But record harvests have not warmed agribusiness to Lula or his center-left Workers’ Party (PT). The sector remains fiercely opposed to Lula’s environmental and social mandates, from preserving the Amazon to land redistribution. With Congress dominated by right-wing parties staunchly allied with agribusiness, appeasing large-scale farmers in the pursuit of broader social goals remains one of Lula’s core challenges. His redistributive agenda hangs in the balance.

Brazil’s status as one of the world’s most unequal nations is starkly obvious in its agricultural sector. Three percent of Brazil’s population owns two-thirds of arable land, while the smallest 50 percent of farms are clustered onto just 2 percent of that territory. Even as giants like Cargill and Raízen enjoy record harvests, half of rural Brazilians are poor. Some 4.8 million rural families are entirely landless. Little wonder that agribusiness remains staunchly conservative, resistant to even moderate reforms of its labour and environmental practices.

Agribusiness enjoyed its golden age under Jair Bolsonaro. After Brazil’s far right ousted the Workers’ Party in 2016, agribusiness dominated Congress, earned massive subsidies, directly dictated agricultural policy, and violently suppressed any movements for agrarian reform. Upon returning the PT to power in 2022, Lula inherited a state that had supercharged the power of agro-capitalists to new heights.

That power remains in place today. While Lula holds the presidency, the agribusiness lobby dominates Congress. The Bancada Ruralista — or “Ruralist Caucus” — contains a staggering 347 of Congress’s 594 deputies and senators, and it is firmly opposed to Lula. This massive agribusiness front is eager to reinstate a right-wing government willing to cater to its preferred policies: “more guns, lower taxes on agribusiness and a sustained rollback of workers’ rights, environmental protection and the demarcation of indigenous territories.”

Agriculture is one of the key fault lines structuring Lula’s presidency. To his right, a powerful agribusiness caucus aims to resist any labour or environmental protections that undercut its bottom line. To Lula’s left, social movements like the Movimento Sem Terra (the MST, or Landless Workers Movement) aim to pressure the government to take a firm hand with large landowners and ultimately pass agrarian reform. Wedged precariously in the middle, Lula has deftly but imperfectly attempted to manage these opposing camps.

Both sides remain key to Lula’s socioeconomic vision — agribusiness as an essential pillar of Brazil’s economy, the MST as Latin America’s largest social movement and a longtime PT ally. Lula’s government has fully satisfied neither landlords or the landless, while offering both enough concessions to avoid either breaking with the PT entirely. This uneasy balance of forces has chilled the three-way struggle between the government, agribusiness, and rural labour to a mutually unsatisfying stalemate.

Understanding this complex set of relationships requires untangling the existing balance of forces, and ultimately the nature of Lulismo itself.

From the moment he hit the campaign trail in 2022, Lula recognized the importance of assuaging agribusiness’s fears of leftist rule. Anyone who thought he would treat agribusiness “in an ideological way,” Lula assured the sector, was mistaken.

Lula made key political appointments with agribusiness in mind, appointing a vice president, Geraldo Alckmin, with deep ties to the sector. The Ministry of Agriculture went to former soy magnate Carlos Fávaro, continuing a long tradition of setting industry insiders at the head of agrarian policy. Lula was also slow to replace bureaucrats appointed by Bolsonaro to Incra, the state land reform agency — a fact that would trigger serious discord with the MST mere months into his administration.

Even bigger concessions have come via huge state subsidies. June saw the launch of the largest agricultural financing plan in Brazil’s history — a massive 364 million reals that outstripped Bolsonaro’s budgets by nearly a third. These funds were coupled with highly favourable interest rates and incentives for farmers to employ eco-friendly farming methods. For agribusiness, the bottom line has always trumped ideological differences. “They know that from an economic point of view they have no problem with us,” Lula told the press.

At the center of these policies lies the PT’s vision of “modern agriculture” — a tidier version of the industrial, export-oriented farming system that has dominated rural Brazil for decades. Without changing fundamental structures of land ownership and monocrop production, the PT aims to reform the sector’s most ecologically and socially regressive practices to advance Brazil as a sleek, sustainable agricultural superpower. Practices recently tolerated by Bolsonaro’s government — from forced labour and deforestation to land grabbing — are now liabilities to a stable agricultural sector.

Perhaps the best instance of “modern agriculture” is Lula’s push to make Brazil a leading exporter of biofuels. The government aims to double its green energy production, mainly via sugarcane ethanol, in order to raise $10 billion USD in green bonds on Wall Street. This newfound emphasis on sustainable agriculture follows classic tenets of Lulismo: pursue growth within limits and we all win. Fail to reform, and Brazil becomes unattractive to overseas capital. “Agro knows that if this agenda is not passed,” concluded finance minister Fernando Haddad, “they will lose the international market.”

In pushing for environmental and social protections as the necessary conditions for continued growth and trade, the Lula government is attempting to play to the better angels of the agro-sector’s nature. Brazilian agribusiness is indeed not a monolith. The PT sees a growing rift between the more traditional, Bolsonarista farmers clustered in central Brazil’s agricultural heartlands, and the proponents of a “conscious agriculture” more inclined to reform — and is attempting to win over the latter. Whether appeals to a growing global premium on sustainability can woo enough of the agribusiness base has yet to be seen.

Lula’s efforts to restore ecological and pro-Indigenous protections to the post-Bolsonaro Amazon suggests that major victories with agribusiness will be hard fought. Agribusiness — especially livestock — is a leading cause of deforestation in the Amazon basin, and the Bancada Ruralista has backed laws opening up the region to ranching, mining, and land grabbing. Even victories for Lula’s sustainability agenda demonstrate the difficulty of pressuring the agro-lobby. While “timeframe” laws restricting Indigenous land rights eventually met a Supreme Court veto, Lula could not prevent them passing both houses of Congress.

Ultimately, however, agribusiness is unlikely to risk outright war with the government. Agribusiness needs the state: subsidies, tax breaks, infrastructure, and trade diplomacy are crucial for the sector to function. With profits on the table, agribusiness has little difficulty “turning a blind eye to ideological difference in the name of political pragmatism.”

For staunchly conservative farmers, the dominant mood is, at best, one of damage control. Luckily for Lula, damage control is not outright hostility. While global commodity prices remain buoyant, Lula has a good chance of shepherding gradual reform of agribusiness’s more destructive practices without alienating the sector entirely. Such regulation may never be popular among the political class, but farming elites may tolerate it given overall economic uplift.

Lula’s rural truce, however, is not just threatened by the beneficiaries of the existing agricultural paradigm but those it has dispossessed.. The challenge to the Left regime in Brazil from the right wing farm lobby is real. President Lula has to deal with this with firmness as also vision. After the loss of Argentina to the far right in last month’s presidential elections, the anti-Left forces in Latin America are resurgent. That is why Lula’s success in solving the impasse is of big significance to the Latin American left. (IPA Service)