Food in the age of bio­fu­els

Financial Mirror (Cyprus) - - FRONT PAGE -

Over the past sev­eral years, bio­fu­els have be­come a bone of con­tention. For some, a re­new­able energy source pro­duced from or­ganic mat­ter amounts to a magic wand in the fight against cli­mate change. But oth­ers view bio­fu­els as an ex­is­ten­tial threat, be­cause the plants used to cre­ate them com­pete for agri­cul­tural land and wa­ter that would oth­er­wise be used to grow food.

But this is a false di­chotomy. The choice can­not be be­tween food and fuel. We can make good use of both. Given the right con­di­tions, bio­fu­els can be an ef­fec­tive means to in­crease food se­cu­rity by pro­vid­ing poor farm­ers with a sus­tain­able and af­ford­able energy source.

In some land-locked African coun­tries, ga­so­line costs three times the global av­er­age, mak­ing fuel prices one of the main bar­ri­ers to agri­cul­tural growth. Ex­tend­ing the use of bio­fu­els in these re­gions could boost pro­duc­tiv­ity and cre­ate new em­ploy­ment op­por­tu­ni­ties, es­pe­cially in ru­ral ar­eas. The ef­fect could be made even stronger if the ad­di­tional de­mand for feed­stock cre­ated by bio­fu­els was met by fam­ily farm­ers and small-scale pro­duc­ers.

Bio­fu­els have be­come a fact of life, and their use is ex­pected to con­tinue to in­crease steadily. In 2013, bio­fu­els ac­counted for 3% of the to­tal trans­port fuel used around the world, ac­cord­ing to a re­port by the Food and Agri­cul­tural Or­gan­i­sa­tion and the OECD. While this per­cent­age is ex­pected to re­main steady, we can nonethe­less ex­pect the pro­duc­tion of bio­fu­els to grow in ab­so­lute terms as the global mar­ket for trans­port fu­els also ex­pands.

In­deed, global bio­fuel pro­duc­tion is pro­jected to be dou­ble by 2023 rel­a­tive to its level in 2007. If that pre­dic­tion is borne out, bio­fu­els will con­sume 12% of the world’s coarse grain, 28% of its sugar cane, and 14% of its veg­etable oil. As pro­duc­tion of these fu­els grows, we will re­quire poli­cies, pro­grams, and ca­pac­i­ties that en­sure that they are used sus­tain­ably, with­out dis­tort­ing food mar­kets or com­pro­mis­ing food se­cu­rity, which will al­ways be the first pri­or­ity.

The pioneers of bio­fu­els would prob­a­bly be sur­prised by how lit­tle they con­trib­ute to the to­tal world fuel sup­ply to­day. Ru­dolf Diesel’s first en­gine, de­signed in the late 1800s, ran on fuel de­rived from peanut oil. Henry Ford once scouted Florida in hopes of buy­ing tracts of land to plant sugar cane, con­vinced that the United States would not tol­er­ate the pol­lu­tion from burn­ing fos­sil fu­els or the de­pen­dency im­plicit in im­port­ing oil to pro­duce ga­so­line.

Only in re­cent decades have bio­fu­els re­gained their orig­i­nal ap­peal, ow­ing to ef­forts to se­cure af­ford­able energy, gen­er­ate in­come, and mit­i­gate the de­pen­dency of which Ford warned. More re­cently, con­cerns about pol­lu­tion, cli­mate change, and the fi­nite na­ture of fos­sil fu­els has driven a spike in de­mand – one that must now be man­aged.

Flex­i­bil­ity is key to ef­forts to lever­age the world’s grow­ing re­liance on bio­fu­els to boost agri­cul­tural pro­duc­tiv­ity, ac­cel­er­ate ru­ral de­vel­op­ment, and in­crease food se­cu­rity. For ex­am­ple, pol­i­cy­mak­ers must defuse the com­pet­i­tive pres­sures be­tween food and fuel by de­sign­ing schemes to counter price volatil­ity for ba­sic food­stuffs. Author­i­ties could re­quire that the per­cent­age of bio­fu­els blended with con­ven­tional fuel be in­creased when food prices drop and cut when they rise. This would serve as a sort of au­tomat ic sta­biliser. Poor farm­ers would con­tinue to en­joy ro­bust de­mand for their prod­ucts even when food prices dropped, and con­sumers would be pro­tected from rapid or ex­ces­sive price in­creases.

Na­tiona l tar­gets could also be made more flex­i­ble. If man­dates for bio­fuel use were ap­plied over sev­eral years, in­stead of only one, pol­i­cy­mak­ers could in­flu­ence de­mand in or­der to min­imise pres­sure on food prices.

Fi­nally, at the in­di­vid­ual level, greater flex­i­bil­ity could also be built in at the pump, through the pro­mo­tion of flex-fuel ve­hi­cles of the type al­ready in use in Brazil. If cars are equipped with en­gines that can run on con­ven­tional fos­sil fu­els or blends with high per­cent­ages of bio­fu­els, con­sumers can adapt to changes in prices by switch­ing be­tween one or the other.

Find­ing the right bal­ance will not be easy. But if we har­ness our col­lec­tive knowl­edge, in­clude de­vel­op­ing coun­tries’ small­holder farm­ers in this ef­fort, and main­tain our fo­cus on re­duc­ing poverty and pro­tect­ing the vul­ner­a­ble, we can have more fuel, more food, and greater pros­per­ity for all.

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