[ON AGROFUELS] Ethanol Divides Agribusiness in Brazil. By Mario Osava

BRAZIL: Ethanol Divides Agribusiness
By Mario Osava

Credit:IPS/Mario Osava

RIO VERDE, Brazil, Sep 8 (IPS/IFEJ) - The expansion of sugarcane farming to produce more ethanol in Brazil has run into unexpected resistance in Rio Verde, a prosperous town in the central state of Goiás, and it is coming from agribusiness leaders.

The local government, of the conservative Progressive Party, decided to impose a limit on sugarcane to 10 percent of the municipality's farmland. That represents 50,000 hectares, eight times the area already planted with sugarcane in Rio Verde, to supply an old distillery that produced fuel alcohol, or ethanol.

The measure, demanded by agribusiness leaders, was proposed by Mayor Paulo Roberto Cunha and approved unanimously by the municipal Council.

Sugarcane monoculture is "a green tsunami that is breaking the agribusiness productive chain" and causes "social tragedies" as well as environment problems if it is not controlled, Avelar Macedo, secretary of industry and commerce, and promoter of the restrictions, said in an interview.

The municipal law, in force since September 2005, also prohibits planting sugarcane less than 50 meters from water sources and burning sugarcane chaff within 20 kilometres of urban areas, near environmentally protected areas or near power lines or highways.

The union of local officials and business leaders defends the "diversified activities" that they say led to an average 30-percent economic growth in the municipality since 2001, according to the Commerce and Industry Association.

Rio Verde has a soybean oil industry, whose by-product, the bran, is used as cattle feed. Maize supplies more than 1,600 poultry and hog farms, which in turn supply Perdigão, a group that seven years ago set up the largest meat processing complex in Latin America and created 7,600 direct jobs, and 35,000 indirect jobs, according to Macedo.

Sorghum, beans, rice and cotton are other important products for the municipality, generating a broad market for tractors, machinery, and other farm inputs. Agroindustry has also fomented the production of containers -- metal, plastic and cardboard.

The result is a city of 136,000 people without obvious poverty -- nobody asking for money on the streets -- and many signs of prosperity, such as brisk commercial and banking activity on the main avenue. There are four university institutions, which draw students from nearby towns.

This agro-industrial chain, "which adds value locally," is threatened by the "euphoria for ethanol," said Macedo. The sugarcane industry does not benefit the population because it mainly offers temporary, low-paid work, and generally purchases its machinery and inputs from foreign suppliers, he explained.

Its expansion poses a threat because the farmers are "decapitalised" by low commodity prices and the unfavourable exchange on the dollar in the last few years, so they are more vulnerable to offers from sugarcane or ethanol producers to rent or buy their land, warned Macedo, who is himself a landowner and entrepreneur in the construction and tourism sectors.

Sugarcane could bring progress in the northern part of Goiás state, where there is an "economic vacuum", but the industry would rather take advantage of existing infrastructure in the south, where Rio Verde is located, he said.

The law that turned Rio Verde into a national reference point, taken as an example by dozens of other municipality governments worried about monoculture, is being challenged in court by the Goiás syndicate of alcohol manufacturers, SIFAEG.

The group charges that the law is unconstitutional because it violates private property rights and infringes on national jurisdiction.

The legal battle likely will last several years, agree both sides.

Sugarcane is grown on 290,000 to 300,000 hectares in Goiás, or just 0.8 percent of the state's territory, and with maximum expansion predicted to reach 2.0 percent, which is less than one-third of the area planted with soybeans, says SIFAEG president Igor Montenegro. In the next five years, 20 more distilleries could be added to the existing 18 in operation, "without threatening the grains".

That expansion would require a small portion of the "immense area that could be freed up" by a simple improvement in livestock management, which currently covers 57 percent of Goiás territory in "low-productivity pastures," he said.

Montenegro hopes to counteract the "unfounded hysteria" among economic sectors that have nothing to fear "if they are competitive and profitable." The sugarcane agro-industry, he assures, is the one that "offers most jobs in agribusiness. One million direct and six million indirect" across Brazil. And they are less and less temporary and more skilled jobs, with an increasingly mechanised harvest, he added.

In fact, it would not be necessary to deforest areas in order to expand cane fields or grain crops in Goiás, agrees Emiliano Godoi, agronomist and head of biodiversity and forests for the state's environment secretariat. But the tradition is "to open new pastureland" instead of recovering the degraded land, which is why sugarcane is pushing the agricultural frontier into the forests.

This is a threat to the Cerrado, the savannah of unique forests that cover a large part of central Brazil. It is a biome heavily affected by agricultural expansion but has received little attention in terms of knowledge about it and its conservation.

In Goiás, conservation areas make up just 4.9 percent of state territory, "which is very little, but five years ago it was just one percent," said Godoi. Furthermore, most municipalities fail to comply with legislation that requires maintaining at least 20 percent of land with its original, native vegetation intact.

But his concern about sugarcane is "more social than environmental." During the harvest season, May to November, the small towns receive a flood of cane cutters who come from distant parts of the country, and there is a rise in prostitution and unplanned pregnancies.

The burning of cane fields to facilitate cutting pollutes the air, which causes respiratory illnesses. The problems accumulate and overburden the services of city governments of limited resources, said Godoi.

The pollution from the burning in Goiás is more harmful than the air pollution in Sao Paulo state, Brazil's leading producer of sugar and alcohol, because the atmosphere of the Cerrado in these months is very dry and keeps the concentrated particulate material suspended longer, he said. In addition there is the particulate matter from the poor sanitation systems in most of the state's cities.

(*This story is part of a series of features on sustainable development by IPS-Inter Press Service and IFEJ-International Federation of Environmental Journalists.) (END/2007)
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Article originally available @ http://www.ipsnews.net/news.asp?idnews=39191