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Luiz Carlos Corrêa Carvalho, Caio

President of the Brazilian Association of Agribusiness and Director of Canaplan

OpAA75

Stability and confidence in public policies

“Time is not renewable”
Unknown author

The world champion of competitive biomass is Brazil. Several vintages in the same area, in the same year! 3% annual growth in productivity is very inspiring. In this competitive World Cup, judges are selected according to the interests of European countries, with some from other rich countries (and there is no video assistant referee). For emerging countries, these rules are aimed at protecting the richest so that they can prosper. Wars enforced the rules, and the world became poorer when it comes to agro products.

However, even with such rules, Brazil continues to break records in production and exports. After all, taking into account the results, it is understandable that they need to do something as a precaution (on the side of the subsidized competitor). The Europeans produced the Green Deal , and the Americans are preparing something. About that, it is up to Brazil to react to the narratives of the Brazilian agro, prepared by the European colonialists, which interest them (and which suffocate us).

Both the Green Agreement and the one that will come from the United States follow the line of ruling the world. Many attempts at this are made, but their success depends on the reaction of other blocs or countries. The Brazilian protagonism in relation to the “biomass world” is real and needs to be effective. This, without a doubt, requires a position taken by the State, a call to public-private effort and effective leadership by Brazil.

When it comes to global public policies, at the stage of multilateral international organizations (the United Nations, the World Trade Organization and the Organization for Economic Cooperation and Development, among others), the weakening of these entities requires a strong positioning of each country in the defense of what he deems right and pertinent.

Imagine a bloc of countries trying to impose a global public policy that goes against national public policies at its heart. Does it exist? Of course, the European Green Deal does not consider deforestation legal in its document. Imagine a block of countries trying to define a world policy based on their climate reality. Does it exist? Yes, the Green Deal treats the tropical world (the Latinos) as if it were the same for the temperate world (the Europeans).

Brazil will face this and will fight, even so, for the Agreement of the European Union, Mercosur. This means an important review, on the European side, of the unilateral way in which it wants to deal with a multilateral issue. While global policies show the relevance of dialogue, articulations aimed at peace and trade balance, it is essential that each country has stable public policies that generate fundamental trust for market agents.

The entire global effort, with formal approval carried out, is aimed at the fight against climate change and decarbonization, as an effective way of pursuing individual targets for mitigating greenhouse gas emissions, as well as maintaining actions in the trade that do not give space to the new protectionist, precautionist wave.

This line of thought, always defended by Brazil, requires commitments and stable internal policies. When looking at the younger “sister” of the Brazilian agro, bioenergy, there are many angles to check, if the country really wants to maintain its leading role in the theme. While ethanol has, together with biodiesel, the national renewable energy legislation, RenovaBio, to be followed, the public executive has the pen to threaten the stability of the development process of these productive chains.

In times of oil at 100 dollars per barrel, the public executive seeks measures to mitigate the impact of high prices on consumers. An entire effort that results, for example, in Provisional Measures (often unconstitutional, such as the recent extension of the exemption of the Social Integration Program, Contribution for the Financing of Social Security and Contribution for Intervention in the Economic Domain in fuels), or in reduction the level of blending of biodiesel in diesel, or even changing the price correction policy for these fuels without the knowledge of the sector actors. Import taxes are imposed or withdrawn, under pressure from countries.

During the Temer government, a series of actions were created, such as RenovaBio and Rota 2030, later regulated and confirmed in the Bolsonaro government, for a vehicle platform aimed at the integrated search for flexible and hybrid engines (fuels of the future), with the goal of green hydrogen in fuel cells. There was applause and action from the National Association of Motor Vehicle Manufacturers and bioenergy sector entities, but, again, it will depend on the new pen for 2023 to 2026.

Technological development, innovation and private actions are moving at an unprecedented frenzy. Certainly, they are generating impacts that the government and the legislature have difficulty adapting the rules of the game, many of them from the mid-20th century. An example of this is the digital world, the internet of things, the connectivity effort on farms in the country, the production of biogas or biomethane.

Along the same lines, the slow pace of approval of new chemical molecules or biological products to control pests, diseases and weeds in crops follows. Sugar cane marries corn, and obviously it's a new integration that the market loves, but the government takes time to adjust to it. It is necessary to integrate, but it is not easy to do so with the same theme being conducted by several Ministries of different ideological shades and political parties competing for space.

Global changes do not expect slow reactions and have no patience for delays. In the case of bioenergy, the confrontation is constant and needs the union of the efforts of the government and class entities in the planning and execution of the measures that stimulate , guarantee investments and modernize the public-private relations internally for the dialogue with third countries.

While the defense of multilateral international entities is fundamental to Brazil, the security of internal investments is fundamental to the competitive capacity of biomass, requiring stability and less government intervention in the rules of the game. In this way, while the commercial pendulum swings back to the East, for Brazil, it must be reflected that our roots are Western, and our world is based on democratic foundations.

This does not mean choices, it refers only to the international trade flow. It is hard to believe that the rich world continues to see autocracies grow, and world leaders (G7) find it difficult to seek dialogue, in the western world, balanced and sensible. Looking internally, the difficulty of the Brazilian governments is obvious, as they do not understand the agroenergy factor, its success and the need to treat it with stability, which attracts investment, on the path paved by confidence. In a world where decarbonization is a common priority, Brazil is at the forefront. It is enough, therefore, to better sharpen its positive detail to sectoral public policies.