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Brazil: Nature Cannot Absorb This Growth
(ethanol vs biodiversity)
Julio Godoy, IPS
One day, Lucio Flores, a Brazilian Terena Indian, was travelling by truck through the Amazons region alongside a local landowner. Looking at the dense tropical forest around, the landowner said, “Look at this, there is nothing here.”

A little further as they left the forest to cross a soybean plantation, the landowner exclaimed: “But here there is soy!” To him, forest was nothing, soy everything.

Flores narrated the story to a group of environmentalists, government representatives and journalists at a side session of the UN conference on biological diversity under way in Bonn.

For him, the story was a symbol of the opposed views dividing the business community and indigenous peoples. “For agro business, nature is nothing,” Flores said. “For us, it is all.”

In Brazil the opposites are particularly telling. It has the world’s largest environmental reserve — the Amazons region — and is at the same time the world’s largest producer of ethanol, the agro-fuel distilled from sugar cane, and the world’s second largest producer of soybean, after the U.S.

The rapid development of sugar cane and soybean over the last 30 years has led to deforestation of large sections of the Amazons region, leading environmentalists say.
(27 May 2008)

The sweet hereafter

Jan Rocha, The Guardian
Biofuels are now seen as polluting and as a threat to forests and food production. But Brazil is still pinning its hopes on becoming a big player in sustainable sugarcane ethanol and related technology.

Brazil’s ambitious plans for supplying the world with renewable sugarcane ethanol have been put on hold as criticism of biofuels escalates. Instead of being seen as a solution, biofuels have become the new villains of the energy scene and are now blamed for everything from hunger to climate change itself.

“A few years ago, we thought biofuels were heaven, but now we think they are hell,” says Anders Wijkman, an MEP from Sweden, which is the only European country that already imports Brazilian ethanol for its public transport system. “I think the truth is somewhere in between.”

Last year, Brazilian exports of ethanol fell by 14%. Work on two giant pipelines planned to carry ethanol from the canefields of Goias to the ports of Paranagua and São Sebastião has been suspended, and the question being raised is whether the bio-boom is over before it has begun. Are the big-name foreign investors such as George Soros and the pension funds, who were falling over themselves to buy up land in central Brazil to plant sugar cane, backing the wrong horse? Are biofuels really less sustainable and more polluting than fossil fuels?

The view from Brazil, which has vast space, a burgeoning economy and a growing population hungry for development, is very different from that in Europe. With oil at over $120 (£61) a barrel, they say the answer can only be “no”.
(28 May 2008)

The Effects of Ethanol on Texas Food and Feed
Texas A&M Food Policy Research
The key findings contained in this report are:
• The underlying force driving changes in the agricultural industry, along with the economy as a whole, is overall higher energy costs, evidenced by $100 per barrel oil.
• With rising energy costs, corn and other commodity prices would have to increase. Rising fertilizer costs led to a 3 million acre reduction in planted corn acres in the 2006-07 crop year. Higher production costs will continue to pressure acres.
• This research supports the hypothesis that corn prices have had little to do with rising food costs. Higher corn prices do have a small effect on some food items.
• Speculative fund activities in futures markets have led to more money in the markets and more volatility. Increased price volatility has encouraged wider trading limits. The end result has been the loss of the ability to use futures markets for price risk management due to the inability to finance margin requirements.
• The potential exists for even higher corn prices based on historical yield variability. Fewer corn acres planted in 2008 leave production susceptible to weather risks. Small yield reductions will result in even higher prices.
• The liveststock industry has borne the costs of higher corn prices. The structure of the industry has made it unable to pass costs on, either up or down the supply chain.
(10 April 2008)