 Brazilian agro-industry has achieved an important role in the Brazilian economy in recent years. With growth rates in the region or 5%, the dynamism of the market is due to factors such as increases in agricultural harvest, exports and international prices. But to arrive at this point, agro-industry has traveled a long road, especially in the sugar and alcohol markets.
At the end of the 18th century, competition from sugar beet in Europe and sugar cane from the Antilles and Cuba threatened the leading position of northeastern Brazil, which was a major sugar producer. At the same time sugar cane cultivation regained importance as an economic activity in São Paulo, migrating from the coast to the fertile purple soils of the countryside.
Although São Paulo’s economy was focused on coffee from the end of the 19th century, sugar production continued to grow until 1929 when the Wall Street crash shook world markets, strongly affecting the Brazilian economy based on coffee. Sugar cane was similarly affected.
As part of the efforts for Brazilian recovery, the government of the then president Getúlio Vargas, created the Sugar and Alcohol Institute (IAA). Production quotas and strict standards were established for all stages of the process of production and marketing of the products on domestic and foreign markets.
From mill to factory
The sugarcane production mill actually consisted of several buildings, each intended for a particular phase of cane processing. In the Grinding House, the cane was crushed by cylinders powered by a water wheel or teams of oxen, producing sugar cane juice. The juice was then transported by slaves to the Furnace House to be concentrated in large copper vats and transferred to the molds where the sugar crystallized. In the Cleaning House the waste was purified and divided into pieces known as sugarloaves.
On the domestic market, sugar was sold in the form of these sugarloaves. For the foreign market, however, the sugarloaves were broken, ground down and dried in the sun. The sugar thus obtained was packed into boxes and proceeded to the ports.
Modernization of the sector
 The economic crisis of 1929 led to creation of the Sugar and Alcohol Institute (IAA), whose function was to control production to maintain prices at an adequate level, protecting the Brazilian product on the world market. To achieve its ends, the IAA established a strict system of quotas, which were divided between the different production units. In other words, each mill could only produce a certain amount of sugar. With strict control of prices and production, the only way to maintain lucrative business was to reduce costs and increase productivity.
It was therefore practically inevitable that production should become concentrated in large factories with the capacity to mill thousands of tonnes of cane per day. Since then, the sugar agro-industry has undergone a continuous process of modernization, with companies grouping together in search of greater output from cultivation and reductions in costs.
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