Brazilian agribusiness is a benchmark in the world. The study “Productive sustainability and the forest-saving effect in agriculture: an international comparison”, published in March 2024 by the Institute for Applied Economic Research (Ipea), shows that Brazil is considered a leader in sustainable productivity in the sector. However, in order to pave this path further and further, it is vital that a key issue is on the priority agenda of the sector’s leaders. That is: a commitment to good governance. In addition to good management practices.
The survey compared Brazil with 10 countries. For example, Germany, Canada, China, Spain, the United States, France, among others. The study brings a finding that, although not surprising to many, since this concern is intrinsic to the segment, shows how agribusiness manages to make a generational transition while preserving important values. After all, many companies in this area are family-owned and are sometimes in their third generation.
Good management practices
Another study, entitled ‘Governance in Agribusiness: Perceptions, Structures and ESG Aspects in Brazilian Rural Enterprises’, was carried out by KPMG in Brazil. And by the Brazilian Institute of Corporate Governance (IBGC). It provided a pioneering X-ray of the adoption of corporate governance practices in the sector.
The survey revealed that 85% of respondents consider governance to be important or very important for their business. This in a universe of 367 large rural entrepreneurs, with a high level of education and representative of all Brazilian regions.
Another surprising finding is that, for 54% of those interviewed, the succession plan is seen as the main need. This is ahead of important operational issues such as mapping corporate and operational risks (52%) and improving the internal control and compliance environment (51%). The professionalization of management, another key issue on this agenda, comes in 5th place, with 45%.
New technologies
With more openness to new technologies, including management technologies, many young people are migrating or making careers in companies in the sector, sometimes in small and medium-sized towns. In other words, where a considerable number of companies in the sector are located. However, anyone who believes that this section of the population is a minority in the sector is mistaken.
A 2023 survey by consultancy firm EY, in partnership with CropLife Brasil, an association that brings together the main companies operating in the agricultural production chain, shows that people between the ages of 25 and 44 account for almost 60% of rural entrepreneurs in the country.
From all the data above, it is clear that developing successors in agribusiness is a strategic task to ensure the continuity and sustainable growth of the sector. First and foremost, this process must be carefully planned and executed. Focusing on various fronts to prepare the new generations to lead effectively.
Knowledge
Firstly, it is essential to offer a robust education that combines agribusiness-specific technical knowledge with management and leadership skills. In addition, mentoring and coaching programs can be implemented to facilitate the transfer of knowledge. And experience from current leaders to future successors.
Practical immersion is also essential. Providing young leaders with the opportunity to take on increasing responsibilities within family businesses allows them to develop a deep understanding of the challenges and opportunities of the business. In short, this can range from participating in specific projects to holding temporary strategic positions. But always with continuous monitoring and feedback.
Innovation and good management practices
On the other hand, openness to new technologies and innovation is another important aspect. Encouraging successors to explore and adopt emerging technologies can bring new dynamism to the sector. Thus, promoting efficiency and sustainability.
Finally, fostering an organizational culture that values governance and social and environmental responsibility helps to ensure that the next generations of leaders are aligned with the values and strategic objectives of Brazilian agribusiness.
In short, training well-prepared successors is vital to ensure that Brazilian agribusiness not only maintains its global leadership position. But also continue to evolve and adapt to future demands. In conclusion, investing in training young leaders is investing in the sustainable and prosperous future of the sector.
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