Brazzil

I believe that this article misses the point about Brasilian ethanol and lapses into the kind of hyperbole that the U.S. ag lobby lives off of. Producing and exporting sugar-based ethanol is real work that
results in a good that can be sold at high margins ideal for spurring both ag and industrial sector development in Brasil, but at not nearly the margins that the Saudis enjoy. There is no risk of going on a kind of
ethanol "needle" similar to the debilitating effect that sudden oil revenues have had on some lesser developed countries because (1) the profits while ample would not be easy and (2) Brasil could not possibly produce enough ethanol to even begin to rival its own oil production, let alone acquire an OPEC-like hold on world energy markets. Ethanol is so important for Brasil because free trade in agricultural
products has to be the ultimate goal of the country's foreign and economic policy. Ethanol is the lever that can open the door to more equal trading relationships with the rest of the world.

We hear about all the ethanol production but little about the shift in food production. As farmers shift to more lucrative crops we might see and impact similar to what happened in countries where illicit drug production displaced vitally needed food supplies.

Brasil's sugar infrastructure is so bad that Middle Eastern sugar refiners actually import Brasilian sugar cane. This is the 21st century globalized economy equivalent of a Brasilian farmer 400 years ago showing up at the nearest mill with sugar cane in a donkey cart and seeing what he could get for it. This is many levels of infrastructure deficiency down from, say, the Iranians having to import gasoline. The creation of a global ethanol market largely supported by Brasilian production would have to result in added efficiencies throughout the sugar supply chain in Brasil so that you could actually see prices for Brasilian farmers rising with end-use consumer prices in the Middle East, per the example cited above, actually falling. As for crowding out food production, Brasil's hunger problem is more about transportation and infrastructure deficiencies than about lack of production. The small farms surrounding Sao Paulo, for example, have not traditionally had problems supplying the city as the available transportation infrastructure is relatively good. Otherwise, the city could not have grown into a present-day megalopolis.