Biodiesel policy for family farms in Brazil: one-size-fits-all?

Abstract

Driven by the increasing environmental concern related to the use of fossil fuels and the growing worldwide demand for biofuels, the Brazilian government launched a national biodiesel policy promoting feedstock supply from family farms. Especially in semi-arid regions farmers have been encouraged to grow castor bean. However, there has been little farmer uptake and knowledge is lacking regarding the main constraints that hamper farmers’ engagement in the biodiesel market. A farm typology, developed on the basis of original data gathered in two municipalities in the Southeast region of Brazil, revealed that the majority of farmers (livestock, mixed and less endowed farm types) face great challenges to participate in biodiesel markets. A stronger policy impact could be achieved by the promotion of biodiesel crops that have alternative markets and fit more easily into the current farming system, such as sunflower, resulting in reduced trade-offs with current crop activities and allowing synergies between fuel and feed production (livestock farmers). Better enforcement of resource providing contracts are critical to avoid default and to alleviate labour (mixed farmers) and land constraints (less endowed farmers), thereby improving farmers’ ability to engage in biodiesel crop production. Furthermore, soybean farmers lack policy instruments based on price incentives which could enable their engagement in sunflower production.