Haroldo José Torres da Silva

Evolution in Public Policies Designed to Develop the Sugar–Energy Industry in Brazil

Abstract This chapter shows the impact of public policies and the institutional framework for producing ethanol in Brazil. The first part is a literature review about the relevant historical facts and policies, and the evolution of sector performance. The main governmental measures in the sugar–energy industry over the 1930s, 1970s, and 1980s will be presented and described chronologically. There is also a brief review of the institutional changes that took place from 1990 onwards, with the deregulation of the sugarcane industry. The impacts of the modifying role of the State, and the beginning of self-regulation in the industry, will be discussed in this section. Finally, the last section discusses the evolution of the sugarcane industry in the free market environment following deregulation and price liberation, in addition to the challenges and key issues that should guide public policies directed to this sector, especially those associated with the production and the use of ethanol as a biofuel.

Evolution of Production Costs in Brazilian Sugar-Energy Sector

In a context of low carbon economy emergence and growing demand for alternative and renewable energy sources, Brazil appears in the technological and productive vanguard of biofuels. The sugar-energy sector has a great relevance in Brazilian agribusiness; however, it has been suffering severe deterioration of its financial situation. This article presents a methodology to calculate production costs for sugarcane, sugar, and ethanol in Brazil. Besides methodological development, this paper was based on technical and economical survey for the mills and sugarcane producers. This way, the results are presented in a segmented manner for both groups. The goal is to analyze the progress of production costs in Brazilian sugar-energy sector, in 2007/2008 and 2014/2015 crop seasons, with emphasis on technical and economic indicators about raw materials, sugar, and ethanol production. There was a systematic increase in production costs over the last nine crops and decreasing trading prices of products (sugar and ethanol), implying negative economic margin. In addition to these facts, it has been identified a decrease in agricultural productivity indicators, low levels of renovation, and aging of the sugarcane plantation.