Ministry of Agriculture, Livestock and Food Supply - Embrapa

specifications for fuel alcohol are equally important. The objective is to prevent
national incentive programs for the domestic industry from imposing non-tariff
barriers to restrict their imports and hinder our sales abroad.
Another consideration in our external agenda is to work diligently to increase
business liquidity and fluidity in the biofuel market, which would require some
adaptation of the legislation and much networking with and among the private
production sector and the trade sector in Brazil and abroad.
Internally, an important challenge is developing a master plan for the
expansion of the sugar & alcohol industry. This plan should begin with the agroclimatic
zoning of sugarcane, which will serve both to plan and restrict the
settlement of new areas and to manage public policies focusing on traditional
sugarcane areas.
Other domestic challenges to the sugar & alcohol industry include the spatial
concentration of production and the lack of interest in achieving greater energy
efficiency on the part of producing units.
As regards spatial concentration, the State of São Paulo not only already
has approximately half its farmable lands dedicated to sugarcane, but also holds
the sugarcane expansion record in the country. Twenty-five of the 40 projects
currently being established are located in São Paulo, particularly in traditional
cattle raising areas in the western part of the state. Likewise in the State of Minas
Gerais, which has the highest sugarcane growth rates and where new projects
are being set up in the Triângulo Mineiro, practically as an extension of the standards
that prevail in the São Paulo production. Although it seems irreversible in Minas
Gerais, this concentration should be avoided in other new areas because, along
with verticalization, it tends to create serious socio-economic and environmental
problems, as well as to increase the sugarcane plantations' vulnerability to pests.
The alternative to concentration is directly related to another challenge: the
need for investments in transportation infrastructure in the country's hinterlands.
Despite its expressive growth, the sugar & alcohol production is still incipient in
the Center-West Region considering the prevalent regional topography, climatic
regularity, land cost and availability, and the example of the soybean performance
at present. In addition to the Center-West Region, the so-called Mid-North (which
includes the State of Tocantins, eastern Pará, and eastern and southern Maranhão
and Piauí), where the conditions are similar to those prevailing in the Center-
West's Cerrado, could also become a new production belt. This, however, would
depend on investments in infrastructure, which would be vital to transport the
sugar and alcohol productions to the ports of São Luís, MA and Fortaleza, CE.
Another important challenge is the industry's capacity to meet the growth
needs of the sugar & alcohol sector. Considering the demand growth estimates
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