The expansion of the sugarcane agribusiness in Mato Grosso do Sul, Brazil

Abstract

Given its pronounced growth, the Brazilian sugarcane agribusiness has become one of the most dynamic sectors of the national economy in recent years, marked by investment of both national and foreign capital, along with institutional reforms and extensive modernization in production methods, including a progressive decrease in the burning and manual harvesting of sugarcane, resulting in the gradual elimination of manual labor in harvesting. The area dedicated to the crop in Brazil has grown 75% since 1990, increasing from 4 million to 7 million hectares. Over the same period, sugarcane production underwent a 150% increase, from 260 million tons in 1990 to 650 million in 2008. Sugarcane production in the state of Mato Grosso do Sul, particularly in the current decade, has increased in line with the growth rate for the sector in Brazil. The area under sugarcane in the state increased from 60 thousand to 170 thousand hectares between 2000 and 2007—an increase of 183% in less than 10 years. From 4 million tons in 1990, sugarcane production rose to 16 million tons by 2007. Higher production figures have been accompanied by a commensurate increase in sugar and alcohol industrial plants, 16 of which are now in operation in the state, with additional 43 projects to be implemented within the next few years. Once all 59 plants have come into operation, the total plants will represent an increase of nearly 500% compared to the industrial units implemented up to the beginning of the present decade. Factors contributing to the attraction of these new enterprises to Mato Grosso do Sul include the costs and quality of land, a favorable climate for sugarcane cultivation, and governmental incentives.