Biofuels and Food Security in Brazil

Abstract

To reduce its oil import bill, the government of Brazil inaugurated a national bioethanol program (PROALCOOL) in 1975. An important direct effect of the program was the creation of huge domestic demand for its sugarcane market because sugarcane is the feedstock of bioethanol production, which has increased in Brazil since 1975. In the late 2000s the Brazilian government achieved the original policy target of PROALCOOL to reduce dependency of petroleum imports. The Brazilian bioethanol industry, including bioelectricity, is growing as one of the main energy industries in the Brazilian economy. While it is possible Brazil will expand sugarcane production to the Cerrado area, this may cause land-use change and environmental problems. Bioethanol and sugar are produced from sugarcane and the allocation rate for bioethanol and sugar is decided by the relationship between domestic bioethanol and sugar prices. Since 1990, more than half of Brazil’s harvested sugarcane has been for bioethanol use. Therefore, bioethanol and sugar production are competing by allocating sugarcane production. Soybean oil accounts for 71.7–90.9 % of the feedstock of Brazil’s biodiesel program, which the government has been promoting. Since 2005, production has increased rapidly; in 2012 the soybean oil use ratio in domestic soybean oil consumption increased to 32.2 %. This means the Brazilian biodiesel program has had an impact on global soybean and soybean products markets.