Brazilian Biofuels Programmes from the WEL Nexus Perspective

More documents

Recommendations

Info

Brazil’s biofuel programmes viewed from the WEL-nexus perspective4 Whether water availability constitutes a limit to the projected expansion of agro-energycrops.Finally, with regard to the Energy dimension, our analyses are based on Coelho et al. (2006)and Macedo et al. (2008) for sugarcane-based ethanol, and on Rathmann et al. (2011) andGazzoni et al. (2006) for soy-based bio-diesel.4.1 LandThe dynamics of land prices with the profitability of agro-energy cropsThe analysis of the dynamics of land use starts with the comparison between different periods,namely 1990/2000/2010, based on Municipal Agricultural Production data compiled by theBrazilian Institute for Geography and Statistics (IBGE) for sugar cane and soybeans (Lima andTeixeira, 2010; IGBE, 2011). The aim is to determine whether the further development ofbiofuel programmes in Brazil, based on these farm products, has intensified the allocation offarming areas to such crops.The evolution of the areas under soy production (Figure 4.1) shows that the Mid-west isconsolidating its position as the main producer. A greater concentration of production in allproducing states is observed, especially in Mato Grosso, in the western region of Bahia, and inTocantins, Piauí and Maranhão. In addition, there is a new agricultural frontier in the state ofPará.This greater concentration in Mato Grosso is influenced, among other factors, by (a) theevolution of soybeans prices in the international market; (b) the availability of land at lowerprices than in other producing states, such as Rio Grande do Sul and Paraná; and (c) theconsolidation of a regional bio-diesel production complex (MAPA, 2011).In relation to the bio-diesel production complex, 21 of the 67 bio-diesel plants are installed inMato Grosso and account for 22% of the total production capacity authorised by the NationalAgency for Oil, Natural Gas and Biofuels (ANP, 2011b). The option to situate the productionbase close to supply (soy) reduces logistics costs. This factor has also influenced the decisionof investors to close down plants located in regions where there is no guaranteed large-scalesupply of oilseeds (Rathmann et al., 2011).Figure 4.1 Evolution of the soybean area harvested in Brazil (1990/2000/2010)Soybean AreaHarvested -HectaresSource: IBGE, 2011.20
Brazil’s biofuel programmes viewed from the WEL-nexus perspectiveWith regard to the evolution of sugar cane production, the state of São Paulo is increasing itsparticipation in the national output (Figure 4.2). Moreover, its production is becoming far moreconcentrated, which also occurs in the North-East coastal area (a traditional sugar-producingregion); in the region of Campos (Rio de Janeiro) and the ‘Triângulo Mineiro’ (Minas Gerais);and in expansion areas, such as the states of Goiás and Mato Grosso do Sul.The growth and concentration of sugar cane production are related both to the furtherdevelopment of ethanol production and to the increase in sugar prices in the internationalmarket. As previously mentioned, ethanol production has more than doubled since theintroduction of flex-fuel vehicles. Also, since 2003, the price of a 50kg bag of sugar hasincreased by about 250% in the international market (IEA, 2011a).Figure 4.2 Evolution of the sugar cane area harvested in Brazil, 1990/2000/2010Area Harvested-HectaresSource: IBGE, 2011.In view of the growing incorporation of land for the production of sugar cane and soy in Brazil,especially in the states of São Paulo (SP) and Mato Grosso (MT), it is plausible to formulate thehypothesis that this has made land scarcer, causing a rise in market prices.In order to test this hypothesis, price series for land in these states were obtained from theInternational Energy Agency (IEA, 2011a) and FGV Dados (2011). In the case of SP, based onthe agro-climatic zones for the sugar and alcohol sector, the representative municipalities ofAraçatuba, Presidente Prudente, Ribeirão Preto and São José do Rio Preto were chosen as thesample (Governo de São Paulo, 2011), for which annual series of land prices between 1996and 2010 were obtained; from these were derived average prices for land suitable for sugarcane in SP. In the case of MT, half-yearly series between 2002 and 2010 were obtained forland prices in the municipalities of Campo Verde, Canarana, Diamantino, Sapezal and Sorriso(IMEA, 2011); these were later annualised.In SP there are four categories of land used for cultivation (IEA, 2011b):1 First-class cropland: potentially suitable for annual and perennial crops, and for otheruses. It supports intensive management both in terms of cultivation practices and soil21
Page 1: EURO PEA N R EPO R TONDEVELOPMENTBr
Page 5 and 6: Brazil’s biofuel programmes viewe
Page 19: Brazil’s biofuel programmes viewe

Brazilian Biofuels Programmes from the WEL Nexus Perspective

Create successful ePaper yourself

Delete template?

Save as template?