The Meeting with the Governor...NOT!

FRIDAY, JANUARY 16—Well, they said it’s rainy season in Brazil. This morning proved it. Woke up to a driving torrent, which we feared would force us to sit in the hotel (and this ain’t no Hilton) for most of the morning. Ask Randy Klein about the roach in his room that he could have saddled up!

PHOTO 1: A Brazilian Chevy dealer discusses engine performance with the team.

But once our pilots, Carlos and Leandro, got to the airport, they determined we could take off. And so we did. Fingers crossed.

PHOTO 2: Jim Robbins and Paul Taylor check out the engine on a flex fuel vehicle at a Brazilian Chevrolet dealership.

Turned out to be an uneventful one-hour flight south to Cuiabå, (koo-ya-BAH), a city of some 525,000. Along the way we flew over dozens and dozens of swine and poultry operations. At one point, we counted enough poultry buildings within about a 10-square mile area to house some 10 million birds.

Once we got checked in, we held a debriefing meeting to catch up on what we’ve learned and seen—and what that means in terms of initiatives and responses once we get back home.

After a great lunch at a churrascaria (traditional Brazilian barbecue), we visited a Chevrolet automobile dealership. We learned more about the vehicles that run on 100% ethanol and Gasoline C (25% ethanol).

• A one-liter engine is popular here, and it’s quite small. On 100% ethanol, the engine achieves 70 Hp; on Gasoline C (25% ethanol) it’s 50 Hp. On a 2.4 litre engine, the difference in Hp is not as great: 147 Hp on 100% ethanol and 140 Hp on Gasoline C.

• There is a small gasoline canister under the hood. This fuel is used to start the engine in cold weather—cold here defined as 14 degrees Celsius. That’s about 57 degrees Fahrenheit. Not Corn Belt cold by any means. The engine uses the gasoline automatically when needed using computer sensors that know when the temperature point is met.

• In the U.S., our flex fuel vehicles run on up to 85% ethanol and 15% gasoline. In Brazil, they can run on 100% ethanol, but it’s ethanol with a difference. It has water in it. The ethanol producers in Brazil do not use the final “molecular sieve” process to remove the last bit of water like we do in the U.S. As a result, Brazilian ethanol has water in it when it leaves the plant. And apparently, the engines have been engineered to match this product.

• Because of the water in the fuel, the fuel delivery system in the vehicle has to be water-resistant.

• According to this dealer, all Chevy vehicles sold in Brazil are now flex fuel.

Back to the hotel to freshen up and change clothes for our visit to the Governor. But there’s a hitch. The Governor will not be available. So we end up meeting with Alexander Torres Maia, his chief of staff, a former military officer. While we were disappointed that we were not going to meet with the legendary Governor Maggi, Alexander spoke very good English and had a decent grasp on the issues in which we were interested, so our meeting was productive.

(We dressed in business attire for this meeting. So we were a bit surprised when the Governor’s chief of staff arrived wearing an untucked shirt and blue jeans. Guess what. They have “casual Friday” in Brazil, too.)

You’ll recall that the Brazilian state we are in is Mato Grosso (Big Forest), with a population of 2.7 million—and the leadership of this state knows that agriculture is the primary driver of their economy and thus offers the greatest opportunity for development. What we saw at Lucas do Rio Verde was no accident—it was a conscious, planned effort to capitalize on the area’s strengths and attract investment from agribusiness and others. Similar initiatives are currently underway in other areas of Mato Grosso.

PHOTO 3: Alexander Torres Maia, chief of staff to Mato Grosso Governor Maggi, gestures during a comment on the state's environmental initiatives.

Governor Maggi is in the middle of his second term, which expires in 2010. He is also the largest soybean farmer in the world. Most of his land is on the west side of the state, but he recently bought land east of the forest in John Carter’s area. Alexander said that Maggi’s background as a farmer and businessman has been a plus, but he expects the next governor to continue this emphasis on agricultural as a means for economic and social development. “We are not growing corn and soybeans,” Alexander said. “We are growing food. And by doing that, we are growing prosperity.”

PHOTO 4: Maia points out details on a map of his state to the group. Paul Taylor of Illinois looks on.

Some other high points from the discussion:

• The Brazilian government has a special secretary/agency focused on small farms—defined as five hectares or less. There are some 150,000 farmers who fit this criteria with many of them located in the southwest corner of the state. The agency works to develop and support farmer cooperatives, provide technical assistance, etc.

• In terms of environmental regulations, Mato Grosso is more restrictive than the federal government in many instances. For example, the federal government requires a 30 meter buffer along waterway, while Mato Grosso require 50 meters.

• Contrary to what we heard at the biodiesel plant, there are strict air quality standards related to agriculture and biofuels production.

• Less than one percent of the total area of Mato Grosso is used to produce soybeans.

• The focus is one increased efficiencies. For example, with cattle production, the current average is one animal per hectare of land. The goal is to reach five animals per hectare through improved pasture and management practices. Two things are of interest here: 1) By improving efficiency, Brazil can make more and better use of existing hectares and thus reduce pressure on the forest; and 2) Brazil actually has a goal and a plan—complete with objectives and measurable results.

• Mato Grosso is divided into three environmental regions (biomas) from north to south: In the Amazon bioma, a land owner is required to set aside 80% of the land—with no improvements, production or destruction of any kind to take place on the set aside. In the “cerrado” or savanna bioma, the set aside is 65%. And in the southern “pantanal”, the only agricultural production allowed is cattle.

• Next to health and education, which are largely driven by federal requirements, environmental activities are the largest portion of the Mato Grosso state budget. Satellite imaging and monitoring of land use changes are a constant effort.

The meeting closed with a discussion on how the two countries might work together to address the media attacks on the biofuels industry, deforestation and land use, and other issues on which we share a common interest and objective.

All of us left this meeting looking at our own states and, to some degree, committed to encouraging our state leaders to support agriculture with the same enthusiasm, investment and most importantly, strategic plan and vision, that we have seen in Mato Grosso.