Brazilian biofuels and social exclusion: established and concentrated ethanol versus emerging and dispersed biodiesel

Increasing interest in biofuels trade between developed and developing countries has spurred worldwide discussions on issues such as subsidies and the ‘food for fuel’ crisis. One issue missing in recent discourse is the pressure exerted on developing countries to adopt large-scale mechanized farming practices to increase economic efficiencies. Such approaches often exclude small-scale farmers from participating in the emerging biofuels market, thus exacerbating poverty and social exclusion. Drawing on both qualitative and technical data, we discuss such pressures using Brazilian ethanol and biodiesel production. Pressure from international markets to become more economically efficient may contribute towards the erosion of recent schemes to encourage social benefits for small farmers in biodiesel production. We conclude with trade and policy implications.