IATP is leading a delegation of U.S. environmentalists, academics and corn/biofuel producers down to Brazil (you can read our reports here) to learn more about the intersection of agriculture, biofuels and land use.
“In Brazil, the pressure of the market is overwhelming,” John Wilkinson, professor at the Rural Federal University in Rio, told us as he described Brazilian agriculture in stark terms. We were in the offices of the Institute of Social and Economic Analysis (IBASE) to get the state of play on biofuels, agriculture and the environment in Brazil. IBASE is a long-time friend of IATP (one of IBASE’s four directors, Candido Grzybowski, served many years on IATP’s board).
Wilkinson outlined the history of biofuels in Brazil to an audience hungry for information. Ethanol went from being heavily subsidized by the Brazilian government in the 1970s to a more market-driven approach aided by flex fuel requirements beginning in 2003, according to Wilkinson. Consumers can now decide whether to purchase ethanol or gas (their gas still has 25 percent ethanol) at the pump. More than 90 percent of new cars on the market in Brazil have to be flex fuel, and now that Brazilian sugar ethanol has been classified as an “advanced biofuel” it is expected to increasingly find its way into the U.S. The highly concentrated sugar complex, dominated by sugar, agribusiness and petrochemical companies, is ready to take advantage. Sugarcane processing plants can easily switch from producing sugar to ethanol (depending on what is getting the higher price).
Wilkinson (left) pointed out that the new leaders of the Brazilian sugar industry are very attuned to environmental and social criticisms of the industry. “They believe that ethanol can only survive if it is perceived as a better solution to oil,” said Wilkinson. “The product will die if consumers associate it with deforestation.” One response has been the phase out of manual labor: 50 percent of sugarcane production is now mechanized. Another is the sugar association’s zero deforestation in the Amazon policy. A downside of further mechanization is increased unemployment. And as sugarcane production expands around Sao Paulo, other agricultural production, like raising cattle, is moving into other parts of Brazil experiencing deforestation.
Biodiesel had a different story in Brazil, explained Wilkinson. The government included social requirements that favored family farmers (defined by size, labor and ownership) and it was to target primarily the domestic market, but rapid demand for biodiesel has pushed smaller farmers out of the market, which is now dominated by what is known as the soy-meat complex of mostly large producers (80 percent soy and 16 percent animal fat).
Sergio Schlessinger of FASE (Sustainable Brazil) described Brazil’s natural advantages when it comes to agriculture production, including water, land and tropical temperatures. Despite these advantages, there is little effective land-use planning in Brazil that fully incorporates environmental threats. For instance, land zoning does not take climate change into account. He argued that current environmental certification systems associated with biofuels are too narrow, and should instead consider the entire system.
Chico Meneses, of IBASE, talked about the social implications of Brazil’s push toward an industrial model of agriculture. While hunger and food security continue to be major factors in Brazil’s elections, he pointed to several policies of the Lula government that helped reduce national hunger rates, including straight income transfers. And he highlighted the work of Brazil’s newly formed National Food Security Council, which has created an institutional market for family farmers. The institutional market—government offices, hospitals and schools—need to make 30 percent of their purchases from family farmers. “This is 48 million school meals per day—a market that was unimaginable a short while ago,” said Meneses.
Nevertheless, major disputes over land and agriculture are constant and escalating, according to Meneses. “We are in the middle of the game in these disputes. Where it will end is very difficult to predict.”