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October 21, 2013

Brazil Sugarcane Producers Nearing Goal of Mechanical Harvesting

Sugarcane producers in Brazil have made steady progress in converting their operations from hand harvesting to mechanical harvesting. The push behind this conversion was a 2007 law in the state of Sao Paulo that prohibited the burning of sugarcane fields prior to harvest. For generations the practice of burning off of the dry leaves prior to harvest was necessary because the sugarcane was being harvested by hand. While the burning aided in the harvest process, it created a significant amount of air pollution and respiratory problems for residents in the region.

When burning was the common practice, much of the state of Sao Paulo was covered by a blue haze of smoke during the harvest season, which is generally from March to November. With mechanical harvesting, the burning is not necessary and in fact, leaving the leaves on the soil surface is very beneficial for controlling soil erosion and maintaining the fertility of the soil.

Under the new law, sugarcane producers in Sao Paulo were given until the 2014/15 harvest to eliminate the burning in fields where mechanical harvesting is possible. In fields where the slope of the land is 12 degrees or greater, the deadline for switching to mechanical harvesting is 2017/18. For areas larger than 150 hectares, 2014/15 is the deadline and for areas smaller than 150 hectares, the deadline is 2017/18. Subsistent farmers or small family farmers are exempt from the ban on burning.

In the state of Sao Paulo, 85% of the sugarcane is now being harvested mechanically and the goal of having nearly all the crop harvested mechanically is expected to be met by the deadline. Sao Paulo is the largest sugarcane producing state in Brazil responsible for over 50% of Brazil's total production.

This new mandate has been very good for companies that manufacture the mechanical harvesters and the related equipment such as tractors, haulers, and trucks. Over the last six harvest seasons, approximately US$ 4.5 billion has been invested in new machinery. According to the National Association of Vehicle Manufactures (Anfavea), 6,000 harvesters were sold in 2012 and that is expected to increase to 9,000 units in 2013.

Case IH is one of the principal manufactures of sugarcane harvesters and they reported a 62% increase in harvester sales during the first half of 2013 and a 53% increase in tractor sales. For all equipment sales, Case IH reported an increase of 75% during the first half of 2013 compared to an increase of 40% for the sector in general.

While switching to mechanical harvesting has been good for producers, the environment, and the health of the local population, its impact on the local labor market has been more mixed. The mechanical harvesting has eliminated tens of thousands of jobs for low skill cane-cutters, but it has increased the demand for higher skilled equipment operators and technicians needed to maintain the equipment.