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Economics

Good news for sugarcane

Besides environmental benefits, the increase in ethanol production has helped improve people’s lives in the countryside

Mechanized harvesting of sugarcane in Piracicaba (São Paulo) in 2007: better working conditions

Ricardo Azoury/Olhar ImagemMechanized harvesting of sugarcane in Piracicaba (São Paulo) in 2007: better working conditionsRicardo Azoury/Olhar Imagem

Established in 1975 to reduce expenditures on imported petroleum, the National Alcohol Program (Proálcool) profoundly altered Brazil’s energy matrix, cutting down on pollution and greenhouse gases. But beyond the environmental benefits, the recent expansion of sugarcane agroindustry has made positive impacts on Brazil’s social indicators, according to the study Socioeconomic impacts of Brazilian sugarcane industry, published in Issue No. 16 of the journal Environmental Development (December 2015).

Backed by an extensive survey of bibliographic works, Márcia Azanha Ferraz Dias Moraes, from the Luiz de Queiroz College of Agriculture of the University of São Paulo (Esalq-USP), Fabíola Cristina Ribeiro de Oliveira, from the program in Economic Sciences offered by the Methodist University of Piracicaba (Unimep), and Rocio A. Diaz-Chavez, at the Environmental Policy Centre at the Imperial College, of London, used data from the National Household Sample Survey (PNAD) and the National Report on Social Information (RAIS) to compare the situation of sugarcane field workers with that of workers in other segments of agriculture. They also compared social indicators for the descendants of sugarcane field workers with those working with other crops to find out whether the conditions of the parents influenced the status of their children.

The study showed that workers involved in sugarcane receive higher wages, have achieved higher levels in school, and are more likely to be formally employed when compared with the average of those indicators for the other crops analyzed. It was also learned that the descendants of those employed in sugarcane farming enjoy a higher economic status and experience more mobility in terms of transitioning into endeavors outside agriculture. “We can say that the expansion in sugarcane that we experienced starting in 2008 has helped improve agricultural social indicators,” Moraes says. But those victories are relatively recent, the professor warns. “When Proálcool was created, its primary focus was finding alternatives to petroleum; environmental or social issues were secondary.” In those days, the priority was to do everything possible to reduce Brazil’s dependence on imported oil, which accounted for more than 80% of total consumption.

That economic objective was achieved: sugarcane production rose from 88.9 million tons in 1975 to 588.5 million tons in 2013. This enabled ethanol output to soar from 555 million liters to 23.2 billion liters during the same time frame and contributed to reducing dependence on imported oil to 18% of domestic consumption in 2013. Proálcool also had other direct benefits, as described in the 2011 study Social externalities of fuels by Moraes, Ribeiro de Oliveira, and other authors. The researchers found that the expansion of the sugar/alcohol complex needed to increase ethanol production had created jobs and boosted income in vast regions of Brazil’s interior, while oil refineries have always been concentrated in a few coastal cities.

Sugarcane is received for the start of the ethanol production cycle in Nova Europa (SP): economic, environmental, and social benefits

Eduardo CesarSugarcane is received for the start of the ethanol production cycle in Nova Europa (SP): economic, environmental, and social benefitsEduardo Cesar

Two different time periods
However, from the social point of view, the situation was not satisfactory. “When we look at the literature produced in the 1980s on the subject, we see that working conditions in the sugarcane industry were pretty bad; there was tremendous informality in terms of employment status, and even child labor,” says Moraes. The picture was not much better on the environmental plane; burning fields produced huge clouds of smoke. According to Moraes, those problems were associated with the manual harvesting procedures that employed migrant workers who had come to São Paulo. “Living and working conditions were problematic, and then there were the ‘gatos’ [middlemen who recruited the labor]. From the research carried out by our team we were able to identify an important change in working conditions. There are two completely different periods. There is no longer any reason to talk about slave labor in the sugarcane fields.”

Other studies cited by Moraes had already pointed in that direction. The thesis Indicadores socioeconômicos em estados produtores de cana-de-açúcar: análise comparativa entre municípios [Socioeconomic Indicators in sugarcane producing states: a comparative analysis among municipalities], by Janaina Garcia de Oliveira, defended at the University of Campinas (Unicamp) in 2011, concluded that the Human Development Index (HDI) in the municipalities where sugarcane is produced trended upward from 1970 to 2000: “Sugarcane municipalities in all states showed better indicators of income distribution and access to infrastructure services, mainly to water and sewer facilities.”

Progress in working conditions has intensified since then. What factors have contributed to this change? “The first reason was that the Office of the Labor Prosecutor for the Public Interest was very strict in making certain that rules were actually observed,” the author says. Government inspection work was reinforced by international interests that gained importance as Brazil began increasing its exports of sugar and alcohol. The intense competition on the world market among producers of those commodities, as well as the concern expressed by purchasers of sugar and ethanol who began to more strictly audit the social and environmental practices of their Brazilian suppliers, also contributed to the adoption of more sustainable practices.

Mechanization
The inflow of foreign investors to the sector starting in 2000 contributed to the adoption of more responsible management practices when those companies introduced new managerial and labor standards. According to Moraes, not all Brazilian companies had reproachable practices, but the foreigners helped raise social and working condition standards.

Manual harvesting in Olímpia (SP): exhausting work that is becoming obsolete

Eduardo CesarManual harvesting in Olímpia (SP): exhausting work that is becoming obsoleteEduardo Cesar

However, the primary explanation for the change in rural areas is, according to the author, mechanization of the harvest. The process was accelerated with the gradual elimination of the burning of sugarcane straw in the state of São Paulo, ordered by the 2007 signing of the AgroEnvironmental Protocol of the Sugar/Ethanol Sector and by state laws that regulated the subject. The protocol brought enormous environmental benefits by ending the problems caused by field burnings, besides permitting the use of straw for cogeneration in the electric power sector (as is already the case with bagasse).

On the other hand, mechanization had a perverse effect in that it made manual harvesting of cane impractical, which meant the loss of jobs. “Mechanization requires fewer workers,” the researcher says. “One harvester replaces, on average, 80 cane cutters.” From 2000 to 2012, the number of registered workers throughout the sugar/alcohol sector rose from 642,848 to 1,091,575—an overall increase of 69.8%. Breaking down the figures we see that the number of formally-employed workers rose by 205.2% in the alcohol distilleries and 153.93% in the sugar mills. But the number of workers in the sugarcane fields fell by 7.4%, from 356,986 to 330,710 employees.

The falloff in employment in the industry has one positive aspect, however. “Cutting sugarcane by hand is exhausting work,” says Moraes. Its arduousness is emphasized by other researchers. According to Maria Aparecida de Moraes Silva, a retired professor from the Araraquara campus of São Paulo State University (Unesp), “the working life of a cane cutter is 15 years at most: the work ruins the back, fists, and arms.”

And, as Francisco Alves, a professor associated with the Production Engineering Department of the Federal University of São Carlos (UFSCar) observes, mechanization did not eliminate manual cutting entirely. “Actually, the mechanization model put into place with regard to sugarcane farming requires a combination of mechanized cutting with high-productivity manual cutting. Workers now employed in cutting cane must exhibit high productivity, more than 14 tons per man per working day,” Alves says. This brings on an increase in work-related illnesses.

The gradual decline in the demand for manual cutters was at least partially offset by the creation of jobs for operators of tractors, other vehicles, and harvesters as well as mechanics to repair them, and even electronics technicians, as Moraes pointed out in her 2007 study entitled: O mercado de trabalho da agroindústria canavieira: desafios e oportunidades, [The labor market in the sugarcane agroindustry: challenges and opportunities]. To alleviate the problem of unemployment created by mechanization, the author’s most recent study tells us that the federations of São Paulo employers and workers have arranged training and requalification courses for 3,000 workers every year. Some of those workers have also been absorbed into infrastructure construction in Brazil’s Northern and Northeastern regions.

Sugarcane Technology Center in Piracicaba (SP): progress improves conditions but takes away jobs

Eduardo CesarSugarcane Technology Center in Piracicaba (SP): progress improves conditions but takes away jobsEduardo Cesar

Generations
In order to better evaluate the scope of the significant changes, Moraes, Ribeiro de Oliveira, and Diaz-Chaves used data from government sources (the PNAD and RAIS) that enabled them to compare working conditions and levels of schooling between two generations of workers. To prevent distortions in the comparisons with other agricultural sectors, the team did not take into account figures referring to the employees in the alcohol distilleries and the sugar mills.

Cross-checking the data revealed that the average income of the head of a family (the family reference person, the term currently used in official statistics) in the sugarcane farming sector was 46.5% higher than the average income in other agricultural sectors. The average educational level is five years among sugarcane workers, compared with four years for other workers. When compared with their parents, children of those sugarcane workers averaged 8.4 years of education while children of workers in the rest of the agricultural sector averaged 8.1 years. However, all of them had an income lower that what their parents had earned (14.2% lower in the case of cane, and 3.2% lower for agriculture in general). Several factors influence worker earnings, which may explain why the children, although better educated, are still earning less than their parents did, on average.

Considering heads of families, it was observed that in the sugarcane sector, 86.98% are registered workers, i.e., “their labor record cards are signed.” This compares with only 34.23% of workers in other agricultural sectors. When we compare the descendants, we find that 70.05% of the descendants of cane workers hold registered jobs, while only 49.31% of the children of workers in other sectors do. We therefore observe the influence of parents on the working conditions of their children, i.e., that fact that the majority of sugarcane workers have a signed labor record card probably influenced the choices made by their children. In the case of children of farm workers in general, 43.2% continue in agriculture but among the children of cane workers only 29.3% remain in farming, which indicates greater mobility toward other sectors.

Most of the descendants of those employed in the sugar/alcohol sector are finding work in the services sector (35.3%). Manufacturing absorbs 20.9%, construction 8.1%, and public administration 4.9%. This greater social mobility is probably a result of the influence of family life. “The conditions of the family have a strong influence on the choices made by the children,” Moraes explains. “The better working conditions experienced by the parents are opening up the possibility of better jobs for their children.”

Scientific article
MORAES, M.A.D. et al. Socioeconomic impacts of Brazilian sugarcane industry. Environmental Development. Vol. 16, pp. 31-43, December 2015.