Agriculture and poverty alleviation

One of the biggest debates around bioenergy-sector development is the concern over food security with fuel crops replacing food crops. More than 800 million people today go hungry - not because the world does not produce enough food, but because they are too poor to buy it. Meanwhile, the rich in industrial and developing nations have the buying power to make sure that sizeable amounts of land are used to cultivate animal feed, and then buying it 'processed' as meat and dairy products. This situation is transferable to bioenergy crops.

Maize, soybeans, sugarcane and other crops can serve as biofuel feedstock, as animal feeds or as food for human consumption. As energy prices increase, producers exploring multiple markets may respond by shifting existing output of maize or soy from food/feed to fuel use. Or they may shift production from food/feed to non-food plants (for instance Jatropha). In both cases, increased prices and reduced supplies may have adverse effects on the poor and hungry, particularly in net food-importing countries. The actual situation, however, is somewhat more complex.

Recent increases in ethanol production from corn in the US led to a 400 per cent rise in the price of tortillas in Mexico, the staple food for the poor, since cheap corn imports from the US disappeared from Mexican markets. However, it is important to point out that the problem did not start with bioenergy, but with forced agricultural market liberalization and the integration of agriculture within global markets. Countries became net food-importing countries and have lost their food sovereignty resulting from this, not because of bioenergy. Only ten years ago, before the North American Free Trade Agreement (NAFTA), there was no US corn on the Mexican market. Cheap subsidized US corn exports destroyed the livelihood of many Mexican farmers. The small-scale agricultural sector in many developing countries has been destroyed or negatively affected by the dumping of subsidized agricultural products from European countries and the US. Small-scale farmers were and continue to be driven out of business, leading, in turn, to the migration of rural communities into urban areas. The dumping rates into other markets for some agricultural products from the EU to developing countries includes wheat (29 per cent), milk (42 per cent), sugar (56 per cent), poultry (26 per cent) and rice (26 per cent).

If bioenergy development in the EU and the US leads to reduced surpluses and less agricultural exports to developing countries, then this is certainly good news for farmers in developing countries. It is not necessarily good news for poor people who are not farmers but have to buy their food. Agriculture exports from the EU and the US have kept world market prices of a number of crops, such as maize, artificially low. When they are removed, prices for these crops will go up. In parts of the world such as Southern Africa, which is exacerbated by droughts and climate change, the effect may be high. Countries that import food are faced with price increases resulting from higher demand for certain crops. At the same time, food production in these countries becomes economically more viable and attractive. If managed well, bioenergy could promote something akin to an agricultural 'renaissance' in some developing countries where bioenergy can be produced profitably and also stimulate rural economic growth. Bioenergy can create jobs and protect incomes and livelihoods if it is decentralized and processed regionally, so that the added value stays in the region. Decentralized production of bioenergy holds a lot of potential, particularly in the case of raw materials such as Jatropha, castor oil plants and biogas, which can be converted into energy through simple technologies that can be easily installed on site and, as in the case with Jatropha, can be grown on marginal lands or through intercropping. The amount of arable land that is currently left idle because 'farm prices' are too low and that would come back into production with substantial increases of 'farm prices' can only be guessed, but it should not be underestimated.

The opposing model is a focus on liquid biofuels for export, which usually requires large areas for monocultures and a much higher grade of technology. Experiences with cash crops (including feedstock) in developing countries show that highly technical industrial cultivation methods need comparably large cultivation areas. In this case the land required will most probably be controlled by large landowners or companies. Large production units can also create jobs; but they usually simultaneously displace existing structures and thus create conflicts with access to land and water as well as the requirements of diversified agriculture driven by family businesses, co-operatives and rural communities aiming at supplying food and income for the local population, thus creating much more social inequity and poverty. The greater the commercial interest becomes, the greater the pressure from large-scale industry will be - akin to soy cultivation in Brazil. This could be the same in the case of bioenergy since production is linked to the land and there is no 'free' land. However, while we can probably make sure by regulation that bioenergy development will not increase social problems in developing countries with a large cash crop sector, it would at the same time be unrealistic to expect bioenergy production to meet higher standards than the rest of a country's agriculture.

It is, indeed, imperative to look at the place of bioenergy crops in agricultural markets as a whole in order to assess the impact that bioenergy production will have. The image of large-scale monocultures destroying Southern livelihoods and ecosystems for the production of some luxury items for export to European and other rich markets is far more appropriate for animal feed than for biofuels. Brazil's annual feed exports are about 35 million tonnes (up from 15 million tonnes in 1999), almost exclusively soya, and this represents about 55 per cent of Brazil's total agricultural exports. The value of these animal feed exports is about US$7.9 billion; 18.5 million hectares are under soy cultivation in Brazil. Almost half of Brazil's soya production is exported. Germany alone imports so much soy from Brazil that you can literally say 2 million hectares in Brazil are allocated for German meat consumers, a figure that corresponds to 10 per cent of German agricultural land. Despite these enormous animal feed imports, 85 per cent of German agricultural land is devoted to meat and dairy production. The world can feed every human being, as well as provide enormous amounts of bioenergy, but probably not if today's excessive consumption of cheap meat is expanded.

Compared to these massive figures, sugarcane production for ethanol in Brazil occupies currently 6 million hectares, and the potential for an increased 20 per cent export potential therefore represents 1.2 million hectares. This clearly shows that if there is an international market driving deforestation and unsustainable agricultural practices in Brazil, then it is animal feed and the demand for meat, and not biofuel production, which are responsible. Put simply, 1 million hectares in Brazil are occupied for ethanol exports, and 9.5 million hectares for soy exports. The Brazilian ethanol market is driven by domestic demand; the Brazilian soy market is essentially driven by, and for, the world markets.

The situation in Africa is clearly different. Arable land is scarce and mainly used not for cash crops for export but to feed the population, while cattle are grazing mainly on marginal grasslands. Bioenergy plants such as Jatropha, the Moringa tree and the indigenous plums in the region are suitable for marginal and degraded land, and in this case do not compete with food production; in addition, they may also have a beneficial effect through stabilizing degraded soil.

Apart from the social problems of large-scale agriculture, there are also serious environmental problems. A focus on cash crops for export often means that sooner or later high-yield varieties with a corresponding need for soil, irrigation, fertilizers and pesticides will be planted, often subsidized. Under these conditions, positive energy and greenhouse gas balances are difficult to attain and there will be negative environmental effects on, for instance, biodiversity. The use of genetically modified organisms in the production of industrial bioenergy raises many unresolved questions about risks (mostly environmental) and side effects (mostly health). The technology involved is also linked to the centralized control by a few large companies over seeds and plant varieties.

Another important issue is water availability. Many regions of the world are water scarce, and this will get worse with climate change. If biofuel crops are grown for export with irrigation on arable land, they will potentially not only compete with food but also for water, and that would be a development and environmental disaster. Agriculture already uses more than 50 per cent of all available water in many developing countries. It is imperative that among the diversity of bioenergy crops, those that are selected do not need excessive irrigation. It may well be that the limiting factor for bioenergy turns out not to be the availability of land, but the availability of water.

Unlike other agricultural markets, there is now a strong call from many important players to put sustainability standards for biofuels in place to ensure that the cultivation and export of bioenergy sources does not jeopardize a country's food supply. Governments must make sure that the production of enough food for the people gets clear priority. A regulatory framework is necessary to ensure food sovereignty and the right to food. This right is defined by the International Covenant on Economic, Social and Cultural Rights as follows:

Right to adequate food is a human right, inherent in all people, to have regular, permanent and unrestricted access, either directly or by means of financial purchases, to quantitatively and qualitatively adequate and sufficient food corresponding to the cultural traditions of people to which the consumer belongs, and which ensures a physical and mental, individual and collective fulfilling and dignified life free of fear. (International Covenant on Economic, Social and Cultural Rights, 2002)

Policies to link biofuel incentives to some degree of mandatory sustainability certification are under way in The Netherlands, Germany and the UK. They are seen as pioneering a joint EU scheme that the commission is expected to work out in the near future. However, there much uncertainty about the practical side of how this can be implemented, as well as the extent of the sustainability criteria to be applied in such schemes. Social criteria are generally much harder to place into these schemes than environmental criteria. The UK and Dutch schemes are based on reports that the companies involved are required to file about how they implement sustainability criteria. However, companies can select their own 'sustainability criteria', and there are no sanctions if the reports are seen as incomplete. Indirect effects are not covered in either scheme.

It is important to note that we are talking about a work in progress here. The growing criticism of biofuel monocultures in developing countries will clearly have an impact upon the readiness of political will to legislate schemes that are not merely greenwashing exercises, including a certain determination to defend such schemes against possible producer country interference through the World Trade Organization (WTO).

Another way is voluntary sustainability certification that is modelled after the Forest Stewardship Council (FSC), a private body composed of timber industry, trade unions and NGOs. Multi-stakeholder dialogues such as the Roundtable on Responsible Soy (RTRS), the Roundtable on Sustainable Palm Oil (RSPO) or, more comprehensively, the Roundtable on Sustainable Biofuels (RSB) are trying to find common ground - certainly not an easy task but a necessary exercise. RTRS and RSPO are trying to define sustainability beyond the biofuel sector. There is a lot of criticism of these processes from NGOs and activists, claiming that they are not tough enough and highlighting the obvious potential for greenwashing. These roundtables are not the only game in town. As long as governments are not using such voluntary stakeholder processes to delay or reject mandatory regulation, their potential should neither be overestimated nor should they be dismissed as empty talk shops. The road to a more sustainable global agriculture - including the bioenergy sector, but not limited to it - is long and will be paved with many more multi-stakeholder dialogues, NGO actions, industry pioneers, government regulations, as well as international agreements. Sometimes they will contradict each other; but in the end it will be this mix and not just a single component that will lead to effective action addressing the problem.

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