Sugaronline Editorial - The power of the pen By Meghan Sapp
Published: 12/15/2017, 2:45:00 PM
RenovaBio has made it through the lower house and Senate in record time, but the president still has to sign it.
English author Edward Bulwer-Lytton made famous the notion that the pen is mightier than the sword. Not only in diplomacy but also in economics, the pen - or the person wielding it - has the ability to make kings or paupers. And in this case, the pen-wielder is none other than the President of Brazil.
In record breaking time, Brazil's lower house and then Senate were able to not only introduce but also pass legislation that could turn the country's sugar and ethanol industry completely around, driving more investment and production and expansion and all around recovery as it looks to implement the ambitious RenovaBio program through 2030 and beyond.
Not since ProAlcool has the country's sugar industry had such an opportunity to pick itself up and get itself back on track, leading the world once again in sugar and ethanol, but also electricity and the bioeconomy in general. It needs the push. As many as 18% of the country's mills aren't likely to open next year because of their own poor financial state and the inability to make the numbers work enough to justify crushing, so the new policy should usher in a new wave of M&A in the sector to get everything back into shipshape.
All that is needed now is for the president to put pen to paper. It may sound over dramatic, but the fate of literally tens of thousands of people, hundreds of businesses - perhaps thousands as well - and the fate of the country's sugar if not agri economy rests on his decision. There are concerns about the vast number of questions still to be answered such as inflationary impacts from the renewable credits scheme and regulations to be sorted out that will make RenovaBio a reality and not just a pretty piece of paper, but most ambitious plans started out like that, from the New Deal to the Paris climate agreement.
And it's just in time, too. With the global sugar market swinging back into surplus yet again, the more that Brazilian sugar mills can divert to ethanol - ethanol that has a market and is competitive - the better for everyone.