INSIGHTS SUGARCANE’S ROLE IN FUELING THE ECONOMY

The document reports that the expansion of sugarcane mills in Mato Grosso do Sul between 2005 and 2012 led to significant local economic growth, including a 30% GDP increase within three years of mill arrival. This growth was characterized by a shift in land use from cattle pastures to sugarcane, increased productivity in other crops like soybean and corn, and a reduction in average deforestation by 6.3 thousand hectares. The expansion also stimulated the labor market, increasing overall employment by 40% and expanding access to financial services and rural credit.

• The arrival of sugarcane mills significantly boosted the economic structure of rural municipalities, resulting in a 30% GDP increase within three years. This growth was driven by gains in agriculture (65%), industry (45%), and services (13%), while also triggering a 10% population increase and a 31% rise in tax revenues.
• Sugarcane expansion induced a shift in land use from cattle pastures to sugarcane crops. In municipalities with new mills, cattle herds decreased by an average of 27,000 heads, and ranching employment declined.
• The presence of mills contributed to a reduction in deforestation, with an average decrease of 6.3 thousand hectares three years after mill arrival. This may be due to higher productivity reducing the need for land expansion or increased environmental scrutiny of large companies.
• The expansion positively impacted the labor market and financial infrastructure. Employment rose by 40%, aggregate wages grew by 49%, and the number of businesses per municipality increased by 82% (an average of 186 new businesses). Additionally, private deposits grew by R$4.8 million (103%) and rural credit increased by R$18.5 million (77%).
• The growth of support industries driven by the mills improved the supply of agricultural inputs and services, which contributed to productivity gains in other crops such as corn and soybean.

APA

Assunção, J., Pietracci, B., & Souza, P. (2016). INSIGHTS SUGARCANE’S ROLE IN FUELING THE ECONOMY. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2016/07/Insights_Sugarcanes-Role_in_Fueling_the_Economy.pdf

Chicago

Assunção, Juliano, Breno Pietracci, and Priscila Souza. INSIGHTS SUGARCANE’S ROLE IN FUELING THE ECONOMY. Climate Policy Initiative, 2016. https://www.climatepolicyinitiative.org/wp-content/uploads/2016/07/Insights_Sugarcanes-Role_in_Fueling_the_Economy.pdf.

Wikipedia

{{cite report |last1=Assunção |first1=Juliano |last2=Pietracci |first2=Breno |last3=Souza |first3=Priscila |title=INSIGHTS SUGARCANE’S ROLE IN FUELING THE ECONOMY |publisher=Climate Policy Initiative |date=July 2016 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2016/07/Insights_Sugarcanes-Role_in_Fueling_the_Economy.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{assuno2016insights, author = {Assunção, Juliano and Pietracci, Breno and Souza, Priscila}, title = {{INSIGHTS SUGARCANE’S ROLE IN FUELING THE ECONOMY}}, institution = {Climate Policy Initiative}, year = {2016}, month = jul, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2016/07/Insights_Sugarcanes-Role_in_Fueling_the_Economy.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }