At the 22nd annual International Sweetener Symposium held in Idaho this week, Brazil’s agricultural dominance and questionable production practices were a hot topic. “Brazil is the world’s largest exporter of sugar, soybeans, beef, poultry, tobacco, orange juice, coffee, and ethanol. And they’re among the world’s largest producers of corn and fruit,” the American Sugar Alliance’s Jack Roney told more than 300 participants at this year’s Symposium.

“The scariest thing is they’re still growing,” he added. “And their goal is complete domination of the world agricultural market.”

Armed with subsidies, virtually no labor or environmental standards, millions of acres of untapped land, and full protection from reform as a “developing country” in the WTO, Roney fears Brazil’s dominance sees no end in sight. U.S corn and sugar farmers are especially wary of Brazil’s subsidized sugar ethanol industry.

America, which produces corn-based ethanol, currently levies a duty of 50 cents per gallon on all ethanol produced abroad.
This tax has kept cheaper Brazilian sugar ethanol at bay, but if a trade agreement were negotiated with Brazil, U.S. farm leaders believe elimination of ethanol duties would be atop Brazil’s wish list.

Steve Williams, a Minnesota sugarbeet farmer, recently attended a gathering of world sugar industry representatives in Brazil. It was at that meeting that Williams first learned of Brazil’s intentions to dominate America’s market.

“Make no mistake about it, Brazil’s sugar industry views the U.S. ethanol and sugar markets as crown jewels,” he said. “Without duties, America’s ethanol and sugar industries would be hard pressed to survive an onslaught of subsidized Brazilians determined to have a monopoly.”

Thirty years ago, the Brazilian government began building the world’s most sophisticated ethanol empire. With mandated ethanol consumption, a government-built infrastructure, and billions in subsidies, Brazil quickly became the world’s biggest and cheapest ethanol producer and exporter.

Today, Brazil produces 4.5 billion gallons of ethanol—a number that is expected to increase once Brazil completes construction on 30 new sugar ethanol mills.

As Roney explained, this stratospheric rise of ethanol production gives the country unfair advantages in sugar production, too.

Three decades of ethanol subsidies propelled Brazil to the world’s largest sugar exporter. According to the USDA, Brazil’s sugar exports increased sixteenfold over the past 15 years, and today they export twice as much sugar annually as America consumes.

Brazil’s sugar farmers save as estimated $1 billion in production costs each year because of the government’s ethanol program.

These savings, said Roney, coupled with millions in direct subsidies, and currency devaluation help Brazil sell sugar below world production costs.

“America’s farmers and ranchers all have a common threat,” Roney concluded. “That threat is Brazil, and if we don’t work together at the WTO to address their market-manipulating practices, Brazil could eat America’s heartland.”