Brazil – The world’s most efficient ethanol producer

This column on Tuesday, 20 July, wrote on the need for research into the possibility of producing bio fuel from rice in Sri Lanka.

This was due to the very real possibility of a bumper rice crop in the current cultivation season and the ones that will follow, for which farmers may not be able to find ready markets, and alternative markets and uses for rice will necessarily have to be developed.

A reader has drawn my attention to Brazil, one of the new emerging BRIC powers (Brazil, Russia, India and China), which is currently the world leader in the production of ethanol from sugarcane and also the largest consumer in the world of ethanol as a fuel additive for vehicles. Brazil is the world’s largest producer of ethanol fuel and the world’s largest exporter.

Sir Martin Sorrel, an international icon in the advertising industry has talked of the dawn of a Latin American decade; Brazil drives much of the optimism. In 2009 Brazil produced 37.7% of the world’s total of ethanol used as fuel.

Brazil is keen on establishing a global market for the green fuel; it seems willing for this purpose to disseminate the technology for producing and consuming ethanol to other countries to create new suppliers and consumers, at the same time making a global market for ethanol a reality and generating business opportunities for Brazilian firms, globally.

Indeed, Sri Lankan authorities would do well to consult the Brazilians on technical assistance for producing bio fuel from rice and utilising it in petrol and diesel powered internal combustion engines.

Leading player

Brazil is fast becoming a leading player in its outreach to the developing world and emerging markets. Brazil has a number of motives encouraging her to get into this role of benefactor to emerging markets and developing nations.

Not the least important is her present rather lonely quest to get a Permanent Seat on the United Nations Security Council, for which her BRIC colleague India is also yearning.

Third world nations are attracted to Brazil as, like China, Brazil does not impose conditions on human rights and other issues on their assistance to developing nations, unlike Western donors.

The interventions by Brazilian agencies in developing economies include one of the most successful post earthquake assistance programs in Haiti, called Let Agog (Lots of Milk in the local language Creole), a dairy co-operative development programme which encourages mothers to get their children to attend school in exchange for food assistance.

It is modelled on Brazil’s own Bolsa Familia, a poverty alleviation programme targeted to poor and marginalised families, which seems to be showing positive results. The programme in Haiti is totally funded by the Brazilian official development assistance.

In Africa in Mali, Embrapa, a Brazilian research outfit is running an experimental cotton farm, which is showing Mali’s farmers ways of successfully increasing yields. The greater part of the water supply in Luanda, Angola is being built by Odebretcht, a Brazilian construction firm, which is also a big player in the African construction scenario continent wide.

Supporting developing nations

Studies by Britain’s Overseas Development Institute (ODI) and Canada’s International Development Research Centre (IDRC) show that Brazil’s total support for developing nations and emerging market countries totals US$ 1,200 million as direct aid and loans amounting to US$ 3,300 from the State Development Bank, the BNDES, in 2010. This includes assistance to the World Food Programme, the UNDP and loans from BNDES.

Western powers do not seem to mind the Brazilian input since their current thinking is that Brazil, unlike China, does not foster corrupt regimes and support bad policies, which Western NGOs accuse China of doing.

Though Brazilian foreign assistance has not reached Chinese levels yet, it matches hitherto generous donors like Sweden and Canada. Brazil also uniquely still receives foreign aid itself, thus eroding the traditional distinction between donor and recipient and undermining the old system of donor dictated top down assistance, which so many Western INGOs, universities, research institutes and development activists have criticised for good reasons.

To the West, Brazil – stable, democratic, at peace with its neighbours in Latin America, its diplomacy of generosity – certainly looks more attractive, sitting on their side of the table at the donors meetings, than some other aid-giving rivals, like China and Russia.

Path of sustainability

Brazil is an example of a nation which was at one time a large net food importer which decided to change the way it farmed; driven by the fear that worldwide shortages would not permit it to import sufficient food, Brazil decided to expand domestic production through scientific research, not subsidies – unlike most other countries.

Instead of trying to protect Brazilian farmers from international competition, it opened up to world trade and let inefficient farms go bankrupt. In the four decades since then Brazil has become the first tropical agricultural giant and the first tropical country to challenge the big temperate food exporters – America, Canada, Australia and the European Union.

Brazil chose the path of sustainability, encouraged small farmers and organic practices and frowned upon monocultures and chemical fertilisers. Agricultural research was given high priority.

New technology

Brazil depends critically on new technology. The Brazilian Agricultural Research Corporation (Embrapa), a public company set up in 1973, when Brazil was still a net food importer, is the world’s leading tropical research institute.

Within six months of it being set up, Embrapa sent 1,200 young Brazilian graduates abroad to obtain further qualifications. When they came back, they adapted plant and animal varieties they had worked with abroad, so that they could thrive in the tropics.

Embrapa today does everything from breeding new seeds and cattle, to creating ultra thin edible wrapping paper for food stuffs, to running nanotechnology laboratories( at San Carlos, in Sao Paulo state), the world’s only laboratory deploying nanotechnology for agriculture, creating plant varieties which absorb fertiliser more efficiently, biodegradable ultra strong fabrics and wound dressings.

In the next 40 years, Brazil will be one of the most important food producers worldwide as it has not only boosted output a great deal, but has the capacity to continue to do so. It has substantial land and water in reserve, one able to sustain a large cattle herd and is productive without massive state subsidies.

Embrapa now promotes forest, agriculture and livestock integration; fields are used alternatively for crops and livestock but threads of trees are also planted in between the fields, where cattle can forage.

Brazilian scientists caution that there is no magic bullet; theirs was a systems approach – all the interventions coalesced and worked together and it may be not exactly replicable but can be adapted for other tropical countries which have the correct policy in place.

Not rocket science

Ethanol is similar to alcohol, distilling it is not rocket science. In Brazil the sugar cane extract is fermented with the addition of yeast which produces a fermented wine with an alcohol content of between 7 and 10%.

As we well know, this sort of indigenous local expertise and technology exists and is thriving in Sri Lanka, unfortunately mostly on the other side of the law! Producing bio fuel from rice may provide an opportunity to legitimise the practitioners and also a possible source of revenue through taxation of the newly legitimised business.

But producing bio fuel of a quality sufficient to pump into our existing internal combustion engines, mixed with petrol or diesel, and distribution of the product may be a challenge; this is where Brazilian technical assistance would be helpful. Of course we have a national penchant and malaise of yearning to reinvent the wheel; this opportunity may be different, one hopes.

There are no longer any light vehicles running on pure fossil fuels in Brazil. The Government allows a mixture of Ethanol with petrol or diesel up to 22%. Car manufacturers in Brazil have developed flexi fuel vehicles to run on this ethanol petroleum mix, which have been a commercial success, reaching 92% of market share of total car and light vehicle sales in 2009.

(The writer is a lawyer, who has over 30 years experience as a CEO in both government and private sectors. He retired from the office of Secretary, Ministry of Finance and currently is the Managing Director of the Sri Lanka Business Development Centre.)