The news website G1 ( www.g1.com.br ) has recently reported that producer’s profit
increased due to the corn-based ethanol production produced in the United States. This has caused corn prices to rise in the international market, encouraging  Brazilian farmers to shift their soybean lands to corn production.

     This happens because corn-based ethanol production in the United States is highly subsidized. In other words the money recieved by cron-based  ethanol producers in the United States causes a shift of corn destination. What oncw was destined for food is now destined for corn-based ethanol. What is nthe problem with all this? The problem is that it is unreal and economically irrational. Ethanol should only be produced by ways of sugarcane if economci rationality is followed. If this was the case then corn prices would not rise.

These factors show that soya-bean products are losing ground while corn is becoming a more profit-making product, and because of its “menor oferta”  soya-bean prices has gone up.

    The predominance of soya bean production in Brazil can be as hazardous as that of a future corn predominance. The reason soya  has a predominance is the same that is causing the expansion of corn. It is because when it comes time to plant the producer will look at profit margin. Since european (Pac)  subsidies  distort prices and make many crops economically unsustainable for farmers in other countries then they must choose among the few crops that do not suffer from these subsidy distortions. In Brazil's case soya is the main one. Due to corn-based ethanol production maize will be the next victor in this ocean of subsidized irrationality.

What if the same scenerio outlined here happened to our beans and rice or to another important domestic consumtion ? Our projetc will talk about how this profitable domestic maket can be affected by these biofuels and its importance in the global  market  and it will substantiate a probable priorization of these domestic producs by its producers.

     The bio-fuels are not what cause the effect. The subsidies given to bio-fuels are what cause the effect, the distortions. Bio-fuels are just the latest comodities to suffer the effects of subsidy caused distortions.

     The same scenario could happen to any crop, not just the main staple of one country or another. The question here, at least to me, is cause and not consequence. The cause is know and has been know fir a long time, they are subsidies. The problem is Europe and America keep blaming the others subsidies and using them as an excuse to not get rid of them. Being that european subsidie are far greater than american subsidies ( both today and in the past) makes the europeans look even more pathetic when using this excuse.

      Maybe this link can be of use to you.

          http://www.cairnsgroup.org/