STWR - Share The World's Resources

Biofuel policies and subsidies should be urgently reviewed in order to preserve world food security, protect poor farmers, promote broad-based rural development and ensure environmental sustainability, according to a major report by the FAO. 

7th October 2008 - UN Food and Agriculture Organisation

Link to the Report: The State of Food and Agriculture 2008 - Biofuels: Prospects, Risks and Opportunities

Biofuel policies and subsidies should be urgently reviewed in order to preserve the goal of world food security, protect poor farmers, promote broad-based rural development and ensure environmental sustainability, FAO said today in a new edition of its annual flagship publication The State of Food and Agriculture (SOFA) 2008.

“Biofuels present both opportunities and risks. The outcome would depend on the specific context of the country and the policies adopted,” said FAO Director-General Jacques Diouf today. “Current policies tend to favour producers in some developed countries over producers in most developing countries. The challenge is to reduce or manage the risks while sharing the opportunities more widely.”

Biofuel production based on agricultural commodities increased more than threefold from 2000 to 2007, and now covers nearly two percent of the world’s consumption of transport fuels. The growth is expected to continue, but the contribution of liquid biofuels (mostly ethanol and biodiesel) to transport energy, and even more so, to global energy use will remain limited.

Despite the limited importance of liquid biofuels in terms of global energy supply, the demand for agricultural feedstocks (sugar, maize, oilseeds) for liquid biofuels will continue to grow over the next decade and perhaps beyond, putting upward pressure on food prices.

Opportunities for the poor

If developing countries can reap the benefits of biofuel production, and if those benefits reach the poor, higher demand for biofuels could contribute to rural development.

“Opportunities for developing countries to take advantage of biofuel demand would be greatly advanced by the removal of the agricultural and biofuel subsidies and trade barriers that create an artificial market and currently benefit producers in OECD countries at the expense of producers in developing countries,” Diouf said.

Other policy measures driving the rush to liquid biofuels, such as mandated blending of biofuels with fossil fuels, as well as tax incentives, have created an artificially rapid growth in biofuel production. These measures have high economic, social and environmental costs and should also be reviewed, according to the report.

Food security

Growing demand for biofuels and the resulting higher agricultural commodity prices offer important opportunities for some developing countries. Agriculture could become the growth engine for hunger reduction and poverty alleviation.

Production of biofuel feedstocks may create income and employment, if particularly poor small farmers receive support to expand their production and gain access to markets. Promoting smallholder participation in crop production, including for biofuel, requires investment in infrastructure, research, rural finance, market information and institutions and legal systems.

Among the risks, however, food security concerns loom large. High agricultural commodity prices are already having a negative impact on developing countries that are highly dependent on imports to meet their food requirements.

Particularly at risk are poor urban consumers and poor net food buyers in rural areas. Many of the world’s poor spend more than half of their incomes on food. “Decisions about biofuels should take into consideration the food security situation but also the availability of land and water,” Diouf said. “All efforts should aim at preserving the utmost goal of freeing humanity from the scourge of hunger,” he stressed.

Greenhouse gases

When looking at the environmental dimension, the balance is not always positive. “Expanded use and production of biofuels will not necessarily contribute as much to reducing greenhouse gas emissions as was previously assumed,” the report finds. While some biofuel feedstocks, such as sugar, can generate significantly lower greenhouse gas emissions, this is not the case for many other feedstocks.

The largest impact of biofuels on greenhouse gas emissions is determined by land-use change. “Changes in land use – for example deforestation to meet growing demand for agricultural products – are a great threat to land quality, biodiversity, and greenhouse gas emissions,” Diouf noted.

Sustainability criteria based on internationally agreed standards could help to improve the environmental footprint of biofuels, the report states, but they should not create new trade barriers for developing countries.

Second generation

The next generation of biofuels currently under development but not yet commercially available, using feedstocks such as wood, tall grasses, forestry and crop residues, could improve the fossil energy and greenhouse gas balance of biofuels.

“There seems to be a case for directing expenditures on biofuels more towards research and development, especially on second-generation technologies, which, if well designed and implemented, could hold more promise in terms of reductions in greenhouse gas emissions with less pressure on the natural resource base,” Diouf said.

Link to original source 

UN Says Biofuel Subsidies Raise Food Bill and Hunger

7th October 2008 - Elizbeth Rosenthal, New York Times

A United Nations food agency called on Tuesday for a review of biofuel subsidies and policies, noting that they had contributed significantly to rising food prices and the hunger in poor countries.

With policies and subsidies to encourage biofuel production in place in much of the developed world, farmers often find it more profitable to plants crops for fuel than for food, a shift that has helped lead to global food shortages.

Current policies should be “urgently reviewed in order to preserve the goal of world food security, protect poor farmers, promote broad-based rural development and ensure environmental sustainability,” said a report released here on Tuesday by Jacques Diouf, the executive director of the United Nations Food and Agriculture Organization.

In releasing the report, the United Nations joined a number of environmental groups and prominent international specialists who have called for an end to — or at least an overhaul of — subsidies for biofuels, which are cleaner, plant-based fuels that can sometimes be substituted for oil and gas.

In a devastating assessment released this summer, the Organization for Economic Cooperation and Development concluded that government support of biofuel production in member countries was hugely expensive and that it “had a limited impact on reducing greenhouse gases and improving energy security.” It did have “a significant impact on world crop prices” by helping to raise them.

“National governments should cease to create new mandates for biofuels and investigate ways to phase them out,” the Organization for Economic Cooperation and Development concluded in its report. The organization includes European countries, the United States, Canada, Japan and Australia.

Still, Willy de Greef, secretary general of EuropaBio, a biotechnology industry group, said the world possessed the land and agricultural ability to produce enough food and fuel through subsidy programs.

“Of course these policies have to be developed with high quality sustainability criteria,” he said. But he added that that should include consideration of the fact that biofuels could help reduce poverty. “The development of biofuels will in fact create new revenue options for farmers all over the world, including poor farmers,” he said.

In the past eight years, as oil prices and concerns about carbon emissions have increased, a number of countries, including the United States, and the European Union have put into place subsidies and incentives to energize the fledgling biofuel industry.

As a result, the production of biofuels made from crops that could also be used for food increased more than threefold from 2000 to 2007, the Food and Agriculture Organization said. Support to encourage biofuel production in Organization for Economic Cooperation and Development countries amounted to more than $10 billion in 2006, the organization said.

But a host of studies in the past year concluded that the rush to biofuels had some disastrous, if unintended, consequences for food security and the environment. Less food is available to eat in poor countries, global grain prices have skyrocketed and precious forests have been lost as farmers have created fields to join the biofuel boom, the studies said.

Worse still, specialists say, so much energy is required to convert many plants into fuel that the process does not result in a savings of carbon emissions. The O.E.C.D.’s report said only two food-based fuels were clearly environmentally better than fossil fuels when considering the entire “life cycle” of their production: used cooking oil and sugar cane from Brazil. Sugar cane is far easier to convert to biofuel than most other crops.

Already this year, the European Union has stepped back from its target of having 10 percent of Europe’s fuel for transportation come from biofuel or other renewable fuels by 2020.

Last month, the European Parliament suggested that only 5 percent come from renewable sources by 2015, and that 20 percent come from new alternatives “that do not compete with food production.”

Mr. Diouf of the Food and Agriculture Organization stopped short on Tuesday of suggesting that the world end biofuel subsidies. Rather, he said they should be revised to direct the benefits to developing nations.

Link to original source

Subscribe to this comment's feed

Write comment