Brazil economics

The biofuel dilemma

Saying that the recent global food shortages and the raise in inflation in the world happens because of biofuels production is "an exaggeration". This opinion is shared between Brazil's current president, Luiz Inácio Lula da Silva, and also by the former president of the country, Fernando Henrique Cardoso. The latter one considers that the crises comes from a sudden raise in the world demand for food. But he says he believes the crisis is temporary


By GABRIELA ZAGO
From Pelotas, BRAZIL


Biofuel production as an alternative for providing energy has recently started to be contested all over the world. One of the reasons is that it is a fuel produced out of elements that could be used for alimentation. In the center of the attacks, there's Brazil, a country that is the second largest producer of biofuels in the world (#1 is United States), even though it faces an historical problem of hunger and poverty. A simplistic reasoning leads to the inevitable question: how come they use food to produce fuel, and let millions of people to stay in hunger?

Brazil is the 5th largest country in the world, and has the 5th largest population, with 183.987.281 inhabitants (IBGE, 2007). Located in South America, it is, economically, only #8 in the world (according to the World Economic Outlook Database, from FMI). The country is the second largest producer of biofuels in the world, and the world's largest exporter. Brazil is also considered the first country to have a sustainable biofuels economy. The production is made from sugar cane. United States (#1 producer) and Brazil, together, account for 70% of the world's production of ethanol.

Recently, the United Nations Special Rapporteur on the Right to Food, Jean Ziegler, have blamed the transformation of food in biofuels, as well as financial speculation, of being the main reasons for the higher prices for food supplies. As he points out, biofuels could be considered a "crime against a part of the humanity", since the transformation of food in fuel led to basic products to have risen in price.

The general-secretary of Unctad (United Nations Conference on Trade and Development), Supachai Panitchpakdi, for instance, replied saying that biofuels are not the biggest villain in this history. For him, recent global food shortages are more a result of a bad infrastructure of distribution of agricultural products rather than the rise of the basic products caused by biofuels.

Saying that the recent global food shortages and the raise in inflation in the world happens because of biofuels production is "an exaggeration". This opinion is shared between Brazil's current president, Luiz Inácio Lula da Silva, and also by the former president of the country, Fernando Henrique Cardoso. The latter one considers that the crises comes from a sudden raise in the world demand for food. But he says he believes the crisis is temporary.

The situation is not exactly that bad. Yes, Brazil has a large production of "food" (sugar cane, for instance) to be converted in biofuel. But there's also a great agricultural production of food for human consumption, not to mention that there are still large portions of land underused in the country.

According to what Antonio Sergio Oliveira Santana, executive manager of Petrobras (a semi-public Brazilian energy company), said on May 7th at the first day of the Amsterdam Conference on Sustainability and Transparency, out of the 350 million hectares available for sugar cane cultivation in Brazil, only 75,6 million is currently in use. From those, 72 million are used for agriculture, and 3,6 million goes for the planting of raw material for the manufacture of biofuels.

In order to avoid future problems, the Ministry of Agriculture of Brazil is planning how to delimitate the areas suitable for planting sugar cane for biofuel from those areas to be used for food production. The separation would prevent the production for biofuels to grow disproportionately and end up overlapping the production of food.

Also, Brazilian biofuel is produced from sugar cane, which is something that is not essential in everyone's alimentation. It is different, for example, from North America's biofuel, produced from corn and soybeans, ingredients that are fundamental in many diets.

European Union plans to, until 2020, be using at least 10% of alternative fuels in all fuels. However, if exportation become more attractive for producers from countries like Brazil, there are concerns in the rest of the world that people will stop producing for alimentation, and start to produce food for fuel, which could led to an even worse high on prices for the same product as a food. That's why some segments are pressuring EU to reduce expectations and wait a little more time before getting to that rate.

What seems more important - finding alternatives for producing fuels, even though this means having to use food for that, or to using all agricultural resources to (try to) produce enough food for everyone and avoid all the (inevitable) possible hunger in the world?


(Published: 10.05.2008.)

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