5.2 Allocation and Access: Analyzing Institutional Performance
105
ever-larger, consolidated farms (IBGE 2019). Yet, the latest data show that family
farming provides for 70% of all the food consumed in Brazil and 74% of all rural
jobs, employing on average 15 persons per hectare, against 1.7 persons per hectare in
large agribusiness. Moreover, the former has created twice as much economic value
per hectare than the latter (IBGE 2009).
Biofuels and other bioeconomy value chains have therefore entered a very skewed
agricultural sector. Policy incentives have targeted and primarily benefited the
agribusiness minority. Large-scale farms—often vertically integrated and owned by
the industry itself—control 75% of all ethanol production in São Paulo state, the
center of Brazil’s sugarcane agroindustry (Goldemberg et al. 2008). This proportion
is even more significant in Brazil’s Northeast, where traditional structures of large
landlord ownership are even more prevalent (Hall et al. 2009). As such, smallholder
participation is considerably limited. Smallholders at sugarcane expansion frontiers
usually sell their lands and move to a city, increasing land ownership concentration (see Novo et al. 2010 for the case of small dairy farmers in São Paulo state).
Experiences are demonstrating the feasibility of small-scale distilleries and local
ethanol utilization in some parts of the country. Still, these usually face financial,
technological, infrastructural, and organizational limitations, and they have poor
market access. Biofuels cannot be sold in Brazil without verification of technical
standards, but meeting these standards incurs technology and transaction costs that
small-scale producers have difficulties to afford (Moreno and Ortiz 2007). Consequently, small- or medium-size sugarcane growers are usually bound to sell their
produce to processing mills controlled by large landowners or agribusiness companies who possess the necessary resources and capacities (see Hall et al. 2009; Gomes
et al. 2010a). These private industries, therefore, capture all value-added stages of
production.
Meanwhile, there is an increasing ownership concentration of crop genetic
resources. Although much of the feedstock plant breeding and processing technology
was developed with public funds since the 1960s, the recent spike in acquisitions from
multinationals has shown an increasing transfer of control to international private
capital. Consequently, profits are likely to become less “socialized,” and access to
those technologies becomes more restricted even though their base was built on
taxpayers’ money. This social equity issue applies to genetically modified soy and
corn feedstocks widely used in Brazil as much as to sugarcane.
Advocates of the sugarcane-ethanol sector argue that there are substantial social
benefits in employing hundreds of thousands of sugarcane cutters for manual
harvesting every year (Goldemberg et al. 2008). However, mechanization is rapidly
reducing that form of employment in some regions, and indeed an examination of
the quality of those jobs quickly reveals their insecurity and health-degrading work
conditions (Novaes 2007; Gomes et al. 2010a; Rocha et al. 2010). Cases of cheating
on workers’ payment per productivity are also common and a source of conflict
105
ever-larger, consolidated farms (IBGE 2019). Yet, the latest data show that family
farming provides for 70% of all the food consumed in Brazil and 74% of all rural
jobs, employing on average 15 persons per hectare, against 1.7 persons per hectare in
large agribusiness. Moreover, the former has created twice as much economic value
per hectare than the latter (IBGE 2009).
Biofuels and other bioeconomy value chains have therefore entered a very skewed
agricultural sector. Policy incentives have targeted and primarily benefited the
agribusiness minority. Large-scale farms—often vertically integrated and owned by
the industry itself—control 75% of all ethanol production in São Paulo state, the
center of Brazil’s sugarcane agroindustry (Goldemberg et al. 2008). This proportion
is even more significant in Brazil’s Northeast, where traditional structures of large
landlord ownership are even more prevalent (Hall et al. 2009). As such, smallholder
participation is considerably limited. Smallholders at sugarcane expansion frontiers
usually sell their lands and move to a city, increasing land ownership concentration (see Novo et al. 2010 for the case of small dairy farmers in São Paulo state).
Experiences are demonstrating the feasibility of small-scale distilleries and local
ethanol utilization in some parts of the country. Still, these usually face financial,
technological, infrastructural, and organizational limitations, and they have poor
market access. Biofuels cannot be sold in Brazil without verification of technical
standards, but meeting these standards incurs technology and transaction costs that
small-scale producers have difficulties to afford (Moreno and Ortiz 2007). Consequently, small- or medium-size sugarcane growers are usually bound to sell their
produce to processing mills controlled by large landowners or agribusiness companies who possess the necessary resources and capacities (see Hall et al. 2009; Gomes
et al. 2010a). These private industries, therefore, capture all value-added stages of
production.
Meanwhile, there is an increasing ownership concentration of crop genetic
resources. Although much of the feedstock plant breeding and processing technology
was developed with public funds since the 1960s, the recent spike in acquisitions from
multinationals has shown an increasing transfer of control to international private
capital. Consequently, profits are likely to become less “socialized,” and access to
those technologies becomes more restricted even though their base was built on
taxpayers’ money. This social equity issue applies to genetically modified soy and
corn feedstocks widely used in Brazil as much as to sugarcane.
Advocates of the sugarcane-ethanol sector argue that there are substantial social
benefits in employing hundreds of thousands of sugarcane cutters for manual
harvesting every year (Goldemberg et al. 2008). However, mechanization is rapidly
reducing that form of employment in some regions, and indeed an examination of
the quality of those jobs quickly reveals their insecurity and health-degrading work
conditions (Novaes 2007; Gomes et al. 2010a; Rocha et al. 2010). Cases of cheating
on workers’ payment per productivity are also common and a source of conflict