The View From Brazil: Biofuels Are Not a Problem
The food-vs.-fuel debate rings hollow since Brazilians say they have the capacity to produce both
Reader Comments
The Brazilian People
Ann of IL, I assume that your comment about damage to forestry is in reference to the Amazon. With regard to sugar at least, here in Brazil this is a non-issue. Sugar is grown in the south of Brazil and the Amazonian climate & soil is unsuited to efficiently growing sugar. As the article mentions, there are still huge amounts of undeveloped arable land(outside of the Amazon) in Brazil.
For the common people. ethanol is a godsend. Gasoline prices in Brazil are very high(R$2.60 per litre or about US$5.65 gallon) while ethanol is far more affordable(R$1.20 per litre or about US$2.60 per gallon). Even with only 70% of the mpg rate, this is still an equivalent of US$3.70 gallon for ethanol to go the equivalent distance so about US$2 a gallon cheaper than gasoline. Without ethanol, gasoline demand would also be much higher & therefore prices would be even worse.
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how electricity is being generated in concert with ethanol processing
I am not familiar enough with ethanol processing to give all the details, but basically bagasse (fibrous material left after sugar extraction) is dried and burned as boiler fuel. Once the process begins, enough bagasse is produced to not only fuel the sugar mill but also to return power to the grid. The San Martinho plant in SP state also sells bagasse to an orange juice concentrating plant nearby.
I think carbon emissions should be basically neutral because carbon released by burning bagasse is equal to that removed from the atmosphere during cane growing cycle.
Reply to Almir R. Americo
You somewhat derogatory and unncessary comments about the U.S. and E.U. aside, you made some very good points in your comments.
Would you please give a little more detail as to how electricity is being generated in concert with ethanol processing? I was only vaguley aware that was possible.
Also, would you please offer thoughts on why oil importing countries other than the U.S and E.U. nations aren't snapping up all of the ethanol Brazil has to export? It seems to me that the non-tariff countries should benefit from market protection in the U.S. and E.U.
Ethanol tariffs in the U.S. ad E.U. have more to do with stimulating the home based biofuels industries so that dependence on foreign oil isn't traded for dependence of foreign ethanol and less to do with appeasing farmers.
If you look deeply, I think you will find many American and European agriculture companies and individual farmers are heavily involved in Brazil's agriculture expansion.
bio-fuel and food prices
This note intends to enrich the discussion centered on the ongoing commodity price spike pummeling isolated rural and urban families and as a contribution to the discussions inspiring the ongoing Food Summit.
The Food Chain: World's Poor Pay Price as Crop Research Is Cut by Keith Bradsher and Andrew Martin (NYT, 5/18/08) succinctly links the drop in research funding to the plight of low income families and skyrocketing commodity prices around the world. This note supports the thesis proposed by Bradsher and Martin, and extends the discussion beyond their envelope.
Low yields cause poverty. During the past years, yield improvement trend began to flatten out. Any program seeking to functionally address the damage done to emerging societies by this price surge, must address the reasons leveling the increases in productivity. In emerging societies, agricultural research and development (R&D) were almost abandoned. Absent improved productivity (and its expression, competitiveness), the farmers suffered from global policy vagaries. The US official donor community, for example, strongly supports solutions based on market forces, even when the US polity itself may not practice them (i.e. 2008 Farm Bill and energy subsidies, food aid in kind, US Central Bank bail outs, monopolistic maritime conferences).
Agricultural credit and technological outreach to farmers (the last mile) suffered deeper cuts than R&D. Bad policies canceled R&D findings—expensive research did not find cost effective channels to bring improvements to farmers, breakthroughs through molecular genetics (e.g., GMOs) were discouraged, and patents continued to be protected by legal principles which might have been valid in a relatively slow change, long gone past but disruptive in the knowledge driven, fast paced 21st. century. In the presence of bad policies, additional funding seldom yields expected results. And in most cases, they didn’t and funding, already compromised by rising demands of the post-Berlin wall globalization, financed other priorities.
Fortunately, the CGIAR international agricultural network (and the image from the green revolution) preserved funding through well articulate dialogue with donors and specialized bodies (e.g. Washington based IFPRI) centered on measuring results and advocacy. USAID, EU and Japan, for example, overcoming severe budgetary constraints, managed to keep funding, the CGIAR and, in the case of the seriously under budgeted USAID, the US Title XII universities and colleges and their agricultural centers of excellence.
Most local and national research centers in emerging economies were not so fortunate, especially in Sub-Saharan Africa. The judgment against them was out: they could not do it. Yet, many continued to shine (e.g., Brazil ( EMBRAPA), India, Malaysia, and centers like FHIA (musaceas) and Zamorano, an agricultural training center of excellence (both based in Honduras) or CATIE in Costa Rica). In SSA, new rice varieties combining African and Asian traits, are beginning to cause major changes (e.g. Uganda) and donors, like MCC, expand the only truly green revolution in the continent, in Mali’s irrigated plains (with rice yields averaging six metric tons/ha). The World Bank and USAID have funded the technology (e.g. tissue culture facilities) fueling the transformation in Ghana of small holder agro exports, and thus, improving their family income and effective demand for local food supplies. These isolated efforts demonstrate the proven potential of these centers to make major contributions to solve the food crisis endemic in many countries and exacerbated today by a combination of mutually reinforcing global synergies. By and large, in an era defined by just in time learning, the knowledge generators and knowledge sharing organizations serving the isolated rural population went unfunded. These national and regional research and training centers should rank high in any funding agenda. History proves, however, that their weak voice frequently goes unheard either in the global fora or their own capitals. History also often validated the lack of political will in many of these centers to improve their management and accountability. The victims caused by this neglect: the rural isolated farm family and the growing poor urban populations (usually yesterday’s rural poor).
Opposition to reorganizing the efficiency of food aid is another lingering decision resulting from the systemic bias hurting the isolated rural. But man is a crisis driven animal; necessity is the mother of invention. In particular, the starving poor may move nations like the US to launch more efficient solutions in the delivery of needed assistance following approaches that bring food to the starving, encourage rural development, nurtures rural entrepreneurship, and save scarce funds. In Haiti, one of my USAID projects produced a bumper bean harvest (usual formula: improved seeds, inputs, cultural practices, good management). The EU bought all the output for their food program. Farmers’ revenue improved, and the poor consumed desperately needed proteins. To move from food aid in kind to food aid in cash, at least as a proportion of the total allocated to feed the hungry (as proposed by the current US Administration and rejected by the US Congress when the requested $100 million to fund this “pilot” and other rural development initiatives was excluded from the US Budget Supplemental) may be the right step in the immediate future. With tight transportation capacity and rewarding agricultural prices (shipping and farmers being the two major opponents to this change) perhaps those who have so much might allow this innovation to benefit those who, through no fault of their own, have so little. Or perhaps the US voter might have a say on the decision.
There are reasons to be optimistic, and to expect necessity to bring around a better world. Powerful and smart players (e.g. Gates and Rockefeller Foundations funding for highly innovative AGRA), have already renewed their commitment to broad based agricultural solutions driven by state of the art technology, organization and advocacy. More rigorous measurement of results to guide performance, and more transparent competition for research grants, both anathemas to researchers in the past, are beginning to shape the R&D establishment.
Ideally, past mistakes and lessons learned will guide future programs. These include country commitment, ownership and capacity (e.g. sound policy framework— distorting subsidies from the wealthy have caused major harm, but one cannot forget that the low funding priority assigned to agricultural programs by governments in the poorer nations have also contributed to today’s global hunger), rigorous monitoring and evaluations, last mile to producers, reinforcing small and medium agribusiness enterprises in inputs (e.g. certified seeds) and value adding services, marketing and processing, public and private infrastructure, and innovative credit and investment flows.
These interventions could command a hefty assistance budget. Or they could be prioritized, reinforced strategically, engage the private sector across the broad spectrum, and do more with less (e.g. Cash transfers vs. commodity grants). Given the opportunity, the poor do a lot by themselves. Let public and quasi-public goods receive initial priority, with support to vital elements (e.g. small and medium rural enterprises) complementing the priority set. Be wary of bureaucracies anywhere—they can gobble up resources faster than they can be awarded. Agricultural prices tend to follow a cobweb pattern—high today, low tomorrow. Programs discounting tomorrow’s prices at high levels may fail. A key principle: if the funding is not clearly connected with the eradication of hunger and poverty, its reason should be questioned. Should this principle, at least in the context of this hunger crisis, override the golden rule of market fundamentalists: the internal rate of return on investments?
Policies can enable or thwart success. Among those policies most often questioned, subsidies granted to OECD farmers and agribusinesses (roughly a billion a day) have earned systematic criticism (w/o discernible effects). DOHA negotiations may crash this year against the subsidy shoals. These subsidies may have, coincidentally, a more insidious effect by masking other policies. Aren’t the monetary policies followed by those countries more to the point in the current food pain? Observers (e.g. influential analysts in the IMF) have noted the dollar devaluation since 2002 may have increased oil cost by $25 a barrel and other commodities by close to 12 percent. And the oil fever has pushed food prices in an upward spiral.
Emotional discussions may trump reasoned discourse. And that may affect the future of a valid energy option: biofuels. Not all biofuels are created equal. Increased demand for biofuels benefit farmers and agribusinesses alike, stimulate local and national economies, strengthens global peace, and can reduce the CO2 footprint. But a good idea may have a bad implementation. Corn ethanol is a bad implementation.
In contrast, sugar cane, and probably sweet sorghum, may efficiently diversify fuel sources and reduce environmental damage. Research on cellulosic and so called second generation feedstock should continue to be funded, and not ignored in response to the on-going debate. [Wouldn’t it be Pollyannaish to expect bio-fuels to drastically reduce, by themselves, the pressure on energy prices? Doesn’t the energy rate of return conspire against them (e.g. corn: one unit of energy to produce 1.3 units, transportation costs excluded). Biofuels can become a more or less important element in an overall national energy strategy (e.g. Brazil). This strategy may include incentives to reduce consumption in energy-fat societies (e.g. 60 MPH speed limit, energy taxes), the nuclear option, and R&D on other alterative energies funded (a potentially disturbing trend: investments in solar and wind may be decreasing, and corporate giants like Shell and BP have pulled out of major alternative energy projects).]
Another good idea with questionable results may be the temptation to throw money and commodities, the quicker the better, to the current food crisis. Funds must be disbursed quickly (good idea), but shouldn’t they also pursue smart programs (good implementation)? If additional funds were awarded without clearly established accountability and objectives, urgently needed assistance may lead, disappointingly, to outcomes which justified the skepticism that drove agricultural funding to less than three percent of total OECD assistance.
There must be a quid pro quo. Wealthier countries can and should assist the agricultural renaissance of the rural farm families in those countries left behind by globalization. Why? It makes sound economic and social sense. Today’s charity builds tomorrow’s markets. But shouldn’t the taxpayers funding this assistance require something in exchange from organizations receiving additional grants? Could they expect commitments to embrace real and measurable improvements in their management, efficiency and transparency? Without the latter, shouldn’t those taxpayers (and their elected officials) fear that their tax payments might be wasted, the wrong projects funded (e.g. corn ethanol instead of sweet sorghum, research on esoteric genetic expressions instead of on controlling pests destroying rice fields)? Should taxpayer worry that at the end of the “urgency” cycle the poor will continue to be isolated and eventually ignored? And since people refuse to die, what will they do?
Let’s hope the discussions surrounding the FAO meetings being held in Rome shed some lights on this complex suit of issues, and provide arguments voters can understand and believe in order to fix a broken global food security system. The rewards from a “fixed” system: a prosperous, peaceful and healthier planet. Or….
Felipe P. Manteiga is a former Director (2000-2002), Agriculture and Food Security, Global Bureau, USAID and Managing Director, Agriculture and Rural Economy, MCC (2004-2005), MCC. Mr. Manteiga joined USAID in 1975.
Brazilian ethanol
I will take this opportunity to add some useful words about bio-fuels. As rising food prices continue to threaten food security around the world, Brazilian ethanol is an obvious solution, but unfortunately it's being largely ignored. Brazil started to create this real fuel alternative since the first oil crisis hit the world in the 70s. Now more than 90% of new cars sold in the country are powered by ethanol or gasoline mixed in any proportion. Ethanol's internal consumption is already superior to gasoline's.
Brazilian ethanol is produced from sugarcane without any governmental subsidies and the fuel has a very competitive price. Researchers are increasing the productivity of ethanol year after year (more fuel extracted per square kilometer of sugarcane crops). They adapted sugar canes species to each type of land and topography so the productivity now is more than 3 times the records of 30 years ago. And the productivity keeps on rising and is expected to soar very soon when the technology to extract ethanol from cellulosic materials (crop waste) will be available for large scale production. Brazil could expand its sugarcane fields without disturbing sensitive land areas by tapping land such as depleted pastures. Just raising intensity of cattle production from the current 0.8 animals per hectare to 1.2 animals (a target already far exceeded in many parts of the country) would release about 80m hectares of land for crops. There remains plenty of room for expansion: the country has about 7m hectares of land under sugarcane, of which about 3m hectares is used for ethanol, compared to 200m hectares of pasture, about 21m hectares of soya and 14m hectares of maize.
And a more persuasive fact for incentive ethanol production in Brazil is the electric energy that is generated as a by-product of ethanol processing: taking into consideration the energetic balance, the electricity generated in sugar cane processing in Brazil is almost as large as its fuel equivalent. It's like a two large scale hydroelectric plants generating electricity exactly when it's more necessary: in the Brazilian dry season! So the Brazilian producers of ethanol are also having soaring revenues by selling electricity to the country's national electric system! It's become an strategic source of electricity, so it's a win-win game for the country and for the farmers.
Off course Brazilian ethanol would never concur with petroleum, but it could ease the current oil crisis by supplying a small part of the world energy demand. It could be an good alternative to the highly non-efficient corn based American ethanol. The problem is that much of Brazil’s ethanol exports continues to face prohibitive tariffs and other barriers to developed markets in the US and Europe. America keep its market closed to alternative fuels at the same time blames the world for not supplying then with more tax-free oil. The developed world appears purposely myopic in relation to the opportunities Brazil presents, maybe it's because that would upset wealthy US and European farmers – a price apparently not worth paying.
