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At the current rate of deforestation, the Amazon rainforests are expected to shrink by 40 percent of its present area by the year 2050. Brazil’s Cerrado is faring even worse with all remaining vegetation projected to be lost by 2030.
The root cause of this transformation lies in the global demand for ethanol. In March 2009, a bipartisan group of senators sought to lower U.S. tariffs on ethanol imports. So far, the impact of the U.S. thirst for Brazilian ethanol has been blunted by a subsidy paid to indigenous producers and a tariff on imported ethanol. If the U.S. entirely lifts the tariff, demand for ethanol will go through the roof and the pressure on the environment would be enormous.
Vast swathes of forest have been devastated to make way for fields of soybean and sugarcane, raw material used in the production of ethanol. But the Brazilian government and big agribusiness companies adamantly maintain that such expansion does not necessarily mean the end of forestland. They claim to plant on wastelands and pastures where cattle once grazed, improving the soil quality and productivity.
There is an element of truth in this, but environmentalists argue that while soy and sugarcane displace cattle and less lucrative crops, ranchers are moving farther inland. Sugarcane and soybeans play a crucial role in Brazil's agriculture, one of the most dynamic sectors of the country's economy. And both are under pressure to expand as a result of the ethanol boom.
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