Brazil Industry Needed Government Help to Grow
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Posted by Cindy Zimmerman – March 17th, 2006
I have been meaning to put up a link to this AP story that came out a week or so ago about Brazil’s ethanol economy. It’s a good backgrounder on the history of the industry in Brazil and of particular interest to some critics of the government trying to help the industry grow here in the U.S. is this line – After decades of government intervention and subsidies, the industry here is a thriving free market business, complete with ethanol pumps at every filling station in Latin America’s largest country. Just thought that was interesting.
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C. Scott Miller
There are two things that make this article interesting to me:
1 – According to RFA’s new report (http://www.ethanolrfa.org/objects/pdf/outlook/outlook_2006.pdf) the U.S. is already producing more gallons of ethanol than Brazil (4265MM vs. 4227MM)- albeit not as efficiently with corn as Brazilians do with sugar cane. Regretably we don’t have the infrastructure or flex-fuel cars that they have for distribution and use. Obviously, it will take alot more for us to hit 50% consumption than it has taken them – but the trendlines project geometric growth.
2 – I actually think that state governments could do more good by changing regulations than by subsidizing development. There are plenty of investors ready to take the leap of faith necessary to exploit the opportunities ethanol and biodiesel offer but elected representatives are hemming and hawing over the changes necessary to expedite investment. I see it alot in California’s Assembly. Surprisingly, the culprits fighting against reform are the very groups you would think would be the first to support them – so-called “environmentalists” and recycling groups!
That’s why educational blogs like yours, Cindy and Chuck, are so important. Keep up the scintillating reporting and podcasts.
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