Submit to this Journal Review for this Journal Propose a Special Issue

Article Menu

Share Help Cite Discuss in SciProfiles

Open AccessArticle

Peer-Review Record

Transition Paths of Brazil from an Agricultural Economy to a Regional Powerhouse: A Global Supply Chain Perspective

Sustainability 2024, 16(7), 2872; https://doi.org/10.3390/su16072872

by Fernando Coelho Martins Ferreira¹

, Cristiane Biazzin^2,* and Paul C. Hong³

Reviewer 1:

Elena Khudyakova

Reviewer 2: Anonymous

Reviewer 3: Anonymous

Sustainability 2024, 16(7), 2872; https://doi.org/10.3390/su16072872

Submission received: 31 December 2023 / Revised: 26 March 2024 / Accepted: 28 March 2024 / Published: 29 March 2024

Round 1

Reviewer 1 Report

Comments and Suggestions for Authors

1. The authors point out (p. 161) that the authors' conclusions are based on the theory of modernization, which considers society as passing through stages from the traditional agricultural economy to modern, industrialized states. The authors' research began in the 30s, when Brazil was an agrarian country. However, along with the construction of market infrastructure facilities and food industry enterprises and access to the global market, Brazil remains in the global global supply chain as an agricultural country. And so far, the country has not diversified its economy. So, its economy is not quite stable yet. This means that Brazil's development does not fully correspond to the theory of modernization. After all, agriculture is really a driver for the development of related industries – the chemical industry (fertilizers), agricultural engineering, the leather textile industry and others.

2. When analyzing Figure 2, the authors argue that the significant increase in gross output since 1961 (five times) is the result of increased productivity, optimization of agricultural land use, technological advances in agricultural methods and favored significant changes in the global market environment. However, this postulate is not confirmed by anything.

3. There is no quantitative justification for Proposition 2 (Brazil's economic landscape has undergone profound changes, moving from a traditional, labor-intensive agricultural economy to an economy using large-scale, production-enhancing tools and machinery).

4. In Proposition 3, the authors write that the influx of foreign direct investment into various sectors has become a catalyst for economic transformation in Brazil. However, the article does not calculate the regression-correlation dependence of the amount of investments on any indicator of economic growth.

Author Response

We express our gratitude for the editorial decision and the opportunity to review and improve our paper titled "Transition Paths of Brazil from An Agricultural Economy to A Regional Powerhouse: A Global Supply Chain Perspective” (Sustainability-2827267). We extend our appreciation for the valuable feedback provided by the reviewers, and we have diligently considered each aspect raised in their evaluations. Below, we addressed xxx specific points raised by the reviewers. To ensure clarity in our responses, we have implemented a structured approach. First, we outline our understanding of the concern raised by reviewer [x-1]. Further, we present our response to this concern [x-2]. Finally, we detail the actions we have taken to address the concern, labeled as [x-3]. We hope that this structured approach will be helpful in the accurate assessment of our revised paper.

[1] Reviewer 1 – Comment 1:

“The authors point out (p. 161) that the authors' conclusions are based on the theory of modernization, which considers society as passing through stages from the traditional agricultural economy to modern, industrialized states. The authors' research began in the 30s, when Brazil was an agrarian country. However, along with the construction of market infrastructure facilities and food industry enterprises and access to the global market, Brazil remains in the global supply chain as an agricultural country. And so far, the country has not diversified its economy. So, its economy is not quite stable yet. This means that Brazil's development does not fully correspond to the theory of modernization. After all, agriculture is really a driver for the development of related industries – the chemical industry (fertilizers), agricultural engineering, the leather textile industry and others.”

Response Process:

[1-1] Summary of the Reviewer Comments:

The reviewer expects an evaluation of how well the authors' conclusions align with the theory of modernization, considering Brazil's economic evolution from agrarian roots to integration into the global supply chain. Specifically, they seek an analysis of whether Brazil's reliance on agriculture impedes its full modernization and economic stability, despite advancements in infrastructure and market access. Additionally, the reviewer suggests exploring the role of agriculture in driving related industries to understand its broader impact on Brazil's economic development.

[1-2] Our response:

No singular theory or framework can comprehensively depict Brazil's developmental path throughout the 20th and 21st century. To fully comprehend Brazil's economic growth, it is necessary to recognize the intricacies and constraints of individual theories and adopt a comprehensive approach that incorporates many frameworks and empirical facts, while also considering its intricate social and political peculiarities. This facilitates a more profound understanding of the distinctive path of the country's development and the obstacles it encounters in its pursuit of sustainable and equitable progress. In that sense, the authors have chosen to substitute the modernization thesis with a historical account of Brazil's evolution in the past century, illustrating the country's gradual shift to a key position in multiple supply chains. Economic development models have shaped various stages of this transformation, providing support for the historical background. A timeline has been included to emphasize the significant events from the 1930s to the present.

[1-3] Our Action:

Section 2 of the manuscript has been entirely restructured to provide a historical background on Brazil's evolution, as follows (page 2, line 86 – page 6, line 258):

Historical Perspective of Brazil’s Transformation

“The transformation of Brazil's economy away from a monoculture-based structure that lasted for over 400 years can be mostly attributed to the abolition of slavery in the late 19th century. [12]. After the abolition, planters desperately sought European immigrants to replace the lost slave workforce, preventing the coffee plantation industry from collapse [13]. Over 90% of Latin American migrants were European, and Brazil and its neighboring countries offered new opportunities between 1870 and 1930 [14]. Brazil's government realized the labor deficit was urgent and created immigration laws to recruit workers and their families, providing a stable and long-term agricultural workforce [14]. This unusual job system gave immigrants, especially those lured to coffee plantations, lodging and provisions instead of rent, reducing living expenses and enabling savings [15, 16].

This arrangement accidentally prepared colonos for autonomy; by the early 1900s, many immigrants had become successful enough to buy their property and become smallholders, which gained control of many coffee fields by the 1930s [8]. Smallholdings led to agricultural diversification that, beyond coffee, included crops such as maize, beans, rice, and cotton – and the creation of a new agrarian elite, distinct from plantation owners and colonos [16]. Through extensive local and global commercial networks, this arrangement promoted a competitive economy. Early industrialization was driven by capital accumulation from commercial and financial networks not associated with the dominant coffee sector [16]. From the 1930s onwards, the Brazilian government focused on consolidating economic power to fulfill local needs and promote industrial growth, sometimes at the cost of small businesses [17].

- The Role of the State as Promoter of Economic Development

The transformation of Brazil from an agrarian-based economy to a regional powerhouse represents a substantial change in its economic approach. The initial phase of this transition began in 1930 and lasted for nearly 50 years [18]. Notably, the period spanning from 1930 to 1980 signified Brazil's shift from an agricultural civilization to an urban and industrialized one [19], positioning the nation as one of the largest economies in the world. During this period, the state played a significant role in directing and fostering economic growth through strategic interventions, industrial policies, and investments in infrastructure and social welfare. The rationale of government policies was deeply rooted in the developmental state model, which combines the favorable attributes of private business and the constructive function of government with the aim of establishing and overseeing appropriate circumstances for economic development [20, 21, 22, 23].

The post-World War II era ushered in transformative global trade changes and the reconstruction of international infrastructure, setting the stage for Brazil's integration into the global supply chain. Critical analysis of how emerging economies became entwined in these dynamics reveals Brazil's strategic maneuvering within the global market [24, 25]. President Kubitschek's Goals Plan in the 1950s, aiming for accelerated economic growth, heavily emphasized infrastructure development. This not only facilitated modern transportation networks but also positioned Brazil to capitalize on new agricultural opportunities and reduce food import reliance, thereby reinforcing its logistical framework [26]. Following Kubitschek, Brazil faced the dual challenge of global food insecurity and internal economic strains. The Green Revolution [27] and a focus on agricultural exports led to domestic inflation and inequality. Government interventions in commodity markets, through subsidized credit and price supports, sought to stabilize the sector amidst income and land ownership disparities and the prevalence of unproductive latifundia (large agricultural estates) [28, 29].

Additionally, the establishment of the state-owned Brazilian Agricultural Research Corporation, known as Embrapa, in the 1970s was a catalyst for Brazil's economic growth in subsequent decades. Embrapa transformed the country's agricultural landscape and has been contributing significantly to its economic development [30]. Embrapa empowers small farms to overcome obstacles with customized productivity and sustainability solutions, helps smallholders adopt modern farming methods through technology transfer and education, and boosts operational efficiency and competitiveness for major agricultural enterprises. Research on crop varieties, animal management, and sustainability practices helps large-scale producers maximize yields and fulfill global market demands. Embrapa bridges scientific research with practical application to create a harmonic ecology where small farms and major corporations can thrive, contributing to Brazil's agricultural success [31].

Despite experiencing significant economic growth rates throughout the course of five decades [32], there was also a rise in inequality [33] and political instability, characterized by two prolonged periods of dictatorship lasting more than two decades in all. However, the state's position as the facilitator of economic progress remained unchanged during this period.

The Emergence of Brazilian Neoliberalism and the “Lost Decades”

In the early 1980s, the Brazilian developmental state model began to exhibit signs of saturation due to the impact of the oil crisis, increasing inflation, and worsening national accounts [34, 35]. The remarkable rates of economic growth were replaced by a systemic economic crisis, resulting in the 1980s being labeled as a "lost decade" [36]. Brazil still experienced some years of notable economic expansion in 1980s, but at the cost of growing debt and hyperinflation [37]. The country's re-democratization, which reached its peak with the direct election of Fernando Collor de Mello as president, also signified the shift from a developmentalist state model to the neoliberal model. Neoliberalism, albeit having multiple definitions [38], is interpreted in this context as a reconfiguration of governmental authority that prioritizes privatization, finance, and market mechanisms. The role of the state in the economy is reduced, and the state's responsibility to support the well-being of its population is decreased [39].

The Collor administration, however short-lived (he was impeached by congress due to corruption charges), was characterized by the cessation of different types of trade protectionism and a discerning plan for modernization. The measures implemented include deregulation, debt renegotiation, trade liberalization, administrative changes, and privatization [40]. Although Collor made efforts to modernize the Brazilian economy, his actions to curb inflation were ultimately unsuccessful [41], and political and social instability persisted. Only in 1994, with the implementation of the Real Plan, was Brazil able to effectively end nearly two decades of uncontrollably high inflation [42]. The Real Plan, implemented during President Itamar Franco's tenure following his predecessor's impeachment, successfully stabilized the Brazilian economy. This achievement also contributed to the election of Fernando Henrique Cardoso (FHC) as president in 1994, who had served as the Minister of Finance and played a key role in implementing the Real Plan.

President FHC maintained the neoliberal agenda by implementing privatizations, deregulation, and constitutional amendments, and the agribusiness was no exception. In the late 1990s, agricultural policies were liberalized as part of a comprehensive reform that eliminated production and supply control regimes and restructured pricing interventions. Trade liberalization eliminated tariffs on exports, agricultural licensing and quantitative limits, and state regulation of wheat, sugar, and ethanol commerce. Brazil signed major trade deals, which allowed it to shift agricultural resources to areas where it had a comparative advantage in the global market. The departure of less efficient producers and the rise of large farms using economies of scale and technology transformed the agricultural structure [43]. Furthermore, the establishment of MODERFROTA, a program which aimed to modernize agricultural tractors, implements, and harvesters by providing financing for rural producers and cooperatives to acquire these assets at a fixed interest rate, with the goal of increasing the productivity of Brazilian agribusiness, significantly benefited the segment [44].

Despite all FHC’s efforts to modernize the Brazilian economy, financial problems, currency devaluation, and a notable increase in the amount of government debt [45] marked his two terms in office. Particularly, the relative economic stability did not result in significant economic expansion, and there was only a slight improvement in income equality [46]. Indeed, the "lost decade" experienced a more substantial economic growth compared to the 1990s.

The Liberal Neo-developmentalism and the Rise of Brazilian Global Influence

A significant devaluation of the Real and a severe energy crisis paved the way for Luis Inacio Lula da Silva to be elected as the President of Brazil in 2002, marking the end of the FHC era. Lula's administration, marked by its deep socialist and unionist orientation, represented a return to the state as a catalyst for development. During Lula's tenure, the government strengthened its role as an owner and investor in industry and banking, and implemented an industrial policy that promoted an open economy and adopted a cautious approach towards the free flow of capital. At the same time, Brazil experienced substantial privatization, liberalization, and deregulation measures. The developmentalist approach, therefore, was combined with neoliberalism.

Lula’s strategy of incrementally increasing the minimum wage, enacting focused industrial policies to stimulate job creation in specific sectors, and utilizing state-owned enterprises to expand social welfare and employment initiatives aligns more closely with a neo-developmentalist framework [47, 48, 49], and the combination of interventionist strategies with economically liberal policies resulted in a liberal kind of neo-developmentalism [47]. Furthermore, this blended approach was significantly supported by the rise of globalization. During the 2000s, Brazil emerged as a major global provider of mineral and agricultural commodities, particularly to a rapidly growing and influential China, which increasingly drove Brazil's economic growth [50].

Brazil's late 20th-century agricultural expansion turned it into a key exporter of soybeans, beef, and sugarcane, reshaping its role in the global supply chain. With this growth came the necessity to adopt sustainable farming and reconcile the demand for exports with domestic food security [25, 51, 52]. The 2000s further saw a surge in Foreign Direct Investment and agricultural exports, fueled by stable economic policies and market reforms, positioning Brazil favorably for international investors [29, 53]. The Brazilian experience in the global supply chain is also marked by its strategic partnerships and trade agreements. The country has sought to expand its market access and strengthen its position through alliances within the BRICS (Brazil, Russia, India, China, and South Africa) and Mercosur (Southern Common Market). These collaborative networks helped the country to better accommodate global economic fluctuations, trade disputes, and changing consumer preferences in the international arena [27, 54]. Additionally, substantial investments in technology since Embrapa creation and the favorable climate allows for the cultivation of multiple crops each year on the same land [2, 55]. These unique capabilities drew the attention of international investors, and acquisitions globally have strengthened its position [56]. The influx of multinational corporations, foreign investments and consistent exports grow underscore international recognition of Brazil's agribusiness potential [57].

The combination of neo-developmentalism and globalization has proved extremely successful. Between 2003 and 2014, the period covering Lula's first two terms in office and the first term of Dilma Rousseff, Lula's former minister of mines and energy, Brazil's GDP grew by 50%. In 2011, Brazil surpassed the United Kingdom and became the sixth largest economy in the world, reaching the peak of its economic boom [58]. Simultaneously, this era witnessed a substantial decrease in socioeconomic disparity due to the implementation of the federal government's welfare initiatives [59]. Nonetheless, the conclusion of the commodities cycle in 2011, along with uncontrolled government expenditures and excessive intervention by Dilma Rousseff's administration in the economy, weakened the previously prosperous development model and resulted in Brazil experiencing its most severe economic downturn to date, accompanied by untamed inflation. Dilma's impeachment in 2016 was a result of her unpopularity and involvement in corruption scandals. Michel Temer, who was then vice president, assumed the presidency in her place.

The Return of Neoliberalism and the Role of Brazil in Global Supply Chains

The Michel Temer administration not only marked the conclusion of 13 years of left-wing administration in Brazil, but also initiated a subsequent and more profound age of neoliberalism linked to globalization, which reached its peak during the Jair Bolsonaro administration from 2019 to 2022. Temer prioritized fiscal consolidation and the implementation of key economic changes, including labor reform [60]. Bolsonaro subsequently carried on with these reforms and made substantial endeavors to decrease the scale of the government and bureaucracy [61, 62]. Furthermore, significant investments have been made in logistics, with a particular focus on enhancing the competitiveness of Brazilian agribusiness. These investments included the construction of railways and bridges, improvements to roads, and the privatization of ports and airports. The amalgamation of neoliberalism and globalization in this development model failed to yield the same levels of economic growth achieved in earlier administrations in Brazil. Nevertheless, this era was characterized by a significant growth in Brazilian exports, propelled by the agribusiness sector, resulting in substantial trade surpluses. Brazil has become a pivotal player in multiple global supply chains, taking on the direct task of feeding a population of more than 1 billion people in the years to come [63].

In this context, Global Commodity Chain (GCC) Theory forms a relevant theoretical pillar, emphasizing the global interconnectedness of production, distribution, and consumption. This theory explains how value and profits are apportioned within global networks and highlights the power dynamics and economic relationships that shape these chains [64]. For Brazil, GCC Theory explicates the country's evolution within the global supply chains, illustrating its journey from a primary exporter to an influential market participant. It allows for an analysis of Brazil's strategies to enhance its role in global supply chains, considering the broader dynamics of global production from a Brazilian perspective [65].

Brazil’s strategic positioning in global markets, especially considering its shift towards export-oriented agriculture and the subsequent diversification of exports is based on a robust export of commodities like soybeans, beef, and sugarcane [19, 58]. Those businesses have successfully managed to capture value and forge economic relationships within the global market. Since seminal efforts for Brazil’s infrastructure development in the 1950’s the country has improved its position in the global commodity chains. By investing in transportation and logistics, Brazil not only enhanced its internal economic connectivity but also positioned itself more favorably in the global supply network [66, 67, 68]. This aligns with the GCC Theory's emphasis on the importance of distribution and logistical capabilities in enhancing a country's role in the global economy. A summarized timeline of the key events that led to Brazil's rise in the world economy is shown in Table 1.

Table 1, Timeline of Key Events in Brazil's Transformation into a Global Players (1930s-Present)

Source: Devised by the authors”

[2] Reviewer 1 – Comment 2:

“When analyzing Figure 2, the authors argue that the significant increase in gross output since 1961 (five times) is the result of increased productivity, optimization of agricultural land use, technological advances in agricultural methods and favored significant changes in the global market environment. However, this postulate is not confirmed by anything.”

[2-1] Summary of the Reviewer Comments:

The reviewer argues that the authors’ statement is not backed up by evidence from literature.

[2-2] Our response:

We appreciate the comment. In order to corroborate every single affirmation, the following citations were added:

Enhanced productivity:

78. Gasques, J. G., Bastos, E. T., Bacchi, M. R. P., & Ribeiro, V. F. J. E. (2022, May 1). Produtividade total dos fatores na agricultura - Brasil e países selecionados. https://repositorio.ipea.gov.br/handle/11058/11199

Optimized utilization of agricultural land:

51.	Pereira, P. a. A., Martha, G. B., Santana, C. A., & Alves, E. (2012). The development of Brazilian agriculture: future technological challenges and opportunities. Agriculture & Food Security, 1(1). https://doi.org/10.1186/2048-7010-1-4

Technological advancements in farming methods:

79.	Rada, N., Valdes, C., & United States Department of Agriculture Economic Research Service. (2012). Policy, technology, and efficiency of Brazilian agriculture. In Economic Research Report (Report No. 137). https://www.ers.usda.gov/Webdocs/publications/44992/28920_err137.pdf?v=0
80.	Da Silva E Souza, G., Gomes, E. G., Alves, E., & Gasquès, J. G. (2020). Technological progress in the Brazilian agriculture. Socio-Economic Planning Sciences, 72, 100879. https://doi.org/10.1016/j.seps.2020.100879

Favorable shifts in global market conditions:

2.	Valdes, C. (2022, September 22). Brazil’s momentum as a global agricultural supplier faces headwinds. U.S. Department of Agriculture. Retrieved December 5, 2023, from https://www.ers.usda.gov/amber-waves/2022/september/brazil-s-momentum-as-a-global-agricultural-supplier-faces-headwinds/
43.	OECD & FAO. (2015). OECD-FAO Agricultural Outlook 2015. In PART I (p. 61) [Report]. https://www.oecd-ilibrary.org/fr/brazilian-agriculture-prospects-and-challenges_5jrzxx46qkg1.pdf?itemId=%2Fcontent%2Fcomponent%2Fagr_outlook-2015-5-en/1000

[2-3] Our Action:

The references have been added to the statement as follows (page 8, line 321):

“Figure 2 illustrates substantial growth in Brazil's agricultural sector over a span of 60 years. This surge can be attributed to a host of factors: enhanced productivity [78], optimized utilization of agricultural land [51], technological advancements in farming methods [79, 80], and favorable shifts in global market conditions that have benefited Brazilian agricultural exports [2, 43]. Based on these observations, we posit:”

[3] Reviewer 1 - Comments 3

There is no quantitative justification for Proposition 2 (Brazil's economic landscape has undergone profound changes, moving from a traditional, labor-intensive agricultural economy to an economy using large-scale, production-enhancing tools and machinery)..

Response Process:

The reviewer's comment regarding the lack of quantitative justification for Proposition 2 in the manuscript has been addressed in section 4.2 in the following three ways:

Illustration of Agricultural Sector Growth: Figure 2 (page 8) has been used to visually represent and quantify the significant growth in Brazil’s agricultural sector over the past 60 years. This growth is an indicator of increased productivity and efficiency, which supports the proposition that Brazil has moved from a traditional agricultural economy to one that employs large-scale, production-enhancing tools and machinery.

Citation of Contributing Factors: The manuscript cites several factors that have contributed to this growth, which include enhanced productivity, optimized use of agricultural land, technological advancements in farming methods, and favorable shifts in global market conditions that have been advantageous for Brazilian agricultural exports. Each of these factors has a quantifiable impact on the agricultural economy, providing evidence for the transition described in Proposition 2.

Analysis of Economic Transformation and Global Impact: The manuscript discusses the broader economic implications of this transition, noting that it has led to economies of scale in production and a diversification of the agricultural export portfolio. This is presented as the basis for Brazil's evolving role in the global market from a passive supplier to a strategic influencer, capable of driving innovation in global supply chain configurations.

These points collectively offer a quantitative and qualitative justification for the claim that Brazil’s economic landscape has transformed, backing up Proposition 2 with data, referenced literature, and an analysis of the economic impacts of these changes.

***

4.2. Brazil's Agricultural Productivity Growth

A forward-looking view of Brazil's emerging role in the global economy, focusing on its potential to actively shape and redefine global supply chain dynamics [58]. This proposition is grounded in the belief that Brazil's economic growth and diversification will elevate its status from being a passive participant to a strategic influencer in the international supply network. Historically perceived primarily as a resource-rich nation contributing raw materials to global markets, this new perspective envisions Brazil stepping up as a key player with the capability to initiate changes, influence decisions, and drive innovations in how global supply chains are configured [68]. Such a transformation is significant, as it suggests a shift in the global economic balance of power, with Brazil moving to the forefront, asserting its priorities and perspectives in the design, and functioning of international trade networks.

Figure 2: Brazil’s Value of Agriculture Production (constant 2014-2016 thousand $)

[69]

Figure 2 illustrates substantial growth in Brazil's agricultural sector over a span of 60 years. This surge can be attributed to a host of factors: enhanced productivity [70], optimized utilization of agricultural land [43], technological advancements in farming methods [71, 72], and favorable shifts in global market conditions that have benefited Brazilian agricultural exports [2, 35]. Based on these observations, we posit:

Proposition 2: Brazil's economic landscape has undergone profound changes, transitioning from a traditional, labor-intensive agricultural economy to one that leverages large-scale, production-enhancing tools and machinery. This transition has significantly boosted agricultural productivity, leading to economies of scale in production and a broadening of the agricultural export portfolio. Consequently, this transformation has enabled Brazil to transcend its conventional economic roles, fostering a more active and multifaceted participation in the global market.

[4] Reviewer 1 - Comments 4

In Proposition 3, the authors write that the influx of foreign direct investment into various sectors has become a catalyst for economic transformation in Brazil. However, the article does not calculate the regression-correlation dependence of the amount of investments on any indicator of economic growth.

Response:

The concern raised by Reviewer 1, regarding the need for a regression-correlation analysis of the impact of foreign direct investment (FDI) on economic growth, is addressed in Section 4.3 of the manuscript through qualitative analysis supported by figures illustrating FDI trends. Here's how the manuscript addresses the comment:

Demonstrating the Role of FDI in Economic Transition: The manuscript outlines the qualitative impact of FDI on Brazil's transition from an agriculture-based to a manufacturing and service-oriented economy. It argues that FDI brings capital, technology, and managerial expertise essential for developing these sectors (page 8).

Labor Market and Infrastructure Development: It is posited that FDI creates job opportunities, particularly in manufacturing and services, and contributes to infrastructure development. These points are crucial because they highlight the broad economic changes brought about by FDI, beyond direct economic growth indicators (page 8).

Trends and Sectoral Distribution of FDI: Figures 3 and 4 (page 9) are used to visually support the arguments. Figure 3 shows the overall growth trend in FDI in Brazil, indicating increased investor confidence and economic expansion potential. Figure 4 shows the distribution of FDI across sectors, highlighting a shift towards services and indicating a transformation in the economic structure.

While the manuscript does not provide a regression-correlation analysis, it employs descriptive statistics and qualitative descriptions to argue for the transformative role of FDI in Brazil's economy. The authors may consider, if necessary, adding a quantitative analysis or acknowledging this as a limitation and suggesting it as a direction for future research.

Here are the elements in the text mentioned:

“4.3. The Impact of Foreign Direct Investment (FDI)

Foreign direct investment (FDI) flows can significantly influence an agriculture-based country's transition towards a more manufacturing and service-oriented economy [73, 74]. Firstly, FDI often brings capital, advanced technology, and managerial know-how, which are key ingredients for developing manufacturing and service sectors. This influx of resources and expertise helps to establish new industries and modernize existing ones, fostering a shift from traditional agricultural practices to more industrial and service-based activities. Secondly, FDI can create new job opportunities in manufacturing and services [75, 76], attracting labor from the agricultural sector and gradually changing the employment landscape. This labor shift not only diversifies the economy but also encourages the development of a skilled workforce suited for these new industries. Finally, FDI can stimulate local businesses [77, 78] and infrastructure development [79, 80], creating a more conducive environment for manufacturing and services to thrive, further accelerating the transition of the economy away from agriculture.

Figure 3. Foreign Direct Investment in Brazil (US$ millions)

[81]

Figure 3 depicts the trend of Foreign Direct Investment (FDI) in Brazil, measured in US dollars, from 2010 to 2021. There's a notable dip in FDI around 2015-2016, reflecting a period of recession that may have affected investor confidence [82, 83]. However, following this decline, there's a robust recovery and a steady upward trend, with FDI reaching its peak in 2021 within the observed period. This upward trend suggests increasing investor confidence in Brazil's economic prospects, improvements in the business environment, and favorable changes in economic policy [84]. The overall growth trend in FDI indicates a positive outlook for Brazil's integration into the global market and its potential for economic expansion.

Figure 3's upward trend in FDI, particularly post-2016, suggests an environment increasingly favorable to investors, which is mirrored in Figure 4 by the significant and consistent allocation of FDI into the services sector [85]. As FDI inflows have increased, so too has the proportion of investment in services, underscoring the sector's role as a primary beneficiary of foreign investment and a key contributor to Brazil's economic diversification.

Figure 4. Share of Foreign Direct Investment per Economic Sector

[81]

The industrial sector consistently holds the second position, suggesting it also attracts a significant portion of FDI, reflective of Brazil's manufacturing capabilities and potential for industrial growth [86]. Agriculture, livestock, and mineral extraction, despite being critical components of Brazil's economy, attract the least FDI, which could be due to their capital-intensive nature and possibly higher perceived risks, or lower returns compared to the other sectors. This distribution underscores the evolving nature of Brazil's economy, signaling a possible transition from traditional sectors like agriculture to more service-oriented economic activities and indicating where international investors are directing their capital within the country's economy [73, 74]. Figure 3 and Figure 4 suggest that there has been a continuous increase in foreign direct investment flows, favoring non-agricultural sectors such as services over the agricultural sector. This shift has significantly impacted the transformation of an agriculture-based economy into a more diversified and vibrant one [63]. Therefore, we posit,

Proposition 3: The influx of foreign direct investment across diverse sectors has been a catalyst in Brazil's economic transformation. Such investments have not only bolstered Brazil's industrial and service sectors but have also positioned the country as a proactive force capable of shaping and influencing global supply chain dynamics.”

Reviewer 2 Report

Comments and Suggestions for Authors

This manuscript (Sustainability-2827267) analyses Brazil's transition from an agricultural exporter to a dynamic player in the global supply chain. It focuses on overcoming historical limitations and integrating value-added activities to reshape its role and enhance global influence. The structure is currently confusing. It lacks a clear 'Materials and Methods' section and a distinct 'Results and Discussion' section. Restructuring is recommended. The idea and perspective are interesting.

Keywords should be in alphabetical order. Add the unit on the y-axis (e.g., 'Figure 1; % of Total Population') for all the figures in the manuscript. A timeline in the form of a figure would better convey the historical perspective. I have some doubts; perhaps the manuscript could be improved in these areas.

How has Brazil's transformation from a passive contributor to an active player in the global supply chain redefined its role and influence, and what challenges and potential does it face in recalibrating the global supply chain narrative?

Considering Brazil's agricultural evolution, how did the end of slavery in the 19th century and the subsequent recruitment of European immigrants impact its agricultural economy and contribute to its current position in the global supply chain?

What methodological approach does the study use to analyse Brazil's evolving roles in the global supply chain, especially its contributions as a provider of agricultural products, raw materials, and labour, and how does this help in forecasting Brazil's future trajectory in global supply chain configurations?

Comments on the Quality of English Language

The English needs corrections, especially in longer sentences and paragraphs where the idea becomes lost and the writing is confusing. Perhaps polishing the grammar would help.

Author Response

[...]

[5] Reviewer 2 - Comments 1

The manuscript analyses Brazil's transition from an agricultural exporter to a dynamic player in the global supply chain. It focuses on overcoming historical limitations and integrating value-added activities to reshape its role and enhance global influence. The structure is currently confusing. It lacks a clear 'Materials and Methods' section and a distinct 'Results and Discussion' section. Restructuring is recommended. The idea and perspective are interesting.

[5-1] Summary of the Reviewer Comments:

We appreciate the constructive feedback from the reviewer. It is our understanding that the reviewer's critique primarily focuses on the structural aspects of the manuscript. They indicate a preference for a more traditional academic format that explicitly separates the materials and methods used in the research from the results and discussion. This separation typically aids readers in navigating the study more easily, allowing them to understand how the research was conducted before delving into what was discovered and its implications.

While the reviewer finds the manuscript's idea and perspective compelling, they express difficulty in following the narrative due to its current organization. The suggestion to restructure, by introducing clear "Materials and Methods" and "Results and Discussion" sections, aims to enhance clarity and coherence, thus making the findings more accessible to readers.

[5-2] Our response:

We agree and implemented this suggestion of including the methods section in the revised version of the manuscript. This addition outlines our comprehensive secondary data analysis methodology, which we believe will enhance the readers' understanding of the approach underlying our findings.

However, after thorough deliberation, we have decided to maintain the current narrative structure of the manuscript. We believe that the intertwining of results and discussion within the narrative is integral to the flow and coherence of our analysis, allowing us to present a compelling story of Brazil's economic transformation and its implications for the global supply chain. This approach, we feel, captures the complexity and dynamism of Brazil's journey, reflecting the interconnectivity of historical, economic, and policy-related factors in shaping its global supply chain role.

We understand that this decision may differ from traditional academic manuscript structures, but we hope you can appreciate the intention behind our choice. We believe this narrative style adds to the uniqueness and beauty of our work, providing a seamless and engaging exploration of Brazil's evolving role in the global supply chain.

[5-3] Our Action

In response to the feedback from the reviewers, we implemented three key actions. Firstly, we introduced a new section entitled "Methodological Approach" (on page 2, line 69):

“This study employs a comprehensive approach, integrating secondary data from various reputable sources to analyze and address the research objectives. The use of secondary data for analysis and conclusions is well-explored in economics, operations, and supply chain management research [4, 5, 6], providing relevant insights for risk [7], sustainability [8], disasters [9], and health [10], among others. Overall, secondary data are usually collected for a well-established purpose, but they can be used whenever appropriate for a variety of tasks [11].

In this study, the data gathering process involved the systematic collection and analysis of government datasets (such as the US Department of Agriculture, Brazilian official data sources like Banco Central do Brasil, and the Brazilian Ministry of Development, Industry, Trade and Services), economic datasets (such as the World Bank, OECD, United Nations, ABDIB – Associação Brasileira da Infraestrutura e Indústrias de Base, IPEA – Brazilian Institute of Applied Economic Research), newspaper article examinations (Wall Street Journal, Financial Times), and peer-reviewed journals. Moreover, to ensure the relevance and reliability of the data, we applied strict selection criteria. Only data from peer-reviewed publications, official government documents, and reports from recognized international bodies published within the last two decades were included. This criterion ensured that our analysis was grounded in credible and current information.

Finally, we adopted a thematic analysis approach to synthesize the secondary data. This involved coding the data according to key themes related to Brazil's role in the global supply chain, including economic transformation, policy evolution, sectoral developments, challenges faced, and future potentials. The data was analysed and discussed by all authors, in order to avoid bias or misinterpretation. Through this process, we identified patterns, trends, and discrepancies in the data, enabling a nuanced understanding of Brazil's strategic shift from a passive contributor to an active player in the global supply chain.”

Secondly, within the conclusions section, we included a paragraph addressing the limitations inherent in secondary data and our strategies for mitigating them:

“Despite advancements in data analysis techniques, researchers often underutilize existing data to explore new ideas or formulate theories. Some are concerned about their validity in responding to the researcher's objectives or merely providing an acceptable approximation [11]. To address these limitations and concerns, data interpretation was meticulously discussed between the authors in order to minimize misinterpretations or bias. Moreover, this study explored various credible data sources, thereby enhancing the robustness of the analyses for generating fresh insights and proposing innovative perspectives in the field. Rather than creating entirely new theories, the analysis aims to encourage critical thinking”

Finally, as our third measure, we updated the reference list by incorporating the articles referenced in the aforementioned actions.:

“Altay, N., Ramirez, A. (2010). Impact of disasters on firms in different sectors: implications for supply chains. Journal of Supply Chain Management, 46(4), 59–80.

Calantone, R. J., & Vickery, S. K. (2010). Introduction to the special topic forum: Using archival and secondary data sources in supply chain management research. Journal of Supply Chain Management, 46(4), 3.

Choi, T. M., Cheng, T. C. E., & Zhao, X. (2016). Multi‐methodological research in operations management. Production and Operations Management, 25(3), 379-389.

Crum, M., Poist, R., Carter, C.R., Liane Easton, P. (2011). Sustainable supply chain management: evolution and future directions. International Journal of Physical Distribution & Logistics Management, 41(1), 46–62.

Ellram, L. M., & Tate, W. L. (2016). The use of secondary data in purchasing and supply management (P/SM) research. Journal of Purchasing and Supply Management, 22(4), 250-254.

Ghadge, A., Dani, S., & Kalawsky, R. (2012). Supply chain risk management: present and future scope. The International Journal of Logistics Management, 23(3), 313–339.

Kenyon, G. N., Meixell, M. J., & Westfall, P. H. (2016). Production outsourcing and operational performance: An empirical study using secondary data. International Journal of Production Economics, 171, 336-349.

Stentoft Arlbjørn, J., Pazirandeh, A. (2011). Sourcing in global health supply chains for developing countries: literature review and a decision making framework. International Journal of Physical Distribution & Logistics Management, 41(4), 364–384.

Yang, Z., Wang, X., & Su, C. (2006). A review of research methodologies in international business. International Business Review, 15(6), 601-617.”

[6] Reviewer 2 - Comments 2

[6-1] Summary of the Reviewer Comments:

The reviewer provides feedback on formatting and content related to figures and keywords in the manuscript.

Keywords: The reviewer wants the keywords to be listed in alphabetical order. This helps with readability and consistency.

Figures:

The reviewer recommends adding the units of measurement to the y-axis of all figures. This clarifies what the values on the y-axis represent.
The reviewer suggests using a timeline figure to illustrate the historical perspective more effectively.

[6-2] Our response

We value the reviewer's suggestion for more clarity and structure. All their recommendations have been put into effect.

[6-3] Our Action:

Keywords are listed in alphabetical order, as follows:

Keywords: Brazilian Economy; Global Supply Chain Perspective; Regional Powerhouse; Transition Paths.

The units of measurement were added to the y-axis of all figures. For example, figure 4 (page 10):

Figure 4. Share of Foreign Direct Investment per Economic Sector

[78]

A timeline was included in Section 3 of the manuscript to emphasize the significant events from the 1930s to the present that determined Brazil’s transformation, as follows:

Table 1, Timeline of Key Events in Brazil's Transformation into a Global Players (1930s-Present)

Source: Devised by the authors

[7] Reviewer 2 - Comments 3

I have some doubts; perhaps the manuscript could be improved in these areas. How has Brazil's transformation from a passive contributor to an active player in the global supply chain redefined its role and influence, and what challenges and potential does it face in recalibrating the global supply chain narrative?

[7-1] Summary of the Reviewer Comments:

It is our understanding the reviewer is seeking a comprehensive analysis of Brazil's evolving role in the global supply chain, focusing on three main aspects:

Transformation and Redefinition of Role: Here, the expectation is to explore how Brazil has shifted its position within the global supply chain landscape.

Challenges Encountered: This point requires identifying and discussing the obstacles Brazil faces as it aims to solidify its position as a key player in the global supply chain.

Potential and Opportunities: The final aspect focuses on the future prospects and untapped opportunities that Brazil can leverage to enhance its global supply chain participation.

[7-2] Our response:

Thank you for your enquiry about this important topic. As we stated in the article, we explained this transition as follows:

Transformation and Redefinition of Role - Brazil's journey from a predominantly agricultural economy to becoming an integral player in the global supply chain represents a profound transformation, challenging traditional perceptions of its role. Historically rooted in agriculture and raw materials, Brazil has strategically revolved towards industrialization and services, significantly during the period from 1930 to 1980, marking its transition to an urbanized and diversified economy. The state played a crucial role in this transformation, utilizing strategic interventions, industrial policies, and investments in infrastructure to foster growth. As highlighted on page 3, the emergence of Embrapa in the 1970s transformed the agricultural landscape, positioning Brazil as a formidable force in global agricultural markets. This shift has not only diversified Brazil's economic base but also enhanced its global market contributions, allowing it to take on a more dynamic and influential role within international trade dynamics.

Challenges Encountered - Despite its achievements, Brazil faces significant challenges in reinforcing its position in the global supply chain. One of the major hurdles is the substantial investment gap in critical infrastructure sectors, particularly transport and logistics (page 11), which impacts the efficiency of goods movement and overall economic productivity. The article indicates underfunding in these sectors, suggesting a potential bottleneck for Brazil's economic development and global supply chain integration (page 11). Additionally, Brazil's reliance on domestic markets by its leading companies underscores a challenge in global expansion, potentially limiting its influence in international markets (page 15). Addressing these challenges is crucial for Brazil to navigate its global supply chain recalibration successfully.

Potential and Opportunities - Brazil's potential to reshape the global supply chain narrative and enhance its influence lies in its strategic advantages and untapped opportunities. With a rich reservoir of natural resources and a strong foundation in agriculture (page 15), Brazil is well-positioned to leverage its capabilities in emerging sectors such as technology and manufacturing. The influx of FDI, especially in non-agricultural sectors, underscores Brazil's diversification efforts and presents opportunities for economic expansion. By tackling infrastructural deficits and fostering innovation, Brazil can capitalize on these strengths to achieve sustainable growth and a more pronounced role in the global supply chain (pages 10 to 12). Future strategies could include policy reforms, further investments in infrastructure, and embracing technological advancements to overcome current challenges and realize its potential as a global leader in supply chain contributions.

[7-3] Our Action:

After careful consideration and a detailed review of the article in light of your question, we believe that the manuscript, as it stands, comprehensively addresses the inquiry regarding Brazil's transformation in the global supply chain, including its evolving role, the challenges it faces, and its potential for recalibrating the global supply chain narrative. The sections of the paper that were highlighted in your comments already include an extensive discussion of these aspects, supported by evidence and examples that articulate Brazil's journey, its strategic pivot, and implications for global trade dynamics effectively.

We have taken every effort to ensure that our analysis is both thorough and reflective of the current scholarship on Brazil's economic transformation and its impact on the global supply chain. Given the depth and breadth of the analysis already present in the paper, we feel that further adjustments or additions in response to this question may not necessarily enhance the clarity or value of the arguments presented.

[8] Reviewer 2 - Comments 4

[8-1] Our response

We value your highly pertinent feedback. We found that the manuscript's historical background was insufficient in depicting the historical context that led to Brazil's transformation and its emergence as a key player in different supply chains, highlighting the strong link between Brazil's economic history and its agriculture. Under such circumstances, questioning the impact of slavery and immigration on the Brazil’s current position in the global supply chain is totally reasonable.

We significantly expanded the section “Historical Perspective of Brazil’s Transformation” to make sure a clear social and economic context is provided. As indicated by the revised historical context, the abolition of slavery and the influx of immigrants in Brazil resulted in the diversity of crops, moving away from monoculture and fostering the country's industrial progress. Only after the 1930s, Brazil emerged as a significant player in various agricultural productions.

[8-2] Our Action:

Section 2, titled "Historical Perspective of Brazil’s Transformation," was completely revised to offer a comprehensive historical background of the country's evolution into a significant global force. Regarding slavery and immigration, the following statements were inserted (pp. 2-3, lines 94-110):

[9] Reviewer 2 - Comments 5

What methodological approach does the study use to analyze Brazil's evolving roles in the global supply chain, especially its contributions as a provider of agricultural products, raw materials, and labour, and how does this help in forecasting Brazil's future trajectory in global supply chain configurations?

[9-1] Summary of the Reviewer Comments:

The questions made by reviewer 2, basically refer to a description of the methodology adopted and a clear justification on how this methodology meets the research objectives.

[9-2] Our response

We express our gratitude to Reviewer 3 for identifying this opportunity for elucidating and enhancing our study. This query aligns with the feedback provided by Reviewer 2, addressed in Topic 5 of this correspondence. Consequently, we have adhered to the recommendation by incorporating a section entitled "Methodological Approach." A detailed account of our efforts to address this suggestion is provided in Topic 5. However, we wish to delineate our response to these specific inquiries as follows:

About the methodology - In our study, we employed a comprehensive secondary data analysis methodology to investigate Brazil's transformation in the global supply chain. This approach involved a systematic review and synthesis of existing literature, official reports, statistical databases, and previous research findings relevant to Brazil's economic development, supply chain dynamics, and global trade participation. We meticulously selected secondary data from reputable sources, including academic journals, industry reports, government publications, and international organizations such as the World Bank, the United Nations, and the Food and Agriculture Organization. These sources provided robust data on Brazil's economic policies, agricultural and industrial growth, infrastructure development, foreign direct investment (FDI) trends, and global trade relations.

Moreover, to ensure the relevance and reliability of the data, we applied strict selection criteria. Only data from peer-reviewed publications, official government documents, and reports from recognized international bodies published within the last two decades were included. This criterion ensured that our analysis was grounded in credible and current information.

Justification of the choice - This secondary data analysis methodology allowed us to construct a comprehensive narrative of Brazil's evolving global supply chain role, grounded in existing empirical evidence and scholarly discourse. It facilitated an in-depth exploration of the subject matter, leveraging the wealth of information available in the public domain to contribute meaningful insights into Brazil's global supply chain dynamics. Firstly, by synthesizing data from academic research, official reports, and international organizations, the methodology offers a holistic view of Brazil's economic, social, and political landscape. This broad perspective is crucial for identifying long-term trends and patterns in Brazil's development, providing a solid foundation for forecasting. Secondly, focusing on specific sectors such as agriculture, and examining their contributions to Brazil's economy and supply chain configurations, allows for sector-specific forecasts. Finally, by including data spanning some decades enables an understanding of how Brazil's role in the global supply chain has evolved over time in response to both internal and external factors. By analyzing the impacts of past policies, economic shifts, and global market dynamics, we can infer potential future changes in Brazil's supply chain involvement based on historical precedents and ongoing trends.

[9-3] Our Action:

We included a new topic in the study titled “Methodological Approach” (page 2, line 69). A detailed explanation of this action is referenced in topic 5 from this correspondence.

Reviewer 3 Report

Comments and Suggestions for Authors

The paper “Redefining Brazil's Destiny: The Journey from Agricultural Giant to Regional Powerhouse in the Global Supply Chain Arena” analyzes Brazil's evolution in the global supply chain.

The introduction touches on many aspects of Brazil's evolution from its agricultural past to current challenges. Still, for clarity and to emphasize the importance of the research, the research objectives and questions should be specified. The introduction should also detail the structure of the paper and what each section contains.

The paper presents a theoretical framework and the theories used. Still, a better explanation of the research methodology (possibly graphically) would add value and clarity to the research and improve understanding.

The conclusions are formulated, well-argued, comprehensive, and supported by the elements presented in the article. The conclusions could be more concise and focused on critical elements. The connection between the results and the research questions should be specified in the conclusions.

Table 3 lists the source as Statista (2023), which the bibliography cannot identify. Similar attention is also needed for the sources of other tables and figures to ensure they can be easily located.

The work presents a thorough analysis of Brazil's positioning within the global supply chain, well-argued, substantiated, and bibliographically referenced, but it can be improved for clarity and conciseness.

Author Response

[10] Reviewer 3 - Comments 1

[10-1] Our response

Thank you for your invaluable feedback on our manuscript. Your insightful comments have greatly contributed to its improvement. In response to your suggestions, we have incorporated a new paragraph in the introduction that outlines the structure of the paper. This addition aims to enhance reader comprehension and provide a clear roadmap for navigating the manuscript (page 2, line 57).

“The structure of this manuscript is designed for an in-depth examination of Brazil's changing position within the global supply chain. Initially, it outlines our methodology, which utilizes secondary data analysis as the foundation for our study. It then proceeds to explore the historical context of Brazil's development, starting from the crucial shift in 1930 from an agrarian to a more diversified economy. This examination includes a review of the economic and political strategies influencing Brazil's path over the decades. Following this, we present our propositions on Brazil's capacity to leverage its abundant natural resources beyond agricultural products, potentially enhancing its contributions to higher-value segments of global supply chains. The paper concludes by summarizing our findings and discussing the broader implications of Brazil's transformation for the configuration of global supply chains, providing valuable perspectives for policymakers, industry practitioners, and academic researchers.”

[11] Reviewer 3 - Comments 2

[11-1] Summary of the Reviewer Comments:

The questions raised by reviewer 3, refer to a description of the methodology adopted.

[11-2] Our response

This query aligns with the feedback provided by Reviewer 2, addressed in Topic 5 of this correspondence. Consequently, we have adhered to the recommendation by incorporating a section entitled "Methodological Approach." A detailed account of our efforts to address this suggestion is provided in Topic 5. However, we wish to delineate our response to these specific inquiries as follows:

[11-3] Our Action: