Heterogeneity in the productivity of sugar-energy mills in Brazil

Abstract

The development of biofuels in Brazil, and particularly of ethanol as a sustainable energy source, has enabled the strengthening of the national sugar-energy industry. The objective of this study is therefore to evaluate the evolution of the productive efficiency of sugar-energy mills in Brazil during the period of 2006 to 2015, using data envelopment analysis and the Malmquist index and its decompositions. Our results indicate that no single nor well-defined pattern of efficiency or productivity existed among the mills in the industry during the period under study; instead, we found the industry to be heterogeneous in terms of management practices and technology adoption. Furthermore, we found that differences between mills intensified over the period, and that technologically poor mills with low levels of efficiency coexisted among efficient mills employing modern management practices and technologies. Finally, we found that productivity decreased, yet varied considerably over the analyzed period.