Rural areas in the southern region of Brazil are primarily occupied by smallholder farms where a variety of food crops are cultivated. Sugarcane is one of the most common food crop in this region because it is used in animal feed and as feedstock in production of brown sugar, schimier, sugarcane syrup, cachaça, and hydrous ethanol fuel (HEF). This study evaluated a small farm in a basalt hill region of Rio Grande do Sul state, Brazil. The raw material was processed in a family agro-industry with small-scale HEF production and food products from sugarcane. The study was based in an average cultivation area of 15 ha. In industrial stage, an economic assessment was developed according to operational diversity of industrial production (HEF and food products). Payback for production of brown sugar, sugarcane syrup, schimier, and cachaça, were 0.53, 0.36, 0.77 and 3.85, respectively, whereas HEF was not economically viable. This study demonstrated that small-scale sugarcane production can be economically and environmentally attractive. This is because the technologies necessary for agricultural cultivation and industrial processing are simplified, the process is capable of generating a range of marketable products, and the wastes (specially bagasse) can be reutilized in the agro-industrial process. The proposed model has potential to be utilized in regions with similar characteristics as those considered in this study.
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