Under these conditions the Government decided to accelerate ethanol production thorough decree 76,593 of November 14, 1975 which is really the birth certificate of the Brazilian “Alcohol Program.” The idea was to reduce gasoline consumption

and therefore decrease oil imports. Production goals were set at three billion liters of ethanol in 1980 and 10.7 billion liters in 1985.

This decree determined that very generous financing terms were to be offered to entrepreneurs through Government banks[1] and that the price of ethanol should be on a parity with sugar 35% higher than the price of 1 kg of sugar.[2]

The decree made the production of ethanol and the production of sugar equally attractive to the entrepreneurs. This opened the way for the increase in the produc­tion of ethanol which happened indeed as seen in Fig. 2.

Production increased from 600 million liters/year in 1975/1976 to 3.4 billion liters per year in 1979/1980. This corresponded to 14% of the gasoline used in 1979.