Food Security, Labor Market And Poverty Of The Bio-Economy In Brazil

This paper deals with the social implications of ethanol expansion in Brazil. The evolution of the labor market in sugar cane production in the country is analyzed together with its regional patterns of expansion, to illustrate how the changes in the recent expansion are modifying the traditional pattern of labor demand in the activity. At the same time, the distributional effects of sugar cane expansion, as well as it´s impacts on food security and land use change was approached with the aid of general equilibrium simulation models. The analysis shows that both the average earnings and the average years of schooling in sugar cane production are actually higher than in general agriculture in Brazil, and that this is linked to the fast increase in production in Southeast and Center-west. Sugar cane production in those regions is more capital intensive and has much higher productivity than in other traditional regions in Northeast Brazil. The study concludes that the expansion in sugar cane production in the actual patterns is poverty friendly, and has small impacts on food prices and deforestation. The increase in the regional economic imbalances inside the country seems to be the problem to deserve attention.