July 20, 2007

 

UN report says Brazil's ethanol policy negatively impacts soyoil supply

 

 

Brazil's biofuels, of which contains 80 percent is derived from soyoil, would have a negative impact on food production, a UN report said. 

 

The local Estado de Sao Paulo newspaper reported Thursday (Jul 19) that a UN report, authored by Jean Ziegler of the Right to Food, will be presented before the General Assembly in New York City in September criticizing Brazil's ethanol policy.

 

Brazil President Luiz Inacio Lula da Silva has been trying to promote ethanol production worldwide. Brazil views ethanol's future as a viable international energy resource as a national concern. Brazil is currently a major ethanol exporter. If other nations were to join it in producing ethanol, it would mean long-term contracts for the country and make ethanol a traded commodity on international futures markets.

 

The UN report could lead to calls for further studies on ethanol before it gets recognized as a sustainable alternative to fossil fuels.

 

Lula has been persuading other countries to produce biofuels from oilseeds or sugarcane under the belief that such initiatives would bring income to poor farmers. Brazil currently provides tax breaks to biofuel makers who buy oilseeds from poor farmers.

 

However, soy is mostly managed by middle and upper class farmers throughout the south and center-west. The same holds for sugarcane, which is mostly in the hands of wealthy families from Sao Paulo.

 

Lula has countered arguments that Brazil's ethanol policy has caused food prices to rise, instead he points the finger squarely at rising oil prices.

 

Venezuela, along with a few other Latin American countries, have criticised the policy as it makes food prices more expensive. They cited the example of the US use of corn for ethanol, which in turn led to higher corn prices worldwide.

 

Substandard labour conditions at Brazil's sugarcane farms have also prompted complaints from other countries, and the government has been fending off attempts to get the EU to ban Brazilian sugarcane and ethanol.

 

Next year, the government will require ethanol exporters to be certified before being allowed to export.

 

The UN report said that even though ethanol production has not led to higher sugar prices at the moment, sugarcane expansion to produce ethanol is taking up land that could be used for grains. In Brazil, many new sugarcane plantation investments are dedicated to grow the crop just for fuel and not for sugar.