Assessing the relationship between sugarcane expansion and human development at the municipal level: A case study of Mato Grosso do Sul, Brazil

Abstract

Brazil has a long history of sugarcane development and since the 2000s has undergone a significant increase in land cultivated with sugarcane. Policy-driven demand and a growing international market mean that sugarcane cultivation in Brazil is expected to increase in the coming years. Rising land prices and strengthened environmental legislation in São Paulo state – where the bulk of production occurs – have led farmers and investors to seek new land to cultivate. As a result, the Centre- West region, including the state of Mato Grosso do Sul, has become an epicentre for sugarcane expansion in Brazil. While the social, economic and environmental impacts of sugarcane have been well documented for the state of São Paulo, much less is known about these impacts in new sugarcane frontier regions. This paper addresses an important gap in the literature through an assessment of the relationship between human development and presence or absence of a sugar mill in municipalities in Mato Grosso do Sul. Drawing on the UN Human Development Index and the Social Responsibility Index of São Paulo, this paper develops a method to examine the relationship between the presence of sugarcane processing mills and human development at the municipal level in Mato Grosso do Sul. The paper finds evidence that municipalities with a mill perform relatively better in terms of human development than those without, but that municipalities with mills already performed relatively better than those without. This raises important questions about how are and where the socio-economic benefits of sugarcane materialise.