Brazil's Sugarcane Sector High quality books
Brazil's Sugarcane Sector
By:Brent Borrell,José R. Bianco,Malcolm D. Bale
Published on 1994 by World Bank Publications
The Brazil sugar and ethanol story is as follows: direct government intervention overrides market forces, markets undergo dramatic change, intervention establishes vested interests, rent-seeking blocks adjusment to market change, economic objectives become blurred behind political objectives, opportunities go begging, industry profitability suffers, and national income is foregone. A simple economic model of the Brazilian sugarcane sector and policy, interventions is used to measure the costs of existing policies and to develop better policies. Bazil is an efficient producer of sugar, but policy intervention causes: underproduction of sugarcane, the wrong mix of sugar and ethanol from cane (too much ethanol, not enough sugar), missed opportunities to market ethanol in high value uses (as an octane enhancer and clean fuel), and missed opportunities to make the work sugar market more competitive. Adopting more market based policies could be worth billions of dollars extra to Brazil annually.
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