"Brazil’s bioethanol is often held up as a model of sustainable biofuel production, and this appears to have been confirmed by a report released in October 2006 by the International Energy Agency’s Bioenergy Task 40, which analyses the international bioenergy and biofuels trade [4, 5]. The report concluded that, in general the production of sugarcane-based ethanol as currently practised in Brazil, is “environmentally sustainable.” Biofuels are rated in terms of energy balance, the units of biofuel energy produced per unit of input energy; and carbon saving, the percentage of greenhouse gas emissions prevented by producing and using the biofuel instead of producing and using the same amount of fossil fuel energy [6] (Biofuels: Biodevastation, Hunger & False Carbon Credits, this series). Sugarcane ethanol is estimated to have an energy balance of a staggering 8.3 on average, but could be 10.2 in the best case; far outstrips the energy balance of any other biofuel, especially those produced in temperate regions. The carbon saving at between 85 and 90 percent, is also bigger by a long way of any other biofuel."
http://www.i-sis.org.uk/BiofuelRepublicBrazil.php

Same site:
"A WWF report to the International Energy Agency in 2005 suggested that Brazil’s bioethanol programme reduced transport emissions by 9 Mt a year, but 80 percent of the country’s greenhouse gas emissions came from deforestation. A study found that while a hectare of land in Brazil grows enough sugarcane to make ethanol to save 13 t CO2 a year. But if natural forests were allowed to regenerate on the same hectare of land, the trees would absorb 20 t of CO2 every year."

Interesting that they claim a hectare of tropical forest absorbs 20 tonnes. There are 100 hectare per sq km.
And there is about 5 million sq kilometer of Amazon Rainforest- so it's absorbing per year, 10 billion tonnes of CO2.

Other stuff from some article:
"Soybean is certainly the most damaging choice – not just because it gives very low energy balance and carbon saving – but because soya monoculture is responsible for more Amazon destruction than any single other business, including cattle ranching or logging
....
So far, soya is mainly grown for animal feed to satisfy Europe’s demand for GM-free soya"

As for your question I believe using sugarcane is one of most efficient ways of making Biofuels. So, I think Brazil should continue and increase making Biofuels for sugar cane, and Europe should grow soybeans for their cattle instead of using the land to make Biofuels from corn because of stupid govt subsidies.