Labor, Environment Issues Could Hurt Brazil Ethanol - Government
SAO PAULO -(Dow Jones)- International perception that Brazil's labor and environmental standards are poor on sugarcane plantations could hinder Brazil's goal to be the world's main supplier of cane ethanol in the future, the Agriculture Ministry said in a press statement late Thursday.
Former Agriculture Minister Roberto Rodrigues was in Germany all week, where he discussed renewable energy from farm crops, especially Brazil's flagship biofuel - sugarcane ethanol.
In the press statement, the Agriculture Ministry said that Ford Motor Co (F) in Germany was developing a "green" car, defined as a car that runs on nonpolluting fuels developed in areas friendly both to the environment and to labor.
Norbert Kreuger, Manager of Corporate Citizenship at Ford in Europe, said at an event this week in Frankfurt discussing Brazilian agriculture that the success of biofuels will depend on how they are produced. Ethanol must be ecological and socially acceptable to Ford. This is the key to the German biofuels market," Kreuger said. The Agriculture Ministry added in the press release that Kreuger said Brazil has to overcome negative publicity in Germany that suggests Brazil's cane production is expanding at the demise of tropical forests, and workers' rights.
Most of Brazil's cane is located in the center-west and south in fields already opened to cane or other crops. For example, in Sao Paulo, the No. 1 sugarcane-producing state, cane is expanding by taking over coffee, soy and orange groves.
"There is no sugarcane in the Amazon," Rodrigues said in Frankfurt. Rodrigues, 63, is a sugarcane farmer. He resigned unexpectedly in late June. "It rains too much for cane to grow well, and makes it hard for the plant to produce sucrose," he said. Sucrose is sugar.
"Regarding poor labor conditions, we have to be careful not to generalize," Rodrigues said. "These are isolated cases and the government has been working hard to fight it." He said the standard of living has improved in towns where sugarcane is grown and processed for sugar or ethanol.
During the harvest, part time day laborers, a few which live in ramshackle homes on the side of the street outside of farms, can earn a base salary of 500 Brazilian reals per month, or roughly $227 per month. Extra income is paid to those who cut more cane, a razor sharp plant that can grow over six feet tall. The national minimum wage is currently BRL350 per month.
Brazil is trying to position itself as a world leader in renewable biofuels in hopes it can serve China and Europe with fuels derived from its massive crop land. Sweden, for example, has a national plan to eliminate dependence on oil by 2030. Part of that plan involves the production of flex-fuel cars, automobiles that can run on traditional gasoline was well as ethanol.
Rodrigues said he recognized that the Brazilian government had to show Germany that Brazil's sugarcane industry was environmentally and socially sound.
Brazil is the world's No. 1 producer of sugarcane ethanol.
-By Kenneth Rapoza, Dow Jones Newswires; 5511-3145-1488; kenneth.rapoza@dowjones.com
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