Last month Brazil took a big step forward with its biofuel usage and research program with the launching of a large scale National Agroenergy Plan. Its goals are to set policies countrywide to encourage farmers to start producing and using biofuel more consistently. Around the primary producing areas of Brazil, natural energy sources are already used to generate electricity and to run small engines. The government wants to boost the scale of these practices with the new effort.

The primary reason for the initiative is to rely less on oil and prepare the production chain to inevitable fossil fuel shortages. Experts working for the program say that around 2050, oil prices will be prohibitive and the world, farmers included, will need to have an energy source other than petroleum. Concern for the environment, which is known to be affected negatively by the use of fossil fuel, is another factor.

The impact of biofuel usage in Brazil should not affect its grains output too significantly because the large percentage of biofuel will be derived from sugarcane alcohol (ethanol), which has been a common alternative power source for Brazilians for more than 30 years (since the 1970s oil crisis).

Brazil's use of natural fuel comprises 23 percent of all energy spent in the country, compared to a world natural fuel use of 1.7 percent.

Local specialist Décio Luiz Gazzoni from Embrapa (a Brazilian agribusiness company) says, “The sugarcane ethanol cost balance is highly favorable. The potential energy extracted from sugarcane is eight to 10 times the energy actually spent to extract it.”

Even if soybeans are used to generate biofuel in Brazil, this is not likely to affect the country's exports. Rather, production in Brazil will be boosted to match internal demand and to maintain export rates at the current level. Farmers will have plenty of time to prepare themselves for this.

Although it is not yet required, from 2008 on, Brazilian oil companies will have to add at least 2 percent biodiesel to regular diesel. From 2012, this percentage will rise to 5 percent. This will act as an incentive to industries to develop profitable ways of using biodiesel and for farmers to produce more to meet internal demand.

Soon these policy changes will be knocking on the doors of the machinery industry. To be competitive, they'll have to develop tractors and combines that run on biodiesel leaded fuel, or on biodiesel itself.

In the late 1970s, after the international oil crises, Brazil developed the catalyst for its biofuel program, the Próalcool Program. With it Brazilians developed cars with ethanol-run motors.

Today, about half the country's automobile fleet uses this fuel, even though the program collapsed in the late 1980s. Although ethanol-run cars were no longer produced in large scale, the government passed a law requiring the addition of ethanol to gas and today, all cars in Brazil run on ethanol mixed with gas. The know-how to build and develop natural fuel engines is already a work in progress in Brazil. The next step will determine if the country is to stay in the lead for alternatives to fossil fuels.

The national agricultural equipment industry isn't wasting time. Embraer, the Brazilian Aircraft Company, has already developed a crop duster that runs entirely on ethanol. The Ipanema Álcool flies on sugarcane-extracted fuel. There are already hundreds of Ipanemas dusting in Brazil.

Unica (the Sugarcane Producers Union of Brazil) members go even further. They believe that with stronger government aid, producing sugarcane will be a better business than it already is. The expansion of the market will bring more money and they'll be able to invest more in production, providing higher profits in the long term.

Jose Sergio Osse is a Brazilian agricultural journalist and owns a public relations firm in Sao Paulo. He has worked as a press advisor for Syngenta, Brazil, and as an agricultural reporter for the country's major newspaper.