By Daryl James, Thunderbird Magazine editor
Decades before a massive oil discovery off the coast of Rio de Janeiro, Brazil turned its attention to the power of sugarcane. Today the developing nation consumes more ethanol than petroleum. Thunderbird School of Global Management Professor John Zerio, Ph.D., led a group of MBA students to Brazil in January 2011 to see the biofuel revolution firsthand. This five-part Brazil Winterim series follows the students on their journey to the plantations, mills and research centers driving alternative fuel innovation.
Chapter 5: Betting the Farm
One grower ahead of Brazil’s environmental and labor laws is Leotino Balbo Jr., a descendant of Italian immigrants who manages Sao Francisco Mill near Ribeirao Preto.
Balbo took control of the family sugar plantation in the early 1990s and quickly shook things up. Instead of growing with pesticides and fertilizers, he adopted organic farming methods. Instead of crop burning, he invested in expensive machinery that could handle the thick undergrowth. And instead of laying off workers, he retrained them for new jobs.
Family stakeholders and industry observers thought Balbo was crazy, but he persevered.
“I was a kid who used to chase birds and go fishing in the rivers,” Balbo says. “That love of nature has stuck with me since the beginning.”
When he started working on the family plantation, he saw the environmental damage from the chemicals and the burning. He searched for more sustainable solutions and then quietly began winning converts to his ideas.
“I started changing small things and then bigger things,” Balbo says. “Whoever wants to conquer the world should start with a tennis ball.”
Balbo admits he did not know what would happen when he switched to organic farming. He literally bet the family business on one idea: “Whatever you give to the Earth, she will repay you.”
Production dropped 10 percent in the 1990s, and Balbo spent many restless nights worrying about the consequences. Then things began to change. The soil healed, wildlife returned, and sugarcane yields started climbing to new highs.
“Suddenly the system we implemented started bringing back results,” Balbo says. “Now we have lots of studies proving that in all respects — environmental and economic — this kind of production is much better than conventional.”
The same people who called Balbo crazy now call him visionary. “I am most proud that my uncles and father were humble enough to allow the second generation of the company to promote this change,” Balbo says.
His eyes light up as he shares the story with his Thunderbird guests, who visit his plantation Nov. 11, 2011. His PowerPoint presentation includes dozens of his own photographs, and Balbo describes each one with the fervor of a preacher delivering a sermon.
“I have more slides if you want to stay longer,” he tells the students after nearly two hours.
Several days later, when Zerio gathers his students together one final time in their hotel lobby in Rio de Janeiro, the group describes the Sao Francisco Mill visit as a course highlight. Zerio agrees. “That was outstanding,” he says. “You saw the future of the industry.”
Many questions remain as Brazil’s biofuel experiment reaches maturity. Barriers to international trade largely keep Brazilian ethanol out of the United States and other markets, but the potential for growth is immense. Competition from Petrobras and other oil companies will add pressure as Brazil taps into newfound oil reserves. And growth in developing countries will create uncertainty in global commodity markets.
“Brazil’s ethanol program has had major ups and downs,” Zerio says. “But over time the program has been consolidated. Today it practically has transformed the country, and the future looks good.”
|Brazil’s Organic Ethanol: Leontino Balbo Jr. of Sao Francisco/Grupo Balbo talks Jan. 11, 2011, during Thunderbird School of Global Management’s Brazil Winterim in Ribeirao Preto. View the video on YouTube or on China’s www.tudou.com (3:42).||CSR at Fibria Brazil: The children of Bate-Lata do PECA perform for Thunderbird students at a Fibria community center in Santa Branca, Brazil. View the video on YouTube or on China’s www.tudou.com (2:44).|
|Brazilian Politics: Thunderbird School of Global Management Professor John Zerio, Ph.D., speaks to MBA students Jan. 6, 2011, during the Brazil Winterim in Sao Paulo. View the video on YouTube or on China’s www.tudou.com (2:55).||Thunderbird Brazil Winterim: Narrator Marcela Cubas shows the sights and sounds of the 2011 Thunderbird Brazil Winterim with Professor John Zerio, Ph.D. View the video on YouTube or on China’s www.tudou.com (3:59).|