With gasoline prices soaring, Brazilian drivers are finally getting a sweet ride from the country's long and costly effort to tank up on sugar.
In Brazil, the government requires its sugar-based ethanol be used as fuel or as a fuel additive. With ethanol selling for 72 cents a gallon at the pump, that requirement is a boon.
Gas-guzzling markets abroad also beckon.
Japan, for instance, has explored importing Brazilian ethanol, while Cargill proposes to move ethanol to a facility in El Salvador for finishing touches in order to qualify for duty-free export to the United States.
Brazilian Agricultural Minister Roberto Rodrigues, who owns a sugar plantation in the state of Sao Paolo, can hardly contain his enthusiasm over the growing interest in the biodegradable alcohol, which is generally distilled from corn or sugar.
"We don't want to sell liters, we want to sell rivers of ethanol," Rodrigues told a group of visiting journalists during a recent tour of his farm.
The roots of the Brazilian ethanol program stretch back to the 1970s, when oil shortages prompted Brazil's former military government to try to make the country more energy self-sufficient.
Huge government subsidies and tax breaks paid to develop technology, and government-funded research by the auto industry helped develop "flex cars," which are equipped with special motors that can switch between gasoline, ethanol and now, natural gas.
Ethanol has also played a key role in shaping Brazilian agriculture.
Brazil has quadrupled sugar production in the past 30 years, becoming the world's largest sugar producer, while offering some of the lowest prices anywhere.
Production costs on the Rodrigues plantation, for example, average 11 cents per pound. This is slightly higher than the 8-cent or 9-cent price for the small amount of world sugar not governed by preferential trade agreements but below the 16 cents to 20 cents per pound U.S. sugar producers pay.
Since the state of Sao Paolo has become a magnet for the world's farmers, agricultural ministers and agronomists, Rodrigues frequently plays host to international visitors on his plantation.
The advent of Brazil as an agricultural superpower and its victory over European sugar subsidies challenges the complicated world sugar-quota system, under which smaller and poorer developing countries can sell their sugar to the European, Japanese and American markets for preferential prices that average around 22 cents per pound. Only about 20 percent of world sugar trades freely at a price of 8 cents to 10 cents per pounds -- well below the average cost of production.
Brazilian officials and industrialists aim to eliminate tariff and quota barriers in more developed countries, targeting industries ranging from sugar to orange juice to ethanol.
U.S. officials have estimated the subsidies to the Brazilian ethanol industry from 1975 to 1987 reached $10 billion, but such subsidies ended about a decade ago.
"There was a time when developing the ethanol industry almost bankrupted this country," said G. Edward Schuh, a University of Minnesota economics professor who has worked off and on in Brazil since 1963.
More recently, however, a new round of tax breaks and technology advances have helped boost ethanol and sugar production.
At the Sugar Cane Technology Institute in Piracicaba near Ribeirao Preto, William Lee Burnquist, coordinator for research and development, said the state has 1.5 million acres planted in sugarcane and expects to add another 2.5 million acres in the next decade.
"There is a lot of synergy in producing ethanol together with sugar," Burnquist said. "Today we produce sugar at half the cost of the 1980s. It's very hard for the rest of the world to compete with the prices we have here."