Biofuels in Perspective

70 Biofuels
Table 4.4 Comparison between municipalities with and without sugar and ethanol production in state
of São Paulo, 2000
Parameter
Cities with sugarcane
activity
Cities with no
sugarcane activity
Number of municipalities 96 499
Population range (1000) 2.4 − 500 2.4 − 500
Average income (R$ 2000) x 1000 17,193 12,441
Income/habitant (R$ 2000) 1 308.7 ± 72.7 272.7 ± 85.2
Average Gini index 2 0.519 0.528
Share of total income of 20 % poorest 1 3.97 % ± 0.84 % 3.61 % ± 1.04 %
Share of households with electricity supply 99,6 % 98,8 %
Human development index (HDI) 1 0.80 ± 0.03 0.78 ± 0.03
Notes: 1 Average values ± standard deviation.
2 The Gini index is a measure of statistical dispersion and is commonly used as a measure of inequality of income
distribution. The index varies from 0 to 1, being 0 equivalent to perfectly equality and 1 to a hypothetical situation in
which just one person has all income.
It can be seen from Table 4.4. that, on average, sugarcane industry brings benefits to
the economy in cities where sugar and ethanol production occurs. As the analysis is based
on 2000 figures when sugarcane production was lower than now, current results should
be better. Despite better results regarding total income and income per capita, results
presented in Table 4.4 also show that wealth distribution is not significantly improved due
to the production of sugar and ethanol, as the Gini index is basically the same for both
groups of municipalities. In 2000 the average Gini index for Brazil was 0.561 and 0.525
for the state of São Paulo; 33 Brazil has one of the highest Gini coefficients in the world.
The Gini coefficient of the sugarcane and ethanol production sector is lower compared to
the national average and compared to various other economic sectors. 21
Also from Table 4.4 it can be observed that living conditions are slightly better for
the set of municipalities in which sugarcane industry exist, a conclusion based on better
results for the share of households with access to electricity supply and on the Human
Development Index (HDI). As a matter of comparison, it should be noticed that theses
indexes correspond to, respectively, 86.6 % and 0.699 in Brazil, and 98.9 % and 0.779 in
the state of São Paulo.
The production of sugarcane/ethanol is an important source of employment in Brazil,
both directly and indirectly related with the activity. Formal direct jobs were estimated as
about 750 thousand in 2002, being almost 50 % related to sugarcane production. 21 The
current number of total jobs (permanent + temporary) is estimated as 1.3 million, being
about 500,000 in the state of São Paulo. As of 2003, employees in the formal sector (those
who possess formal working papers) were 59 %, being 85 % in São Paulo. 21,24 This figure
is significantly larger than the figure for the whole Brazilian economy.
Another important figure to mention is that the average wages received by workers in
the sugarcane production in late 1990s, in the state of São Paulo, were 80 % higher than
those received by workers involved with other crops. Workers in the sugarcane production
received at that time wages 40–50 % higher than workers in the service and in the industry
sector, as long as the comparison is done for people with the same skills. 21 Despite these