During the oil crisis of the seventies, Brazil has developed a successful program for gasoline substitution by ethanol (Proálcool). Nowadays the biomass accounts for 27% of total national energy consumed in Brazil and the ethanol participates with 40% of the total national fuel consumption of Otto cycle vehicles. In 2004, the National Program for the Production and Use of Biodiesel (Biodiesel Program) was launched. One priority of the Biodiesel Program is the inclusion of family agriculture and smallholders into the production chain. The Federal University of Viçosa (UFV) has developed a software for the analysis of biodiesel projects with the participation of family agriculture. Results of production chain analysis and economic indicators calculated by the Biosoft system have allowed identifying the regular supply of oil at competitive prices as the key point to the efficiency of biodiesel production chains. The use of oil cake as feedstock is the leverage point of chain performance. The meal sale can lead to a vegetal oil price reduction, without compromising farmers´ income, since they can be able to set up their own oil extraction plants. Coordination is then the critical element and has the potential to improve the performance of both the biodiesel industry and the animal production chain.


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