Brazil Says Ethanol Production Won't Harm Amazon

By THE ASSOCIATED PRESS
Published: November 17, 2008
Filed at 2:55 p.m. ET
SAO PAULO, Brazil (AP) -- Expansion of vast sugarcane plantations across Brazil to meet growing worldwide demand for ethanol won't harm the Amazon, a top Brazilian official said Monday.
Speaking at the start of a five-day international conference on biofuels, presidential chief of staff Dilma Rousseff said Brazil will soon unveil an agricultural zoning plan to specify where crops across Latin America's largest nation can be grown for fuel and food.
The Amazon and several other regions known for their wide range of plant and animal species are likely to be declared off limits. But Brazil will encourage expanded ethanol production elsewhere and in poor nations around the world that have temperate climates suitable for sugarcane.
''It's a socio-economic reality,'' Rousseff said. ''It generates jobs and income, mainly in tropical countries.''
Rousseff also said expansion of ethanol won't compete with production of food in Brazil, and that there's also room for other crops ranging from soy to corn.
Though sugarcane now carpets 4.2 million hectares (10.4 million acres) of Brazilian land, she said that is less than 1 percent of the nation's territory and that there's plenty of land available outside ecologically sensitive areas for more cane.
Rousseff said Brazil must strike down the ''myth that cane fields are invading the Amazon,'' but critics say sugarcane-ethanol plantations already operate in the Amazon, and that some plan to expand. They also say that conversion of pastureland and soy fields to sugarcane is pushing out soy farmers and cattle ranchers who then set up shop again on freshly deforested jungle.
Rousseff also said Brazil's government is ready to help big ethanol producers suffering from lack of credit because of the worldwide financial crisis.
Ethanol producers were among those eligible when the government recently announced billions of dollars in emergency lines of credit for Brazilian companies caught up in the credit crunch.
''More will be freed up if it's needed, but up until now that doesn't seem to be the case,'' she told reporters.
Foreign investors pumped billions of dollars into Brazilian ethanol operations over the last several years, but new investment all but dried up as the financial crisis spread across the world in October.
The sector took a hit last week when a major producer revealed that it had asked a court for protection from creditors while it restructures $100 million in debt.
Companhia Albertina said it will continue operating.
It appeared to be the first sign of major trouble for an ethanol producer since the credit crisis hit.
The international financial crisis could end up expanding production of biofuels, Rousseff predicted, if governments mulling big spending programs to jump start economies decide to focus on ethanol and other gasoline alternatives.
''The crisis may allow anti-cyclical policies that favor a a green agenda with biofuel as a priority,'' she said.
Brazil is the second only to the United States as an ethanol producer, and it is the planet's top exporter. Sugarcane-based ethanol is cheaper to produce than the corn-based ethanol made in the U.S.
Former Brazilian Agriculture Minister Roberto Rodrigues said last week that Brazilian ethanol will remain competitive with gasoline as long as oil is being sold for $40 or more per barrel. He said corn-based ethanol is competitive with oil at $50 or more a barrel.
Oil prices stood just above $58 per barrel Monday, down from a high of $147 in June.