Monthly Newsletter - August 2008

Many of us are familiar with the source of table sugar: the sugarcane plant. Almost as soon as Europeans first set foot in the Americas, sugar became a key export back to Europe as people craved for more of its sweetness. Today, the immense popularity of sugar can be seen in the extensive range of consumer goods that are brimming with it - soft drinks; chocolate; candies; cakes; hamburgers - the list is endless. You’re probably eating sugar right now.

In Brazil however, there has been a recent surge in sugar cultivation not aimed at satisfying our sweet tooth. Demand for ethanol – a “biofuel” that can be derived from sugarcane – has swelled while significant investment in the development of the crop has been seen. Ninety percent of new motor vehicles manufactured in Brazil is fitted with a flexible engine that can run on any combination of petrol and ethanol, and gas stations across the country offer ethanol at a price up to 30 percent less than petrol.

Using biofuels has many benefits over fossil fuels. While burning oil and coal releases dangerous carbon dioxide that has been trapped underground for millions of years, growing plants to for biofuels cancels out a considerable amount of carbon dioxide emitted by the burning of biofuels. Despite this, criticisms have been voiced against replacing petrol with ethanol. The chief concern is that ethanol is just as harmful to the planet due to the oil burned during production. Moreover, the land used to grow crops for ethanol prevents farmers from producing food, forcing the recent trend of skyrocketing food prices. Washington think-tank, The International Food Policy Research Institute, attributes 30 percent of rising food prices to biofuels.

To a certain extent, these arguments are well founded where maize- and rapeseed oil -derived ethanol are concerned. Manufacturing fertilizer to grow maize or vegetables for production of one gallon of ethanol requires over a gallon of oil. Yet the U.S. government heavily subsidizes farmers who cultivate maize for ethanol production in an effort to “reduce [the U.S.] addiction to oil” and furthermore, places high tariffs on foreign ethanol to protect its domestic market. In addition, the U.S. has to import more food than ever as so much of its arable land is being converted for biofuels. The country is losing the ability to grow its own food, causing serious problems. Most disturbingly, as a result of lowered supply, grain prices in the developing world are being pushed to extreme heights, and people are being pushed deeper into poverty.

However, such arguments have no such weight when applied to the Brazilian case. Sugar grows naturally in Brazil and does not require fertilizer: the plant’s energy is derived from sunlight. Sugar is far more energy efficient than maize or rapeseed meaning that less space is required to produce an equivalent amount ethanol energy. These factors are only strengthened considering that the entire sugarcane plant is utilized when manufacturing ethanol, as opposed to just the cob of the corn. As far as food is concerned, sugar uses 7 hectares of agricultural land in Brazil compared to 200 hectares used for cattle ranching, much of this being on degraded pasture no longer suitable for grazing.

There still remain many problems with Brazilian ethanol production. The most notable is the poor living conditions and occasional death of those who toil to hack down fields of sugarcane. But increasing investment will ensure that this process is mechanized, a conversion that is already well underway. It should also be considered that sugarcane farming has an exemplary safety record when compared to other sectors of Brazilian industry, and that this is a universal problem that needs to be addressed. Another pressing concern is that sugar production pushes farmers further into the Amazon rainforest. In reality, the majority of sugar is grown thousands of miles away from the Amazon, being centered in the district of São Paulo and in the northeast. The most ambitious estimates suggest that the industry will grow to occupy a total of 3 percent of Brazil’s cultivatable land, and there are other rapidly expanding industries responsible for deforestation.

The tariffs of up to 30% that are currently placed on Brazilian ethanol imports appears to be misguided. Yet during a recent round of Doha talks concerning world trade, the US and Europe refused to reduce import duties, despite Brazilian protest. It is clear that these countries need to let go of unsustainable homegrown projects and consider developing the potential of ethanol in Brazil and throughout the tropical region; this could be an important step towards restoring the awesome capacity of the United States to produce its own food whilst reducing its dependence on fossil fuels.

by Simon Ross-Gill

Source:
The Economist
BBC News
Financial Times
The Independent

PAST NEWSLETTERS:

• Newsletter July 2008
• Newsletter June 2008
• Newsletter May 2008
• Newsletter April 2008
• Newsletter February 2008
• Newsletter January 2008