Brazil's social seal law: Keeping protesters at bay?

By James Thompson in Uberaba, Brazil | February 11, 2008
Web exclusive posted March 10, 2008 at 4:44 p.m. CST

In February, a protester in a gorilla suit greeted Tesco PLC supermarket shoppers in Stroud, England, while handing out information about the evils of biofuel production in developing countries.

Anti-biofuels sentiments are nothing new, and the latest agitation focuses on the fear that big biofuels operations will harm small farmers' livelihoods.

Brazil's response to a similar allegation may serve as a model for other nations concerned about big biofuel operations harming small farmers.

Brazil's "social seal law," enacted in 2005, gives biodiesel producers tax breaks and greater access to credit if the producers buy feedstocks from family farms, helping assure that small farmers stay in business.

Such farms typically grow feedstocks that aren't machine-harvested, such as castor beans and jatropha, which tend to be grown on smaller properties. The upper size limit for qualifying farms varies by region. Farmers with 50 hectares (124 acres) qualify in almost all areas of Brazil, but in some areas, farmers with up to 200 hectares (nearly 500 acres) also qualify.

It's estimated that of the projected 480 million liters (approximately 127 million gallons) of biodiesel Brazil will produce in the first half of 2008, 476 million liters (125.7 million gallons) will be produced by companies operating under the social seal.

As many as 100,000 poor, rural families participate in the biodiesel production chain.

The seal squares with the pro-worker outlook of Brazil President Luiz Inácio Lula da Silva.

Whatever the politics, Brazil's approach of benefiting both producers and small farmers keeps biodiesel pumping, and may even ward off the guy in the gorilla suit.
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