Small farmers to join Brazil sustainable cane move

SAO PAULO (Reuters) - Dozens of small and medium-scale farmers in Brazil's Sao Paulo state will grow sugar cane certified as meeting strict social and environmental standards, the region's cane producers association said late on Thursday.

Several ethanol companies like Cosan and Louis Dreyfus signed deals to produce and export verified sustainable ethanol in the last couple of months to address consumers' concerns over the impact of ethanol which powers almost all the country's new cars.

But now some of the state's small producers in the world's top sugar cane producer will be able to join them.

"We want to have a product with total traceability, from cane seeding to the final product. We believe there's a market for this kind of product, especially in Europe," said Fernando Cesar Gregorio, head of the Bariri Sugarcane Suppliers Association.

The sustainability of Brazil's cane-based ethanol has been called into question by Europe, which is likely to demand stricter environmental and labor standards on imports.

The program will have 50 small and medium-scale cane suppliers who farm up to 3,500 hectares and produce an estimated 260,000 tonnes of cane per year. Some of them are family farmers.

They must refuse the use of child or slave labor, limit their use of agrochemicals, and gather their cane with mechanical harvesters as opposed to cutting it manually. Manual cutting involves burning the plant's foliage, which pollutes the air.

Production standards, which will come into force on August 30, were set by Organizacao Internacional Agropecuaria (OIA), a private company which provides inspection and certification services.

All of the cane supplied under the plan will be crushed at the Dela Colletta mill which will also produce according to these standards. The entire process will be audited by an independent company.

Some of the requirements -- many of them set by law -- are already observed by these producers, but they want to certify "they are doing it right," Gregorio said.

Jose Carlos Reis, agroenergy coordinator at Sebrae, a consultancy for small and medium firms which will provide technical assistance to the growers, said this was the first time small-scale growers were offered the chance to join an environmental and social certification program.

The program also encourages alternating the planting of cane with grain to boost food production and avoid problems associated with monoculture, which can exhaust soil fertility.

"Many people say sugar and ethanol are only for large-scale producers, and we're showing this is not true. These are small suppliers who are organized and looking ahead," Reis said.

Gregorio added no deal had yet been clinched with any foreign importers, but he said certified biofuel was likely to attract a premium as it would be more marketable.

(Editing by Reese Ewing and Jim Marshall)