Sistemas Agroindustrias de Produção e Inovação no Brasil: Grãos e Cana de Açúcar Agribusiness Sector Systems of Production and Innovaton in Brazil: Sugar and Grains

Maria da Graça Derengowski Fonseca INSTITUTO DE ECONOMIA- UFRJ e INFOSUCRO-NUCA/IE- UFRJ José Maria Jardim da Silveira INSTITUTO DE ECONOMIA- NEA/ UNICAMP Equipe de Pesquisa do INFOSUCRO Charles Menard (economista senior e consultor Infosucro-NUCA/ IE- UFRJ) Francisco José Peixoto Rosário (doutorando IE – UFRJ e professor da ESAMC-Alagoas) Rômulo Neves Ely ( estagiário e mestrando COPPE-UFRJ) UNIVERSIDADE FEDERAL DO RIO DE JANEIRO

GRAINS and SOY

Participation of Soy and Poultry on the Brazilian Exports ( 1999 a 2004) FAO e MIDIC/ SECEX Exports of Soy on Total Exports Exports of Poultry on Total Exports Brazilian Agribusiness Share of Market on Total Exports years

Participation of Soy and Poultrys Exports on the Brazilian Agribusiness Exports (1999 a 2004) Fonte: FAO e MIDIC/ SECEX Exports of Soy on Exports of Grains Exports of Soy on Agribusiness Exports Exports of Poultry on Agribusiness Exports years

Soy, Poultry, Beef -Participation on the Total Exports of Agribusiness Products in Brazil (1999 a 2004) Source FAO e MIDIC/ SECEX soypoultrybee f

The Importance of Grain Crops in Brazilian Agriculture, selected years years Total Area GrainsOthers Hectares Area Hectares Share of total harvested area (%) Area Hectares Share of total harvested area (%) ,514,69639,722, ,792, ,761,71739,694, ,081, ,197,38238,802, ,394, ,639,61649,822, ,817, Source: IBGE,2006

Grain Production and Harvested Area, Source: Agrianual (2006)

RegionCoffeeBeansCornSoybeanWheat 1995 North 1,250,461,561,81- Northeast 0,860,310,802,21- Southeast 0,990,782,852,111,99 South 0,550,893,032,211,55 Central-West 1,110,803,442,210,95 Brazil 0,990,542,492,201, North 1,150,611,522,45- Northeast 1,000,411,022,11- Southeast 1,500,993,072,522,55 South 2,150,873,162,101,95 Central-West 1,371,273,672,711,59 Brazil 1,480,692,762,381, North 0,690,701,672,41- Northeast 0,550,450,941,88- Southeast 1,141,203,822,712,07 South 0,961,103,472,281,43 Central-West 0,921,763,772,941,20 Brazil 1,050,813,012,571,43 Partial Productivity by Region and Selected Years (ton/hectares)

Brazil: Total Sales of Fertilizers and Grain Production ( )- mil ton Source: MAPA (

Brazilian States Farm Production% Industrial Production% (1000 ton year) (ton/ per day) Paraná , ,4 Rio Grande do Sul , ,5 Mato Grosso , ,3 Goiás , ,2 São Paulo1.5692, ,4 Mato Grosso do Sul4.3768, ,1 Minas Gerais2.4834, ,8 Bahia1.9913, ,9 Santa Catarina8151, ,9 Piauí5451, ,7 Sub-total , ,0 Outros1.8690, ,0 Brasil , ,0 Source:Abiove e Soybean Yearbook, 2006 Soy in Brazilian States – Farm and Industrial Capability in 2005

Forecast of Brazilian Deficit of Storage Capacity for Grain Exports

SYSTEM OF INNOVATIONS Competitiveness in the Production of grain seeds in Brazil is based on innovation and partnership among the SNDA/EMBRAPA and private companies The launch Property Laws (Lei de Proteção aos Cultivares-9456 Law) helped to develop efficiency in grain seeds crops maintaining the importance of the R&D Systems (EMBRAPA and SNDA)

ItensEMBRAPA SNPA Programas Nacionais de Pesquisa622 Projetos em Andamento Pesquisadores Número Total de empregados Orçamento (US$ milhões, valores de 2005) The EMBRAPA and SNPA Research System SNPA/ EMBRAPA-Sistema Nacional de Pesquisa Agropécuária National Research Programs Number of Researchers Total Employees Budget US$ Million,2005 Number of Projects

Property Rights in seeds: R&D licencences in the SNPC ( ) Source Teixeira (2006) c ompanies

Seed and Crop Yelds- Participation of EMBRAPA on Value of Production and Economic Benefit (2002/2003) Produto Embrapa Seeds and Crops (%) Value of Production EMBRAPA- 2002/2003crops (R$ Million) * EMBRAPA Benefit (R$ Million) * Cotton53,31.753,8924,5 Water rice37,81.114,1253,2 Dry Rice43,21.441,0405,1 Beans53,62.268,21.641,1 Corn8, ,9 Soy39,09.932,7997,0 Wheat28,5583,1295,4 totaln.s.a ,44.943,4 Fonte: Teixeira, 2006.

EMBRAPA and Innovation The importance of EMBRAPA e other governmental centers is related to their efficiency on biotechnology innovations  grain and other crops, with exception of corn

EMBRAPA: Funding Innovation Activities using Royalties e Partnership Contracts (2001/06) Source: Teixeira, 2006 Licences (1.000 ton) Royalties (R$ 1.000) Number of Contracts

The Sugar and Alcohol SSPI

Sugar and Alcohol Institutional History in Brazil  1937: Instituto de Açúcar e Alcohol (IAA) was created to coordinate production defining rules and norms of production and comertialization to the private agents  1971: Planalsucar: R&D agency belonging to IAA  1970/1971 Centro de Tecnologia da Copersucar (CT- COPER) into COPERSUCAR  First Oil Crisis-1974/75  Proalcool is created in 1975 – national security perspective  Second Oil Crisis and Economic Debt Crisis in Brazil in the end of the 70´s/ beginning of the 80´s Impossibility to sustain governmental programs  End of Proálcool in 1990

Source: UNICA- Quoted from Delgado,V.,BNDES(2007) Evolution of Sugar Cane and Ethanol Production and Facts

Source: Unica

Brazilian Exports of Sugar and Alcohol in US$ FOB US$ FOB Alcohol US$ FOB Sugar US$ FOB Source

Brazilian Exports of Sugar and Alcohol by Countries BRICS Brazilian Exports of Sugar by Destiny BRICS Brics

Source (06/2006)- Quoted from Delgado,BNDES(2007) US,UE and Brazil Ethanol Production(2006) USBrazil UE

Brazil and US: 70% of Production Source:RFA (F.O.Licht) Biggest Producers of Ethanol * (10 countries:89% of global production) Millions of GAL per year * All degrees of ethanol

Sugar and Alcohol Production in Production (1970/ /2004) Source : Infosucro

Potential Production for Sugar Cane Agriculture Source:IG-UNICAMP- CGEE

BRAZIL-Sugar Cane Mills and Alcohol Production Plants 316 Source: IBGE/PIA SUGAR AND ALCOHOL PLANTS Sugar Alcohol

Source: Fonseca and Menard, INFOSUCRO IE-UFRJ Concentration Rates of Sugar Cane Industrial Plant Producers Production in Brazil (2002/2006)

Source of Data: BEN-EPE quoted by Ely,R.N. - INFOSUCRO Sugar Cane Diversification Sugar,Alcohol and Eletricity Co-Generation consume in TEP* *TEP: 10x10 cal (joules) 9

Ethanol Production Costs (US$/galon) Source:USDA Brazil Sugar-cane US corn US Beet US Cane US White Sugar UE Beet

Productivity Gains Center-South Region Source: UNICA 40,00 45,00 50,00 55,00 60,00 65,00 70,00 75,00 80,00 85, tcane/hectare 750,0 950, , , , ,0 gal ethanol/hectare tcane/hectare Gal ethanol/hectare

Productivity and Agribusiness Yields Ton cane/hectare Industrial Yelds* *kg ART/ton sugar cane Source: INFOSUCRO

SELLING CARS IN BRAZIL ACCORDIND THE TYPE OF FUELS

Innovation in Sugar Cane Production

Sugarcane crops in Brazil/Innovation Protection from pests and diseases is a strength of Brazil’s production: it is based on a continued supply of resistant sugar-cane varieties and not much on phytosanitary barriers ( natural traps) The sugar-cane genetic improvement programs in Brazil released 51 varieties over the past ten years; the most used variety occupies just 12.6 percent of the area. Brazil has (non-commercial) transgenic varieties since the 1990’s.

Next Step Innovations Next 10 – 20 years much more efficient use of sugar cane biomass will increase significantly the range of products and their value –Some technologies in advanced development stage (worldwide) are key for this transformation: the hydrolysis of biomass (bagasse and trash) as well as many different fermentation technologies; and the biomass gasification, leading to power or fuel synthesis. –Sugar cane appears an ideal feedstock for future “bio-refineries”, for its relatively low cost, large availability and an interesting mix of 1/3 sucrose & 2/3 pre-processed ligno-cellulosic material.

R&D Institutional Structure PRIVATE CTC- Centro de Tecnologia Canavieiro (old CT-COP from Coopersucar created in 1970)  incremental innovations and development of new varieties of sugar cane (genetic improvements) GOVERNMENTAL APTA: Agência Paulista de Tecnologia do Agro-negócio da Secretaria de Agricultura de SÃO PAULO Instituto Agronômico de Campinas, IB ans IEA (SP) Planalsucar (Araras-SP) belongs now to the Universidade Federal de São Carlos EMBRAPA

UNIVERSITIES - UNICAMP- CBMEG - SÃO CARLOS- Departamento de Biologia Vegetal  Programa de Melhoramento Genético da Cana e Departamento de Recursos Naturais e Proteção Ambiental - FEALQ- Piracicaba - Universidade Federal Rural de Alagoas - Centro de CARPINA em Pernambuco

CTC 6 Destaca-se pela alta produtividade, com alta resistência às principais doenças sendo recomendada para colheita do meio para o final da safra, em ambientes de boa a média produção. Apresenta fibra baixa, pouco florescimento CTC 7 Destaca-se pela precocidade, com alto teor de sacarose e resistência às principais doenças, sendo recomendada para colheita no início da safra, em ambientes de alta a média produção. Apresenta fibra média, pouco florescimento CTC 8 Destaca-se pela ótima brotação de soqueira e porte ereto, sendo recomendada para colheita do meio para o final da safra, em ambientes de média produção. Apresenta fibra alta, pouco florescimento e pouca isoporização. CTC 9 Destaca-se pelo alto teor de sacarose e precocidade, sendo recomendada para colheita no início da safra, em ambientes de média a baixa produção. Apresenta fibra média, pouco florescimento e pouca isoporização. CTC Second Generation Varieties

Xylella strains Leifsonia Leptospira Eucalyptus Human pathogens Bovine Coffee X. citri X. campestris Fonte: Fapesp/ Embrapa Biotecnology and Sucar Cane Sugar Cane Project Other Projects UNICAMP- CBMEG

Genetics and genomics to develop new sugar cane varities São Carlos Objetivo: bio-informátics projects UNICAMP Genetic and genomics innovations related to the development of agribusiness products: soya, citrus,grapes, eucaliptus and sugar-cane UNICAMP start-ups

Thank you!

Source: MDIC- AliceWeb-INFOSUCRO (2007) Brazilian Exports of Sugar by Destiny BRICS Other Africa East of Asia US West of Asia UE

US BRICS Japan Africa West of Asia Central America Other T Brazilian Exports of Alcohol by Destiny * Source: MDIC- AliceWeb-INFOSUCRO (2007)