Production and use of fuel ethanol in Brazil - BAFF

A2. History of sugar-cane growing and
ethanol production in Brazil
A2.1.
What were the historical conditions in which the
sugar-cane agribusiness activities began in Brazil?
In colonial times, the Brazilian economy —at the whim of the Portuguese
metropolis— developed by cycles, according to the interests and vicissitudes of the
international market. First, we experienced the brazil wood cycle, followed by the
cane sugar cycle and, finally, the gold cycle. In colonial Brazil, each of these products
went through an expansion period and then a decline stage.
During the First Reign (1822-1831), the Regency (1831-1840) and the Second Reign
years (1840-1889), the sugar made in Brazil competed with that made in the Antilles
— from the sugar-cane brought by the Dutch following their expulsion from Brazil,
— as well as the beet sugar that had been produced on large scale in Europe since
the 17 th century. The heavy taxes imposed by the various governments on sugar
imports were then a strong hindrance to the trade.
The Oligarchic Republic (1889-1930) marked the peak and decline of the agricultural
export-based economy. In addition to coffee, which after a great expansion in the
first decades went through a severe crisis in the 1920’s, other products like rubber,
cocoa nuts and sugar also experienced expansion and decline cycles.
A2.2.
How did the sugar-cane agribusiness develop
over the following years?
The restructuring of Brazil’s sugar-cane agribusiness production — which
undoubtedly facilitated the modern industry that we have today — was initiated in
the early 1930’s and was only possible thanks to the State’s intense action over a
little longer than six decades of strong governmental intervention.
Starting in 1933, when the Sugar and Alcohol Institute (IAA) was created, the
Government took over a number of activities that back then determined the ways
of the sugar-cane agribusiness. The state’s intervention dominated practically all
of the industry’s structure, and was responsible for the production and marketing
cycle, including pricing, quotas, exportation and importation.
A. Fuel ethanol: Activities in Brazil and the world context
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