By gas high price resource save

No one but an oilman likes oil. Brazil's farm managers agree. So much so that they have been willing to fly a new alcohol powered crop duster illegally in big agribusiness states like Mato Grosso.

Paulo Urbanavicius, until recently director of Industria Aeronautica Neiva, says that to save money on gas prices, farmers could no longer wait for the Brazilian government to approve the model EMB 202 Ipanema crop duster for flight and have been willing to break the law to fly on much cheaper ethanol. The price of gas is about US$1.30 per liter in Mato Grosso, Urbanavicius says. "They can get alcohol for a quarter of the price." New director Acir Luiz de Almeida Padilha Junior replaced Urbanavicius in June. Neiva is a subsidiary of the aerospace firm Embraer, one of Brazil's homegrown multinationals.

The Ipanema, named after one of the most popular strips of beach in the world, is already spraying crops in Brazil on a conventional, gas-powered motor. All Neiva intends to do is add a converter kit to the small plane's engine that will allow it to fly on sugar-cane alcohol. Alcohol power is not a new concept in Brazil. Brazilian carmakers have even taken their own hybrid to market this year. The new "flex-power" car, which runs on either gasoline or ethanol, is Brazil's version of the Japanese carmakers' gas-electric model.

Most of the summer was spent trying to get certification from various government-affiliated bodies in accordance with federal aviation rules. The government was supposed to give Neiva's product its domestic market blessing in May. Then the date moved to the end of August.

Eighty crop dusters of various makes are waiting in the wings to have their engines made convertible to alcohol. Neiva intends to deliver 79 alcohol-ready Ipanemas to market by year's end and the company forecasts a market of 250 aircraft in the next five years unless gas prices drop drastically, making alcohol less attractive. The plane sells for $247,000, compared to $230,000 for gas-powered crop dusters.

Export value for the product is still in question. "We are looking at other markets," Urbanavicius says, "but the main market for Ipanema right now is Brazil."

Carlos Heitor Belleza, president of the National Union of Crop Duster Manufacturers (Sindag), says that Neiva's plane is as hot a commodity as Brazilian soybeans. "We've got about 20 million hectares of soy planted in this country and don't have the crop dusters available to service this land," Belleza says. "We need more planes, but that also raises costs and one never can predict the future price of soybeans. So we have to watch costs. Enter the alcohol-powered Ipanema."

Brazil is the second-largest market for crop dusters, with over 1,100 planes in use. (The United States is the largest crop-duster market.) But don't expect the idea to take off in the United States, Urbanavicius says. Crop dusters there are bigger and have a larger volume of spray than in Brazil. That means they have to carry more weight. In that case, gas is more efficient. Alcohol has less energy by weight than any other petroleum fuel, 6.5 kilocalories compared to 10.8 for gasoline.

Urbanavicius sees most of Ipanema's competition coming from terrestrial sprayers but owners of crop-duster service firm Viagro Vidotti Agro Aerea in Parana disagree. "Planes have many benefits," says Rolemberg Jesus Vidotti. Speed for one, he says, and the fact that planes can spread pesticides in the rain. Vidotti likes the Ipanema idea. He owns two of them, though without the convertible engine. He says as soon as it is legal, he'll convert his five-plane fleet to alcohol engines.

His competitors are already using ethanol engines in their fleet, stifling gas-powered competition like Viagro. "There is going to be demand for this thing as an export product, you can be sure of it" Vidotti adds, citing Argentina, another big soy producer. For now, it looks like those who will immediately benefit will be Embraer investors who get in early before Neiva's new fire-engine-red Ipanema truly hits the market.