Brazil's Ethanol Plan Breeds Rural Poverty, Environmental Degradation
Brazil's Ethanol Plan Breeds Poverty, Enviro Degradation
Via NY Transfer News Collective * All the News that Doesn't Fit
IRC Americas Program - Mar 6, 2007
Brazil's Ethanol Plan Breeds Rural Poverty, Environmental Degradation
by Isabella Kenfield
On Jan. 22 the Lula administration announced it will increase federal
funding for Brazil's sugar-based ethanol industry by almost US$6 billion
over the next four years. One day later, U.S. President George W. Bush
declared in the State of the Union address his goal to reduce U.S. use of
gasoline 20% by the year 2017.
The general response in Brazil to Bush's announcement was overwhelmingly
positive. Luis Fernando Furlan, Minister of Industry, Development, and
Commerce, was quoted in the Gazeta Mercantil as saying he received Bush's
announcement "with applause."
"It is a fantastic business opportunity," Luis Carlos Correa Carvalho, an
industry consultant, told Reuters. "We have never had such a great
opportunity for the substitution of petroleum."
The United States is currently the largest importer of Brazilian ethanol.
Last year it imported 1.74 billion liters, or 58% of the total three
billion liters that Brazil exported. For the United States to reach Bush's
target reduction of gasoline use, the country will need an additional 135
billion liters of ethanol annually. Because it will not be able to produce
the entire amount, no doubt a large portion will come from Brazil.
Brazil is the global leader in ethanol exports. In 2006, the country
exported about 19% of the total 16 billion liters it produced, providing
70% of the world's supply.
This amount will soon increase. A partnership between the Ministry of
Science and Technology and the University of Campinas in S�o Paulo is
currently conducting a study to plan Brazil's ethanol exports as a
substitute for 10% of the global use of gasoline in 20 years.
If this plan is successful, the country's ethanol exports will total 200
billion liters by 2025--an increase of almost 67%. The geographic area
planted with sugarcane will increase from 6 million to 30 million hectares.
Is Ethanol the Solution or the Problem?
Many citizen organizations in Brazil are concerned that what appears to be
an economic panacea may be a social and ecological disaster. They claim
that as the industry expands and more hectares are planted mono-cropping
sugarcane, existing problems in rural areas of landlessness, hunger,
unemployment, environmental degradation, and agrarian conflicts will be
A recent declaration from the Forum of Resistance to Agribusinesses, a
consortium of non-governmental organizations (NGOs) throughout South
America states, "The implementation of the model of production and export
of biofuels represents a grave threat to our region, our natural resources,
and the sovereignty of our people."
There is concern that while expansion of the ethanol industry may boost
Brazil's GDP and some Brazilians will become very wealthy in the process,
the majority of the population will not benefit from the ethanol export
boom. Given U.S. plans to increase imports of Brazilian ethanol and the
alliance slated to be forged during Bush's South America visit in March, it
is likely the livelihoods of many Brazilians, especially the rural poor,
will be subordinated to maintain U.S. consumption.
"The era of biofuels will reproduce and legitimize the logic of the
occupation of rural areas by multinational agribusiness, and perpetuate the
colonial project to subvert ecosystems and people to the service of the
production and maintenance of a lifestyle in other societies," states the
Forum. The group alleges that Brazil's effort to supply the Global North
with ethanol is simply a repeat of the same model of economic growth via
agro-export that has been practiced since Portuguese colonization.
Agricultural production for export in Brazil has traditionally been a model
imposed on the country by more powerful nations in the North, alongside a
small group of Brazilian landowners. Agro-export generates vast amounts of
wealth for a few Brazilians, and exploitation and poverty for many others.
Brazil's high rate of income inequality is inseparable from the fact that
it also has one of the most unequal rates of land distribution. The sugar
industry is a classic example of Brazil's land and income inequality.
A Bittersweet Future
Brazilian ethanol is produced from sugarcane, which has always been a
primary agricultural commodity for the country. Because ethanol relies on
sugarcane as its primary material, the industry is linked to the social and
economic dynamics in rural areas that have developed from sugarcane
production since the colonial era, most importantly labor exploitation and
According to Marluce Melo of the Pastoral Land Commission (CPT) in the
northern Brazilian city of Recife, Pernambuco, "Rural poverty has always
been intrinsically related to the economy of sugarcane. Even in the 1970s,
when Pernambuco was the largest national producer of sugarcane, the levels
of poverty were amongst the highest in the world."
In many ways, things have changed little on the sugarcane plantations since
"The problems with [sugarcane's] production today are very similar to the
problems it generated hundreds of years ago," says Maisa Mendon�a, Director
of the S�o Paulo-based NGO Rede Social. Sugarcane fieldworkers endure some
of the hardest labor in the world. According to Mendon�a, Brazil has the
lowest cost of production in the world because of the industry's dependence
on labor exploitation, including massive slave labor, and its refusal to
implement environmental regulations. In S�o Paulo the cost of production is
US$165 per ton; in Europe it is US$700 per ton. I n S�o Paulo the median
monthly salary for a field laborer on a sugar cane plantation is US$195; in
Pernambuco it is US$167.
It is estimated that 40,000 seasonal migrant laborers from the Northeast
and Minas Gerais state work in the annual harvest in S�o Paulo. They work
long hours in extremely hot temperatures, cutting as fast as they can
because their pay is based on the weight of their cuttings.
Maria Aparecida de Mor�es Silva, at the State University of S�o Paulo,
reports that the required rate of productivity for cane cutters is
increasing. In the 1980s, the average rate of productivity demanded of an
individual cutter was between five and eight tons of sugarcane cut per day;
today it is between 12 and 15 tons. From 2004 to 2006, the Pastoral of
Migrants registered 17 deaths from excessive labor in S�o Paulo, and in
2005 the state's Regional Delegation of Labor registered 416 deaths of
workers in sugar-based ethanol production.
Concentration in the Industry
As it grows, the sugar-ethanol industry has undergone a process of
increasing concentration and vertical integration, as large corporations
invest in land and production. According to a banker who finances loans to
the ethanol industry in S�o Paulo and asked to remain anonymous, in the
past control of the industry was dispersed among smaller businesses. Sugar
mills were owned by individual owners who controlled both cultivation and
Today Brazil has 72,000 sugar producers, and the ten largest producers
still control less than 30% of production. However, the banker says, "The
current trend is toward concentration, with a large number of mergers and
Many of the larger companies that are buying out the smaller companies are
multinational agribusiness corporations. "The participation by foreign
capital in the production of sugar and ethanol is currently 4.5%, and this
number is going to grow. Recently many foreign groups are looking to invest
in this industry in Brazil, due to one of the lowest costs of production in
the world," says the banker.
Sugarcane seems to be following the same pattern of foreign investment and
concentration as that of soybeans. Today almost all soybean production in
Brazil is controlled by a handful of multinational agribusinesses.
Many of the corporations that control soybeans are now investing in the
ethanol industry. Among the multinational agribusinesses investing in the
industry are, according to the banker, Louis Dreyfus Commodities and
Tereos, both based in France, as well as U.S.-based Cargill. The Louis
Dreyfus site states the company is one of the three largest sugar traders
in the world, and owns three Brazilian sugar mills with a fourth mill
currently under construction in Mato Grosso do Sul . The company produces
450,000 tons of sugar and 150,000 cubic meters of ethanol annually.
According to the Cargill website, in addition to being Brazil's largest
soybean exporter and second-largest processor, Cargill is the largest
operator of sugar, both in terms of Brazilian sugar production and export
sales, as well as global sugar trading.
As more land is planted as a monoculture of sugarcane, and control of the
industry becomes more concentrated, rural poverty increases. According to
Melo of the CPT, "Monoculture has created a huge dependency on the
sugarcane economy in the [Pernambuco] region, and impedes the creation of
other forms of work and income. The monoculture of sugarcane also leads to
an increasing concentration of lands in the hands of the sugar mills.
"For about 15 years, there were 43 sugar mills and alcohol distilleries in
Pernambuco. Currently only 25 of these companies control practically all of
the land in the 43 municipalities of the sugarcane growing region of the
state ... In the last two decades, practically all of the small properties
in the region have disappeared, with the forced destruction of the sites,
and the expulsion of the workers to the periphery of the 43 municipalities
of the sugarcane region and to the larger cities of the neighboring
metropolitan region. In this same period, about 150,000 jobs were lost when
18 companies closed and the lands and sugarcane processing was concentrated
in the 25 sugar mills and distilleries that remain ... This has provoked a
generalized 'slumming' of the workers, which has aggravated hunger."
Economic Boom or Environmental Bust?
Industry, government, and mainstream media in Brazil generally argue that
increasing ethanol exports will boost economic growth and sustainable rural
development, while simultaneously helping to curb global warming by helping
the world reduce its dependency on fossil fuels.
But contrary to the "green" image evoked by industry advocates, the
monoculture of sugarcane leads to massive environmental destruction.
According to Melo, in Pernambuco only 2.5% of the original forest of the
sugarcane region remains. In order to satisfy future global demand, Brazil
will need to clear an additional 148 million acres of forest, says Eric
Holt-Gimenez of the NGO FoodFirst, based in Oakland, CA.
The damaging environmental effects of monocropping sugarcane are, in the
S�o Paulo banker's mind, the most troubling aspect of the sugar-ethanol
industry. He claims that the sugar takeover is "pushing other crops to the
He explains that, "because sugarcane generates a high price per hectare,
the regions with better climactic conditions are dominated by this crop,
which results in sugarcane occupying lands that before were planted to
grains and used for grazing livestock. Grain producers move to more remote
regions, such as the center-west, which before were used for cattle. The
result of this flux is that cattle ranchers seek new areas such as the
Resisting Changes in Land Use
As the expanding ethanol industry spreads rural poverty and loss of rural
livelihoods due to increased land concentration and environmental
destruction, the number and intensity of agrarian conflicts has risen.
Brazil has one of the highest rates of income and land inequality in the
world, and a well-articulated and organized agrarian reform movement of the
rural poor. This has created a smoldering socio-economic fire that could
very well be ignited with ethanol.
On Feb. 19 the Movement of Landless Rural Workers (MST) and the Central
Union of Workers (CUT) organized about 2,000 MST members and rural workers
to non-violently occupy 12 plantations totaling 15,600 hectares in nine
municipalities of S�o Paulo state. According to the newspaper O Estado de
S�o Paulo, "MST leader Jos� Rainha J�nior said the objectives of the
occupations are to force the government to acknowledge the emergency need
for agrarian reform, and to call attention to the social problems resulting
from the expansion of sugarcane in the state."
Melo reports that in 2005, Pernambuco registered 194 conflicts over land--a
rate higher than the previous five years. She also reports that in the same
year a general strike by sugarcane workers was violently repressed.
"The employed and unemployed workers who struggle for agrarian reform are
constantly threatened and coerced by the landowning companies and by the
police at their service," she says. CPT data shows 60 labor conflicts for
2005 alone, while between 2000 and 2004 the highest number of labor
conflicts was nine.
As the Lula administration proceeds full-speed ahead with ethanol export as
a model for economic development, it is turning its back on the millions of
Brazilians who voted for the Workers' Party based on its promises to
implement real social and economic changes, especially agrarian reform.
According to Melo, "The Lula government has strengthened the historical
cane-production model imposed on the country based on monoculture, and
concentrated landholdings and large companies. He has not shown any
interest in creating alternatives to this perverse model."
Can there be viable economic alternatives to sugarcane monocropping? " Our
evaluation is that the government needs to combat hunger," says Mendon�a.
"The government wants to become a factory to supply rich countries with
cheap energy. This is compromising agrarian reform and food production."
What the social movements, many NGOs, and other organizations agree on is
that Brazil needs to incorporate the concepts of food sovereignty into its
development policy, prioritizing the land to produce food for Brazilians.
Food sovereignty includes both the obligation of governments to ensure that
their populations have access to nutritious foods in adequate quantities,
and the right of people and countries to define their own agrarian
policies, and produce foods destined to feed their populations before
producing for export.
But food sovereignty will be unattainable without a comprehensive agrarian
reform to keep family farmers on the land, producing and distributing
healthy food to local populations. As it is currently developing, the
Brazilian ethanol industry represents a direct challenge to food
sovereignty and agrarian reform. Ethanol production to sustain the enormous
consumption levels of the Global North will not lead the Brazilian
countryside out of poverty or help attain food sovereignty for its
[Isabella Kenfield is a freelance journalist based in Brazil and a
contributor to the IRC Americas Program www.americaspolicy.org.]
For More Information
Acci�n por la Biodiversidad
Accion Ecol�gica (Ecuador)
Centro de Pol�ticas P�blicas para el Socialismo (CEPPAS) (Argentina)
Investigaciones Sociales (BASE) (Paraguay)
Pastoral Land Commission (Brasil)
Red de Accion en Plaguicidas e Alternativas de Am�rica Latina (RAP-AL)
(Network against Pesticides)
Rede Social (Brasil)
Secci�n Latinoamericana de Pesticide Action Network (PAN)
Terra de Direitos (Brasil)
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