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Brazilian Biofuels Programmes from the WEL Nexus Perspective

Brazilian Biofuels Programmes from the WEL Nexus Perspective

Brazilian Biofuels Programmes from the WEL Nexus Perspective

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Brazil’s biofuel programmes viewed <strong>from</strong> <strong>the</strong> <strong>WEL</strong>-nexus perspectiveFigure 4.3 Evolution of land prices in preferential areas for sugarcane production in<strong>the</strong> State of São Paulo between 1996 and 2010 (R$/ha)Note: * resent value as of 1 August 2011.Source: The authors based on IEA, 2011b.In MT, arable land is classified as cropland, pastureland and rough land. The last twocategories have <strong>the</strong> same characteristics as <strong>the</strong> land found in SP, i.e. not very fertile, andunsuitable for cultivation in <strong>the</strong> short term; for that reason it is considered marginal land inrelation to soybean production. Moreover, in <strong>the</strong> case of MT, pastureland and rough land isgenerally found in water-scarce regions, while water is fundamental for growing soy, especiallyduring germination-emergence and flowering-formation of beans (EMBRAPA, 2011b). 7This aspect contributes to a lower correlation than that observed between <strong>the</strong> different typesof land for sugar cane production in SP, with <strong>the</strong> exception of rough land and pastureland(Figure 4.4). Even so, <strong>the</strong>re is a significant correlation between <strong>the</strong> three types of land until2006, when <strong>the</strong>re is an increasing gap between <strong>the</strong> prices of cropland and <strong>the</strong> o<strong>the</strong>r types.This occurs because of <strong>the</strong> increased production of bio-diesel, <strong>the</strong> concentration of farmland in<strong>the</strong> hands of few owners, and <strong>the</strong> rise in international soy prices (Gasques et al., 2008).Where soybean is allocated to <strong>the</strong> production of bio-diesel, <strong>the</strong>re is a significant growth in localdemand thanks to <strong>the</strong> start-up of bio-diesel plants in MT. In 2006 and 2007, seven plantsstarted up, with an annual production capacity of 113 million litres of bio-diesel; this required aproduction of 632,000 tons of soybeans per year, and a cropland area of approximately203,000 ha, that is, 4% of <strong>the</strong> total arable land in MT in 2007 (ANP, 2011b; CONAB, 2011).A significant impact on <strong>the</strong> price of cropland may also be attributed to <strong>the</strong> fact that 50% ofagricultural areas in MT are leased, and 20% of such properties are concentrated in <strong>the</strong> handsof large groups (IMEA, 2011). In <strong>the</strong> 2009/10 crop, <strong>the</strong> 20 largest soy-producing groups wereresponsible for <strong>the</strong> cultivation of 1.2 million ha of soybeans, that is, 20% of <strong>the</strong> total area of6.1 million ha planted (ibid.). In 2004, <strong>the</strong>se groups were cultivating 533,000 ha, which7 During <strong>the</strong> first period, both excess and shortage of water are harmful in terms of obtaining good uniformity in <strong>the</strong>plant population. Soy seed needs to absorb at least 50% of its weight in water to ensure good germination. In thisphase, <strong>the</strong> water content in <strong>the</strong> soil should not exceed 85% of <strong>the</strong> maximum water available, nor should it be below50%.23

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