The agrofuels industry in Latin America and the Caribbean

The sugarcane industry was one of the earliest activities during colonization in the Americas, and was continuously marked by the appropriation of territory and by the exploitation of cheap labor. This activity allowed sectors that controlled production and commercialization to obtain more capital, and to contribute to the construction of capitalism in Europe.

Ethanol production is increasing in Latin America, as signaled by a memorandum signed between the governments of Brazil and the United States in March 2007 to spread agrofuel production in the region. Currently, Brazil and the United States are responsible for 70% of global ethanol production.

The memorandum specifically cites Central America and the Caribbean as “key regions” for the production of agroenergy. The effect of this announcement was immediate. Guatemala recently began ethanol production on lands that traditionally produced sugar. Today, four ethanol distilleries exist in the country, which together produce 550 thousand liters of ethanol per day.

In El Salvador, President Elías Antonio Saca negotiated a pilot project to receive technical assistance from Brazil and the United States in order to begin a National Agroenergy Program.

In Costa Rica, the March 20th edition of La Nación revealed that “a large global demand in ethanol will result in a change in the national agricultural structure.” Technicians from the Ministry of Agriculture in that country attempt to stimulate the substitution of other crops by sugarcane or yucca, for the production of ethanol and vegetable diesel. “The country should adopt the decision of concentrating on these products, and avoiding investment and research in others,” asserted Alfredo Volio and Carlos Villalobos, Minister and Vice-Minister of Agriculture.

Farm worker organizations connected to the Latin American Coordination of Rural Organizations (CLOC) rejected this policy, since, they argued, it represents a risk for food production, and for the very survival of rural communities. Incentives for agroenergy projects eliminate resources and infrastructure for smallholder agriculture, which is responsible for the majority of food production consumed in the internal markets.

The strategic interest of the Bush government in converting Central America into a region of ethanol export is related to the pressure imposed on Central American countries to approve the Central America Free Trade Agreement (CAFTA), which would facilitate the entrance of ethanol into the North American market.