Farm Compliance

“This trip gave us a good look at how a nation very much like the United States in many ways is confronting its own energy needs and agriculture challenges in an innovative way,” said NCGA Chairman Ron Litterer. “It’s a country that is not afraid to move away from petroleum and toward renewable energy using significant government and marketplace encouragement.”

Also making the trip were Darrin Ihnen of South Dakota, NCGA Vice President; Dave Nelson of Iowa, NCGA Corn Board member; and Rick Tolman, NCGA’s chief executive officer.

UNICA is the leading group representing sugar and ethanol in Brazil. While it is officially a state-level organization, representing only 118 out of 400 mills in the nation, the production of those mils is more than half of the sugar and ethanol produced in Brazil. The NCGA team met with U.S. embassy officials and others.

Among the NCGA’s team observations:

• Higher Blends Common: Sugar ethanol is a major part of the liquid fuel scene and Brazil does not sell any pure gasoline. All gasoline is blended with at least 20 percent ethanol. While only 25 percent of the vehicles on the road in Brazil are flex fuel vehicles (FFVs), more than 95 percent of the new vehicles are flex fuel. Consumers strongly prefer flex fuel vehicles and like the choice they have.
• Flex-Fuel Vehicles: Eleven automakers now produce FFVs in Brazil and a 12th – Hyundai –will soon start. The technology is simple and inexpensive. Many imported vehicles that are not FFV operate on the 25 percent ethanol blend without modification. Many states in Brazil have tax incentives for FFVs – some offer a 5 percent personal property tax credit for FFVs.
• Deforestation: The United States imports over a billion dollars of lumber from Brazil annually, creating one of the demand sources for deforestation of the Amazon region. The Brazilians scoff at the indirect land use theory proposed by some to criticize biofuels expansion. Deforestation, they believe, is driven by the illegal lumber trade and other causes not related to biofuels.

“The Brazilians clearly understand that it is in their interest and ours for the us to work together to help develop a world biofuels market, instead of letting others put us in an adversarial relationship,” said NCGA CEO Tolman. “The industry in Brazil has done some remarkable things and their experience and leadership should be a powerful example to policy makers in the United States of how to break our dependence on imported oil and create an environment of consumer choice in fuels.”