Historic Floods Devastate Southern Brazil's Economy

Historic Floods Devastate Southern Brazil's Economy
Historic Floods Devastate Southern Brazil's Economy

The thriving economy of southern Brazil's Rio Grande do Sul state has been devastated by historic monthlong floods, leaving vast agricultural lands unusable and factories paralyzed. As businesses tally the full extent of damages, they are urgently seeking aid to recover and measures to deal with future extreme climate events.

"No one has had losses like we are seeing now. There is widespread destruction, mainly in the central regions," said the president of the state's farmers federation. The floods, linked to climate change and El Niño, left 169 dead and 600,000 displaced.

Agriculture and manufacturing are the key industries hit hard. Nine out of 10 factories were affected, with preliminary estimates of up to $5 million in losses for large landowners alone. But with waters still receding, the true cost in the 11 million population region remains unknown.

Restoring transport is the top priority after multiple bridges collapsed, severely disrupting the movement of goods. Companies can't restart operations until mobility is restored, said an industry leader whose chemical firm employs 250 but has tanks leaning precariously.

While the federal government announced $2.9 billion in low-interest credit lines, businesses say longer 20-year repayment periods are needed, especially for treating farmland. More loans are required for small producers just to make land fertile again.

After four extreme weather events in a year, contingency plans are crucial. One company limited damage by removing electronics when forecasting torrential rains.

However, an employee exodus looms, with 10% already quitting one firm seeking housing stability. Small producers recovering from drought may be forced to abandon businesses entirely and "seek new lands" if harsh conditions persist.