Sun sets on Brazil's sugar-cane cutters

· Half a million jobs will go in drive to mechanisation
· Western focus on biofuels has led to labour reforms

Half a million jobs and five centuries of tradition are to be phased out in Brazil's booming sugar-cane industry to satisfy western demands for more socially acceptable work practices in the biofuel sector.

Sugar-cane cutters, who have been working Brazil's land since the 1520s, when Portuguese colonialists first experimented with growing the crop, are to make way for mechanisation.

The Brazilian Sugar Cane Industry Association (Unica) said 80% of the 500,000 jobs would be gone within three years and admitted that moving to a tractor-based system would cause pain and upheaval for its migrant workforce. Unica acknowledged a lack of alternative jobs.

"This will not solve the problem of migration," Marcos Jank, president of the association, told a briefing on biofuels in São Paulo, adding that the group had signed a new "social" and "green" protocol with the government to improve overall conditions in the field.

The condition of sugar workers was rarely noticed when the commodity was exported for sugar but that has changed now that Brazil is the world's second-largest exporter of sugar-based ethanol to use as a biofuel in petrol.

Behind the move to phase out sugar-cane cutters are tales of exploitation that have damaged the image of Brazilian biofuels in big importing countries such as Sweden and potentially in Britain, where the government has mandated that 2.5% of all petrol must come from biofuels. Critics have accused Brazil's sugar-cane industry of presiding over child labour, huge accident rates and workers earning as little as $1.35 (70p) an hour. Employers insist that pay is three times that level.

Manual labour is also blamed for poor environmental practices such as crop wastage and the burning of stubble and leaves before cutting. Mechanisation will allow more of the crop to be harvested and by-products to be used as biomass to power electricity plants, argues Unica.

Brazilian ethanol output grew by nearly a quarter in 2007 to a record 22bn litres, with about 4bn being exported. The government believed it was going to be able to build a huge new export industry around biofuels. But that dream is under threat as the emerging crop-based fuel sector becomes mired in arguments over "food for fuel" and the idea that rising food prices can be attributed to farmers using land to grow fuel crops.

There are also claims that biofuels are causing deforestation in sensitive areas such as Brazil's Amazon basin, seen by scientists as the lungs of the world because the trees there absorb so much carbon.

Unica said subsidies in the US and Europe for farmers and biofuels may be a cause of the rising price of food, which has caused riots in scores of countries this year. But Jank insisted Brazil was not contributing to that development because only 1% of arable land was used for ethanol production.

He was also adamant that higher ethanol production was not affecting the Amazon, pointing out that the area was too wet to grow sugar and insisting that other farming was not edging into the rainforests to make way for ethanol elsewhere.