After transforming a sugarcane-based ethanol program launched in the 1970s into the world's largest commercial biofuels program, Brazil has set its sights on biodiesel.

The left-leaning government of President Luiz Inácio Lula da Silva wants to focus the program on the production of castor beans, a crop that can be grown in the northeast, the country's poorest region. But while biodiesel advocates hail the program's social and environmental benefits, some say it would require heavy government subsidies and likely fail to attract the necessary private investment.

While Brazil is one of the most important agricultural producers in the world-it is the No. 1 coffee, sugar, orange juice, beef and poultry exporter and might soon surpass the United States in soybean production-its agricultural boom in the past two and a half decades has not trickled down to benefit the roughly 40 percent of Brazil's 180 million people living in poverty. Furthermore, the issue of rural inequality has been catapulted into mainstream political debate by militant landless peasant organizations, which advocate land invasions in an effort to reduce poverty.

Despite government efforts to reduce rural poverty, most of the expansion in agriculture in recent years has been in large industrial farms. Likewise, agricultural reform has achieved limited success. Now, the government sees castor bean production as a way to help solve some of the historical problems of the country's poorest regions.

"Castor bean production is not new to the northeast and we believe that it has a great deal of potential, because it is a crop that can be cultivated in conjunction with subsistence agriculture," said Liv Soares of Brazil's crop research department Embrapa.

While Brazil's poor, dry northeast Sertão is not often suitable for traditional food commodities such as soy, corn, cotton, sugar and coffee, the cultivation of castor beans is viable. "Castor bean production is an ideal crop for the region because it is far less vulnerable to drought than other cash crops," Soares said.

In the shadow of ethanol
The program, like the cane ethanol program, will also reduce the country's dependence on foreign oil. In fact, the first meaningful biodiesel research was conducted in Brazil during the oil crisis in the mid-1970s when the South American nation began seeking alternative fuels. At that time, researcher Expedito Parente began developing biodiesel as an alternative energy. While the government opted to develop a cane ethanol program, rather than a biodiesel program, Parente moved ahead with his research and, by 1980, had filed for the first biodiesel world patent. In 1983, in an effort to bring biodiesel into the spotlight, he helped sponsor the maiden voyage of a biodiesel-powered airplane, which flew from São José dos Campos in the state of São Paulo to the nation's capital, Brasilia.

In addition to reducing Brazil's dependence on imported diesel, castor bean producers may soon be eligible to sell carbon credits. Russia, following in the foot steps of the European Union and Asian countries like Japan, said in recent weeks it would sign onto the Kyoto Protocol, which aims to reduce the world's greenhouse gas emissions levels.

"Castor bean plants capture around 10 tons of carbon dioxide for every hectare (2.471 acres) planted," said scientist Napoleão Beltrão at the Agriculture Ministry's crop research department Embrapa.

Beltrão estimates that 40 percent of the biodiesel produced in the country in the coming years should come from castor beans. Embrapa is working to develop commercial varieties of castor beans with higher levels of oil output-around 60 percent of the weight of the beans-and is also working on varieties that can be planted below 300 meters above sea level. Today beans are only commercially productive above this level.

The northeast state of Bahia is Brazil's leading castor bean producer, accounting for 92 percent of the country's output. But other states like Paraíba stand to gain from the government bill that will set biodiesel levels in regular petroleum diesel sold at the pump at 2 percent.

"That it be mandatory is necessary; biofuel that is not compulsory dies on the beach," said Mines and Energy Minister Dilma Rousseff. "But if it becomes mandatory immediately, it loses the capacity of social inclusion."

She added that a mandate is all but certain and that levels could be raised from 2 percent over time, once higher production levels of biodiesel could be guaranteed agriculturally from family farming. Brazil today has some of the most advanced agricultural technology in the world but also a vast population of landless or subsistence peasants.

Nelson Silveira of Brasil Ecodiesel agreed. "If the fuel mixture becomes mandatory immediately, soy oil will become the main source," he said.

Factoring in jobs
The problem with using soy oil, is that the number of jobs produced from soy cultivation is significantly lower that the number of jobs produced by castor bean production.
Paraíba, a small poor northeastern state, has one of the lowest production costs for castor in the country at BRL800 (US$283) per hectare.

The bill would also exempt family farm castor production from federal taxes. In states or areas where castor was not, viable other oil-generating plants can easily be substituted, such as babaçu or dendê palms, soybean, peanut, cottonseed, sunflower seed and reclaimed cooking oils.

This year, the government has earmarked BRL64 million (US$22 million) in funding to stimulate castor bean cultivation because of its potential to provide income for many of the country's poor farmers. Many farming communities on the agricultural frontiers in Brazil, far from the coast where petroleum diesel is downloaded, could conceivably run entirely on biodiesel produced on the farm, saving considerably in the transport costs which the country's underdeveloped infrastructure makes exorbitant.

Despite the social and environmental advantages of the project, critics say that it's too expensive to be expanded nationally. "The government's efforts are noble, but they make no sense economically. It would be more efficient if the government just took the money that it is going to have to use to subsidize the castor bean program and spend it directly on social programs for the poor," said a vegetable oils specialist, who din't want to be named, involved in shaping a proposal to amend the government's program. "Biodiesel is hugely important for the vegetable oils sector and Brazil, but no investor is going to put the needed money into castor based biodiesel programs."

The specialist said a ton of castor oil costs about BRL1,000 to BRL1,200 (US$353 to US$424) to produce while palm or soy oil costs BRL400 to BRL500 (US$141 to US$176) per ton.

Socially conscientious investing
Despite naysayers, private investment group Brasil Ecodiesel is moving ahead with a multi-million dollar biodiesel project in the state of Piauí. Silveira, the program's founder, believes that castor beans are the best way to help improve the quality of life for local residents, because cultivation will allow residents of the region to begin growing a cash-crop, without completely abandoning subsistence agriculture. "Many of the people involved in the project have not been involved in a cash-based economy," Silveira said. "So it is important that they also maintain traditional products."

Brasil Ecodiesel has invested BRL15 million (US$5.3 million) in the project and expects to produce 15,000 metric tons of castor beans by March. During the first phase of the project, 500 families in the municipality of Canto do Buriti will be involved in the program. Silveira estimated that the sale of the castor beans will increase monthly income BRL700 (US$247). In Piauí, over 50 percent of the population earns less than BRL130 (US$46) per month, the program would represent a significant jump in household revenues. Brasil Ecodiesel hopes to include up to 20,000 families in the program over the next year. Silveira estimates that it will take five to six years for the project to become sustainable.

Brasil Ecodiesel is also planning to expand into other parts of northeastern Brazil, including the state of Maranhão, where the company is considering installing a plant that could export biodiesel to Europe. In the state of Maranhão, the firm expects to plant 2,000 hectares (4,942 acres) of castor beans through the end of the year.

Large companies are also beginning to take an interest in the biodiesel program. Recently, one of the local distributors of Coca-Cola has begun testing biodiesel in 140 of its trucks. Similarly, Peugeot-Citroën donated two cars that are being tested by the laboratory for the Development of Clean Technologies at the University of São Paulo in Riberão Preto. The cars have already driven over 100,000 kilometers (62,137 miles) on B30. According to preliminary results, fuel economy has not been reduced. Likewise, BR Distribuidora, the fuel distribution wing of Brazilian oil giant Petrobras, plans to start offering B2 in 2005. The company will give priority to biodiesel made from the castor bean.

Power generation
In addition to bringing income potential to the Sertão, locally produced castor oil-based biodiesel could also bring light to areas with no electricity by fueling small thermoelectric plants. These types of plants may also diversify Brazil's over-90-percent hydroelectric-generated energy grid.

In Quixeramobim, a community with 30 families in rural Ceará, residents who in the past had depended on car batteries, wood burning stoves and candle light, will soon have electricity, thanks to the first biodiesel-generated thermoelectric plant in Brazil. Through investments of roughly BRL1.5 million (US$530,000), the state government of Ceará, together with five local companies, has installed a small-scale biodiesel plant. Embrapa has planted 100 hectares (247 acres) of castor bean plants, which will be tended by local farmers. In coming months, Embrapa plans to harvest 1.5 metric tons of castors beans, which will produce roughly 400 liters (106 gallons) of oil per day. This oil will be used to fuel a generator that will produce 81 kilowatts of electricity per day, enough to meet the needs of the small community. Furthermore, according to José Luiz Lasalvia, the legal manager at Cummins Latin America, which has donated the generator and is actively involved in the project, over 100 people will be employed in the production of the castor beans.

he government hopes to include castor bean oil in its new Alternative Energy Program, known as Proinfa. Under the program, Brazil's federal power holding company Eletrobras has agreed to buy up to 1,100 megawatts of electricity generated from biomass, including castor bean projects. However, because of the rates that Eletrobras has offered to pay, there has been little interest from the private sector in developing the projects.

Elizabeth Johnson is a freelance writer who has lived in Brazil periodically since 1986. She can be reached at eajohnson@uol.com.br.