6 June 2010
Two years ago I had the privilege to host a group of Ph.D students
from The University of California - Berkeley on a Mato Grosso tour.
If I remember correctly, two of the students were studying
The trip was cost shared by BP.
Back in 2008, the concern was how high commodity prices and the
growing of crops for bio-fuels were going to affect the environment.
Will the growing of crops for fuel continue to incentivize the
deforestation of the Amazon biome? This was the thesis of the tour.
I at the time argued that this area is not the true Amazon biome. It
is a transition area between
and Amazon. I explained the dynamics of the marketplace,
environmental laws in Brazil, and the challenges faced by interior
producers including logistics and low dollar exchange rates.
We had a vigorous debate at times. Both sides of the debate have
equity. Since then commodity prices have subdued and the world has
adequate carryover stocks to supply all the demand needs put in
place by bio-fuel mandates. With a strong Brazilian Real and
economy, the marketplace has dis-incentivized the expansion of crop
areas in environmentally sensitive areas. Farmers are producing more
on land already in production and not worrying about expanding area.
It costs too much to bring new land into production.
The world has been obsessed with Amazon biome in recent years.
Deforestation, Carbon credits, Illegal logging and property rights
of those on the land. Many of these initiatives have a valid point
and should be pursued.
Brazilians are more than happy to comply with international
standards. From what I see in Mato Grosso and elsewhere, the
Brazilian producer is doing a very conscientious job of complying
with environmental laws. Reforestation of native species, expansion
of fish farming and environmental habitat, no till farming and 100%
recycling (recording) of chemical containers used in agriculture for
crop protection are all examples of the conscious effort being made
Long story short: Brazil is doing a fine job of caring for
This is where the cynicism starts. Brazil has looked to the northern
hemisphere for guidance on these issues. They see how many in the
north have cleared all the trees and farm to the river bank. Hunting
is not allowed in Brazil. Brazil has strict laws regarding
animal protection. So when Brazilians watch the news and see an
event like the oil spill in the gulf, they say: “Who are you to tell
us what we should be doing regarding our natural resources?” “Get
your own house in order first.”
Brazil has found massive oil supplies on its Atlantic coast. It will
all be deep water drilling. Let us hope that we all learn something
from this Gulf oil spill to help insure this does not happen again.
I think many inside Brazil hope this refocuses the environmental
debate to topics more tangible and relevant to today’s debate. The
elusive Amazon issue needs to be monitored and discussed. However,
from a Brazilian perspective, there are much more important
environmental issues at hand.
We don’t see monkeys soaked in OIL in Mato Grosso.
Truth is stranger than fiction. I cannot help but wonder if those
environmental law students I mentioned above just might find
opportunity helping victims of the Gulf oil spill sue BP for damages
incurred. The very company that gave them scholarship to help them
understand the fuel verses environment debate. I would think Alan
Shore and Denny Crane would get a good chuckle from that novella.