ago hindered economic growth, crushed the sitting government’s popularity, and helped Luiz Inácio Lula da Silva to win the presidency the following year.

In a technical note, the ONS admits that eight important Southeast/Center-West hydroelectric reservoirs could be virtually empty by November.

Still, the Jair Bolsonaro administration is confident that this time around, the crisis will not be as severe. 

Mines and Energy Minister Bento Albuquerque went on national television on Monday evening to minimize the risk of electricity shortages, urging Brazilians to use water “conscientiously and responsibly.” While acknowledging public concerns, Mr. Albuquerque said Brazil’s energy mix is robust enough to avoid the dramatic events of 2001. For one, the country’s reliance on hydroelectric power is not nearly as high as it used to be,...

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