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Land Use Change, Ethanol Production Expansion and Food Security in Brazil

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Part of the Natural Resource Management and Policy book series (NRMP,volume 40)

Abstract

The concurrence of major increases in ethanol production and world commodity price increases were captured by the ‘food-versus-fuel’ dilemma around 2008. Brazil is the largest producer of ethanol worldwide and still has vast tracts of natural land available. This paper uses Brazil as case study to simulate food security and environmental impacts, especially on forests, of increased biofuel production. Results show that sugarcane production is concentrated in higher productivity regions so reaching the 2022 ethanol target would require only 0.07 Mha of new land, or 0.02% additional deforestation over baseline. Second, per-area production intensifies as land prices increase, indicating a nonlinear relationship between land area and production. Specifically, results indicate an average indirect land use change effect of 0.083 ha of new agricultural land for every 1.0 ha of additional sugarcane. Current discussions of biofuel expansion miss this critical point of intensification, which results from market forces and technological change. These results are assumed to be driven solely by cost-minimizing behavior, thus leaving significant room for policy to expand agricultural research resulting in greater per unit output and subsequent environmental benefits. Finally, results support historical data that land use change due to biofuel production has little impact on food security.

Keywords

  • Land use Change
  • Ethanol production
  • Food security
  • Brazil

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Fig. 1

Source UNICA and Secretaria de Comércio Exterior do Brasil (SECEX)

Fig. 2
Fig. 3

Source IBGE—Produção Agrícola Municipal

Fig. 4

Source PRODES (INPE) and Pesquisa Agrícola Municipal (IBGE)

Fig. 5
Fig. 6
Fig. 7

Source Model results

Fig. 8

Notes

  1. 1.

    Permanent crops area accounted for 6.2 million hectares in 2012.

  2. 2.

    São Paulo is the richest state in Brazil, with about 33.5% of national GDP in 2010.

  3. 3.

    Sugarcane productivity is higher in São Paulo than in other states. Besides, the other Brazilian regions produce a higher share of sugar than ethanol when compared to São Paulo.

  4. 4.

    Available at http://seriesestatisticas.ibge.gov.br/series.aspx?vcodigo=IU12&t=desflorestamento-na-amazonia-legal-3-desflorestamento-bruto-anual-na-amazonia-legal.

  5. 5.

    This simulation differs from that in Ferreira Filho and Horridge (2014) in two main ways: the baseline historical simulation was updated to 2013, and a revised scenario is used.

  6. 6.

    The actual average deforestation for 2009/2013 by PRODES is 626 thousand hectares. We have used a value slightly higher because PRODES figures does not include some areas in Piaui state.

  7. 7.

    The Empresa de Pesquisas Energéticas (EPE) is a research center linked to Brazil’s Ministry of Mines and Energy.

  8. 8.

    This value is a weighted average of the EPE forecasts for anhydrous and hydrous ethanol. The value used in the paper is slightly below the EPE forecast, which is around 9.6% per year from 2013 to 2022.

  9. 9.

    Notice that some transition from unused to pasture appears in the matrix in the non-frontier regions, since it’s calibrated from past data. In the simulations, however, no deforestation is allowed in those regions, as discussed before.

  10. 10.

    This means that some land previously under pasture would be set aside, as is indeed observed from the data. A different (observed) transition matrix in the Second Brazilian Communication to the United Nations Convention Frame (Brasil 2010) estimates that 1.3 Mha of land was set aside between 1994 and 2002 in Brazil, 0.27 Mha of which was in the state of Mato Grosso.

  11. 11.

    The reduction in consumption of the richest household is linked to the fall in production of activities intensive in more skilled labor, like the oil industry (gasoline), whose consumption would fall when ethanol consumption increases (substitutes).

  12. 12.

    Silva et al. (2014) discussed the land sparing importance of technological changes in agriculture and livestock production in Brazil, concluding in favor of the “Borlaug hypothesis” for technological improvements in livestock production.

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Correspondence to Joaquim Bento de Souza Ferreira Filho .

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de Souza Ferreira Filho, J.B., Horridge, M. (2017). Land Use Change, Ethanol Production Expansion and Food Security in Brazil. In: Khanna, M., Zilberman, D. (eds) Handbook of Bioenergy Economics and Policy: Volume II. Natural Resource Management and Policy, vol 40. Springer, New York, NY. https://doi.org/10.1007/978-1-4939-6906-7_12

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