Lt-Col A. Tack
06-12-2008, 09:58 PM
Analysis: Brazil's leader defends ethanol
by Carmen Gentile
Miami (UPI) Jun 11, 2008
Brazilian President Luiz Inacio Lula da Silva said the world's oil companies are behind the bad press regarding his country's ethanol sector, denying claims by some that the industry uses slave labor and is responsible for deforestation in the Amazon.
Da Silva, an ardent supporter of Brazilian ethanol, made defending the world's leading producer of the biofuel one of the focal points of his most recent national address.
"I believe the main attacks against biofuels come from oil companies," said the Brazilian president earlier this week.
"We are aware of the interests held by countries that don't produce ethanol, or produce ethanol from wheat or corn, which are not as competitive."
Hoping to dispel some of the anti-ethanol rhetoric regarding its environmental impact and the treatment of sugarcane cutters, da Silva noted that the cane processed into Brazil's sugar-based ethanol isn't grown anywhere near the Amazon and called "absurd" accusations that the industry was in part responsible for deforestation.
The one-time labor leader turned president also denied claims that the ethanol industry relies heavily on poorly paid sugarcane cutters who are sometimes forced to work for no pay as modern-day slaves.
However, human-rights groups have accused ethanol producers of treating their workforce like slaves and have called for the Brazilian government to exercise greater oversight of the industry.
This isn't the first time Brazil's growing ethanol industry has come under fire.
Last year, when Washington and Brasilia inked a deal to expand ethanol production in Latin America, Venezuelan President Hugo Chavez and Cuban leader Fidel Castro complained the deal in essence would reduce the amount of land used for food crops and rob the region's hungry of vital food supplies.
Da Silva rejected the comments, saying food production would not be affected by the effort to produce alternatives to petroleum, of which Venezuela is the largest producer in the region and counts the United States as its best customer.
"All South American countries and Africa can easily produce oil seeds for biodiesel, sugarcane for ethanol and food at the same time," he said, referring to Brazil's ambition to work with European nations to increase sugar production in Africa to promote ethanol production on that continent as well.
Brazil has been a world leader in alternative fuels since the 1970s, when Brazil's Pro-Ethanol Program subsidized sugar mills to produce extra product specifically for the production of the biofuel in the wake of the oil price spike experienced worldwide.
Today, Brazil is producing enough ethanol to meet its growing domestic needs, and, with the help of some foreign investment, one day could make the leap to becoming a major international vendor of alternative fuels, a bandwagon the Bush administration would like to join, considering the president's repeated pledge to reduce U.S. dependence on foreign oil.
However, analysts warn that closer alternative energy ties with the United States won't be easy, considering the much debated import tariffs on Brazilian ethanol and federal protection in the form of subsidies the U.S. corn-based ethanol industry enjoys.
"Lula (da Silva) is walking a very tricky road here, because his reputation comes from being a populist leader who instinctively distrusts multinational corporations, at least before he became president," Larry Birns, director of the Council on Hemispheric Affairs, told United Press International. "There can be constraints with becoming too chummy with the United States."
SpaceWar Link (http://www.energy-daily.com/reports/Analysis_Brazils_leader_defends_ethanol_999.html)
Bandeirante
06-13-2008, 10:21 PM
President Luiz Inácio Lula da Silva - UN food summit
03 June 2008
My friends, ladies and gentlemen,
We have come here to discuss solutions to the world's food security problem. Food security has always been one of my government's central concerns. In 2003, I launched the pioneering Zero Hunger program, which has allowed millions of extremely poor Brazilians to start eating three meals a day.
I have also made the fight against poverty a priority on Brazil's international agenda. I joined with other leaders of rich and poor countries in order to find enough resources to free a major share of humanity from the scourge of hunger and malnutrition.
Working with them, we developed creative ways to re-route money that now goes to weapons production or to the quest for exorbitant profits from financial speculation into more humanitarian goals, such as feeding hungry people.
We have made progress. For example, we have created a mechanism to meet the need for treating endemic diseases in the poorest countries.
Yet we have done little compared to the huge scale of this task. I remind you that every night more than 800 million people around the world go to sleep hungry. This is offensive, and an insult to humanity.
Despite all the technical work and the political efforts of some leaders, all kinds of resistance continues to be raised against innovative solutions.
We met at UN Headquarters in New York with 60 Heads of State and top representatives from over 100 countries, and approved a document that proposed measures that were both audacious and feasible.
Yet the meetings ended, the lights went out and it looks like people went back to their day-to-day habits. Hunger was forgotten, only to be remembered when it explodes like it has in recent weeks.
Let us foster no illusions. There will be no structural solution for world hunger as long as we are unable to direct resources into food production in poor countries, while also removing the unfair trade practices that characterize trade in agricultural goods.
The problem of hunger has intensified recently with major hikes in food prices.
In some countries, multitudes made desperate by food shortages have taken the streets to protest and demand that authorities take action.
We face a grave and delicate problem. To respond, we must understand its true causes.
We may take the particularly dramatic example of Haiti. That country, the poorest in the Americas, was once one of the Caribbean's major rice producers.
Even so, macro-economic policies imposed from abroad and focused solely on monetary policy, together with surpluses of highly subsidized food in other countries, meant that Haiti stopped planting its own rice, with tragic results of which we are all aware.
If we are to fully understand the true causes of today's food crisis, we must therefore clear away smokescreens raised by powerful lobbies who try to blame ethanol production for the recent inflation in food prices.
More than an over-simplification, this is an affront which does not stand up to a serious discussion. The truth is that the rising price of food does not have a single explanation.
It comes from a combination of factors: soaring oil prices, which affect the cost of fertilizers and freight; climate change; speculation in financial markets; falling world food stocks; growing food consumption in developing countries like China, India, Brazil and several others; and, above all, the maintenance of absurdly protectionist farm policies in rich countries.
Perhaps the greatest, and most welcome, novelty here is the fact that more people are eating.
The poor in China, India, Africa, the Caribbean and Latin America, including Brazil, are eating more. And this is very good.
The fact is that masses of new consumers are joining the marketplace.
Major countries considered poor in the past are developing fast, and thus improving the lives of their peoples. This important phenomenon is here to stay.
Another essential factor in rising food prices is high oil prices. It is curious that many speak about rising food prices but are silent about the impact of oil prices on the cost of food production.
It is as if one factor had nothing to do with the other. Yet any well-informed person knows this is not the case.
The figures are clear. In Brazil, for each grain of beans, rice, corn or soya, or for each litre of milk, oil is 30% of the final cost.
And that is Brazil, where oil is only 37% of our energy blend. In my country, over 46% of our energy comes from renewable sources such as sugar cane and hydroelectric plants. Even so, oil weighs heavily in the cost of farming in Brazil.
So I wonder: to what extent does the price of oil affect food production in other countries that depend on it much more than we do? Particularly as oil prices in recent years have leaped from 30 to over 130 dollars per barrel.
Measures must be taken. For that reason, Central American Heads of Government, in a meeting with Brazil, decided to ask the United Nations to call an urgent International Conference to discuss the matter.
My dear friends, ladies and gentlemen,
Another decisive factor behind rising food prices is the intolerable protectionism that fences in agriculture in rich countries, weakening and disorganizing production in other countries, particularly the poorest countries.
The so-called world food crisis is above all a crisis of distribution. We must produce more food and distribute it better. Brazil, as an agricultural power, is working to increase its own production.
But what good does it do to produce, when subsidies and protectionism undermine market access, mutilate income and make sustainable farming unfeasible?
Certain countries with enough resources to develop advanced technology have been able to make extraordinary gains in yields and thus overcome unjustifiable barriers and distortions created by the world's richest economies.
But what can we say of the poorer economies that fight to maintain their subsistence farmers in the midst of difficulties to assure financing, irrigation and inputs, such as in many African economies?
Subsidies create dependency, breakdown entire production systems and provoke hunger and poverty where there could be prosperity. It is high time to do away with them.
Overcoming today's hurdles depends on a successful conclusion, as soon as possible, of the WTO's Doha Round, with an agreement that will no longer treat agricultural trade as an exception to the rule, and that will allow the poorest countries to generate income with their own production and exports.
True food security must be global and based on cooperation. This has been Brazil's objective with its partners in the developing world, particularly in Africa, Central America and the Caribbean.
Expanding that kind of initiative can take great advantage of new partnerships that allow for triangular cooperation.
My dear friends,
Brazil has insisted on the tremendous potential of biofuels. They are decisive in the fight against global warming, and they can play an important role in the economic and social development of the poorest countries.
Biofuels generate income and jobs, especially in rural areas, while producing clean, renewable energy.
It is frightening, therefore, to see attempts to draw a cause-and-effect relationship between biofuels and the rise in food prices.
It is curious to observe such a few mention the negative impact of rising oil prices on food production and transportation prices.
Such behaviour is neither neutral nor unbiased. It offends me to see fingers pointed at clean energy from biofuels – fingers dirty with oil and coal.
I am desolated to see that many of those who blame ethanol - including ethanol from sugar cane - for the high price of food are the same ones who for decades have maintained protectionist policies to the detriment of farmers in poor countries and of consumers in the entire world.
Biofuels are not the villain menacing food security in poor countries. Quite the contrary, when cultivated responsibly, in harmony with each country's reality, they can be important tools to generate income and pull countries out of food and energy insecurity. Brazil is an example of this.
Brazil's production of sugar-cane ethanol covers a very small share of its arable land and does not reduce the area planted to food crops.
Just so no one will say I am quoting only Brazilian statistics, data from the United States Department of Agriculture's 2007 report on ethanol production in Brazil say that Brazil has 340 million hectares of arable land.
200 million are pasture land, and 63 million are planted to crops, of which 7 million to sugar cane. Half of this goes to sugar production and the other half, about 3.6 million hectares, go to the production of ethanol.
This means that sugar cane covers 2% of Brazil's farm land, and all of its ethanol comes from just 1% of that same total area.
Those who say ethanol production is moving sugar-cane plantations to invade food production areas have no basis at all for their criticism.
Since the 1970s, when we launched our ethanol program, the per-hectare yields of ethanol have more than doubled. Also, since 1990, our grain output grew by 142%, with an expansion of only 24% in the cultivated area.
Our grain production has therefore grown due to spectacular gains in yields. There is thus no basis for statements that the expansion of ethanol production comes at the expense of food production.
Ethanol and food production are both offspring of the same revolution that in recent decades has transformed Brazil's countryside, thanks to the inventiveness of our researchers and the entrepreneurial spirit of Brazilian farmers. That revolution made Brazil a worldwide reference for tropical-agriculture technology.
There are other critics who raise the senseless argument that Brazil's sugar-cane plantations are invading the Amazon. Anyone foolish enough to say that, knows nothing about Brazil.
The northern region, which includes almost the entirety of Brazil's Amazon rainforest, has only 21,000 hectares planted to sugar cane, that is, only 0.3% of all of Brazil's sugar-cane plantations. This means that 99.7% of the sugar cane is at least 2,000 kilometres from the Amazon rainforest.
Our sugar-cane plantations, in other words, are about as far away from the Amazon as the Vatican is from the Kremlin.
In addition, Brazil has another 77 million hectares of farmland - far from the Amazon - which are still unused.
That is an area a little larger than France and Germany together. And we still have another 40 million hectares in under-used, degraded pasture land, which could be recovered to plant food and sugar cane.
In short, sugar-cane ethanol in Brazil is not a threat to the Amazon, it does not take land out of food production, nor does it take food off the tables of Brazilians or other peoples in the world.
My friends, ladies and gentleman,
I am not in favour of producing ethanol from corn or other food crops. I doubt that anyone would go hungry, to fill up their car's fuel tank.
Meanwhile, corn ethanol can obviously only compete with sugar-cane ethanol when it is shot up with subsidies and shielded behind tariff barriers.
Sugar-cane ethanol yields 8.3 times more energy than the fossil energy used to produce it.
Corn ethanol, meanwhile, yields only 1.5 times the energy it consumes.
That is why some people compare ethanol to cholesterol. There is good ethanol and bad ethanol. Good ethanol helps clean up the planet and is competitive. Bad ethanol comes with the fat of subsidies.
Brazil's ethanol is competitive because we have technology, fertile land, abundant sun, water and competent farmers. And we are not alone. Most African, Latin American and Caribbean countries, in addition to some in Asia, enjoy similar conditions.
Through cooperation, technology transfer and open markets, they can successfully produce sugar-cane ethanol or biodiesel too, and generate jobs, income and progress for their peoples.
So this "Golden Revolution," combining land, sun, labour and high technology, can also happen in other developing countries. The African savannahs, for example, are very similar to Brazil's Cerrado plains, where very high crop yields are obtained.
My friends, ladies and gentlemen,
It is time for political and economic analysts to make a correct analysis of developing countries' capacity to help in food, energy and climate-change issues. Nearly 100 countries have a natural vocation to produce biofuels sustainably.
These countries will have to do their own studies and decide whether or not they can produce biofuels, and on how large a scale. They will need to decide which crops are the most appropriate and design their projects based on economic, social and environmental criteria.
These are important decisions that they will have to make on their own, rather than leaving them to other countries or organizations that often echo - even in good faith -interests of the oil industry or of farm interests hooked on subsidies and protectionism.
The world also needs to decide how to deal with the grave threat of global warming, which demands a firm and cohesive response from all of humanity.
At Kyoto, the world reacted maturely and responsibly. Unfortunately, a few countries refused to accept commitments to goals for reducing their carbon-dioxide emissions.
Nonetheless, Kyoto was a milestone. Humanity woke up to the need for strong and organized action to save the planet.
Unfortunately, it is easier to issue warnings than to change consumption habits and eliminate waste.
It is easier to blame others than to make necessary changes that harm vested interests.
It therefore seems that, recently, voices calling for cuts in carbon-dioxide emissions are getting weaker.
This is regrettable. We cannot be irresponsible to our children and grandchildren, to the planet's future. The world cannot go on burning fossil fuels at the pace it does today.
We did research in Brazil comparing CO2 emissions from an ethanol-fueled and a gasoline-fueled car, using the same model, the same engine, the same road and the same speed.
The car running on gasoline emitted 250 grams of CO2 per kilometre, 8.5 times more than the one running on ethanol.
When we compare diesel to biodiesel, we observe that trucks running on fossil fuel emit 5.3 times more carbon dioxide than others running on biodiesel.
In addition, the plants from which biofuels are extracted, as they grow, also sequester a major volume of carbon dioxide. Ethanol is not just a clean fuel. It is also a fuel that cleans the planet while it is being produced.
All these factors demand a serious, balanced discussion on biofuels and global warming. To this end, I am inviting authorities, scientists and representatives of civil society from all countries to an International Conference on Biofuels, to be held next November in São Paulo.
My friends, ladies and gentlemen,
Lowering the cost of energy and fertilizers and putting an end to intolerable farm subsidies in rich countries are the largest challenges facing us today.
Over these past 30 years, there has been a true silent revolution in agriculture in many countries, particularly in the tropics. That revolution can benefit all, rich and poor, indistinctly.
It can also provide tools, solutions and alternatives to meet the growth of demand from hundreds of millions of people.
The expansion of agriculture in developing countries like Brazil gives the problems a new scale. The routes and strategies to solve them have also changed.
In today's world, the prevailing vision of security focuses on guaranteeing control over territory, over food supply and over energy supply.
The subsidies to farm production and trade barriers, which have held back the growth of agriculture in poor countries, also arise from that vision.
It must be recognized that, if agriculture in developing countries had been stimulated by free markets, perhaps we would not be in this food crisis.
We must reformulate such visions and recycle ideas. We must work with notions of interdependence and collaboration.
I am certain that we can create a new concept of security for a world in which not only energy, but also ideologies will be renewable.
The globalization that took such a strong hold over industry must now move into agriculture.
As our Director-General Jacques Diouf has suggested, we must face this moment not as a crisis but rather as an opportunity. An opportunity to stimulate agriculture in all countries, and particularly in Africa.
I have always considered myself an optimist. I trust in humanity's capability to learn from new challenges and to create new solutions. It was so in the past, and I am convinced that it will be so now. We must simply avoid mistakes in our analysis of the problem and avoid taking any wrong turns in the path.
The solution does not lie in seeking protection or trying to hold back demand. The solution is to increase food supply, open markets and eliminate subsidies, in order to respond to the growth in demand. This will require a radical change in the ways we think and act.
Thank you very much.
http://www.brazil.org.uk/newsandmedia/speeches_files/20080603.html
Bandeirante
06-27-2008, 06:09 PM
Biofuels in Brazil
Lean, green and not mean
Jun 26th 2008 | RIBEIRÃO PRETO
From The Economist print edition
The United States may drop a tariff on Brazilian ethanol. But the industry is still the victim of much misplaced criticism
Eyevinehttp://media.economist.com/images/20080628/2608AM1.jpg
WHEN John McCain laid out his plans for reducing America’s dependence on oil to an audience in California on June 23rd, the candidate’s keenest listeners were 6,000 miles away in São Paulo. Mr McCain argued that the tariff on imported ethanol of 54 cents per gallon should be scrapped. Others in the Senate (though not Barack Obama) are pushing for it to be reduced. Either way, the case against the tariff has been strengthened by high oil prices and by the June floods that damaged the mid-western corn (maize) crop. That sent corn prices soaring and made subsidising corn to produce ethanol look like an even worse idea than it did before, given the greener, cheaper ethanol that the United States could buy from Brazil instead.
America’s thirst for ethanol is set to grow in line with targets in last year’s Energy Independence and Security Act. Brazil would like to sell more to Europe and Japan too. Yet just when it seems poised to reduce the world’s dependence on oil, its largely sugar-based ethanol industry stands accused of being less wonderful than it looks. Campaign groups lump it together with biofuels elsewhere, which they blame for raising food prices. Some environmentalists claim that Brazilian farmers have torn up forest to plant cane. Some media reports allege ill-treatment of farm workers. More prosaically, some American officials question how much ethanol Brazil can supply.
Take this last point first. Demand for ethanol is growing fast in Brazil because 90% of new cars have flex-fuel engines that can run on any mixture of petrol and ethanol. Even so, ethanol remains cheap. This is because producers have invested in expanding capacity (see chart), partly because they hope for export markets, but mainly because they reckon they must sell at a 30% discount to petrol to keep the custom of Brazilians. The price of petrol has not risen for three years because the government has opted to hold it down.
http://media.economist.com/images/20080628/CAM999.gif
This year Brazil hopes to export up to 3 billion litres of ethanol to the United States. But this market depends on the corn price being so high as to make it profitable to pay the import tariff. That was not the case last year and it may not be the case next year. Brazil could expand output much more, but will do so only when export markets are less unpredictable. That is because supplying them requires investment in pipelines and port equipment.
For those worried about climate change, Brazilian ethanol is worth buying only if it is as green as it claims to be. It is certainly much greener than its corn-based rival in America: it packs 8.2 times as much energy as is used in its production, compared with just 1.5 times for corn ethanol, according to the Woodrow Wilson Centre, a Washington think-tank. Some greens say that the spread of sugar is deforesting the Amazon. That is not true. The vast majority of the sugar crop is grown thousands of miles away from the forest, in São Paulo state or the north-east. Some 65% of new planting of sugar cane has been on land that was previously pasture; the rest was previously used for other crops, according to Conab, a government agency.
But might ethanol be indirectly responsible for lifting food prices and for pushing cattle ranchers into the Amazon? Such concerns look premature. Sugar cane occupies only 7m hectares (17m acres) of Brazil’s farmland (and only about half of the crop is distilled into ethanol). This compares with some 200m hectares devoted to cattle ranching, much of which is extensive (a Brazilian cow enjoys, on average, a lordly hectare of grazing). Sugar could expand on degraded pasture with little or no effect on beef prices.
Besides, the ethanol industry may be poised for a leap in productivity. “The sugar-cane plant is now where corn was at the beginning of the 20th century,” reckons Fernando Reinach, a biologist turned venture-capitalist at Votorantim, a conglomerate. His fund has backed two start-ups in Campinas in São Paulo state.
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One of them, CanaVialis, breeds better varieties. The other, Alellyx, alters the genes in the plant to give them new properties (one strain being tested gives about 80% more sucrose; another can go for 45 days without water). It is run by Paulo Arruda, a Brazilian who led a team of 200 people in sequencing the DNA for sugar cane. Across the road is Amyris, a Californian company which has developed enzymes that in laboratory experiments have turned sugar into substitutes for motor and jet fuel.
In this high-tech environment, it is easy to forget that the early part of the ethanol production line consists of labourers spending long days swinging machetes in hot fields of charred cane. The Brazilian labour ministry sometimes uncovers cases where workers are paid almost nothing and live in squalid conditions. Cane-cutting is back-breaking work, and every year some people die during the harvest.
Yet the sugar industry may be less deadly than many others. In 2005, of its 440,000 workers, 453 died; of these 17 (or one in 26,000) were killed in accidents, according to a study by Márcia de Moraes of the University of São Paulo. In the same year 2,900 of the 2.16m workers toiling in other branches of Brazilian farming died. Of them, 135 were killed in accidents, giving a higher accidental death rate of one in 16,000, even though the sugar harvest lasts much longer than that for any other crop.
In fact the most noticeable thing about cane-cutting labourers is how fast they are disappearing. At Santelisa Vale, a collection of mills in Ribeirão Preto whose owners include Goldman Sachs, an investment bank, 60% of cane-cutting is already mechanised. The remaining manual cane-cutters will go by 2012. The story is similar across São Paulo state. This may make for a safer industry, but it threatens to leave a large, unskilled workforce unemployed.
To Brazilians, outsiders who want to block their ethanol in the name of environmentalism or concern about food prices or labour conditions look like old-fashioned protectionists in hypocritical disguise. When addressing a United Nations food summit in Rome recently, President Luiz Inácio Lula da Silva said that he was fed up with “fingers soiled with oil and coal” being pointed at his country’s ethanol industry. Quite so: the tariff should go.
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