[enviro-vlc] FAO urges review of biofuel policies to ensure poor can benefit [report: State of Food and Agriculture 2008]

[Vern Weitzel]

The Report may be downloaded at:
http://www.fao.org/docrep/011/i0100e/i0100e00.htm

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http://www.un.org/apps/news/story.asp?NewsID=28455&Cr=&Cr1=

UN agency urges review of biofuel policies to ensure poor can benefit


7 October 2008 – Global biofuel policies should be urgently reviewed to ensure 
that the world’s poor benefit by ending trade-distorting subsidies favouring 
developed nations while countering the rise in food prices sparked by the 
diversion of foodstuff to energy production, according to a new United Nations 
report released today.
“Biofuels present both opportunities and risks,” UN Food and Agriculture 
Organization (FAO) Director-General Jacques Diouf said of his agency’s annual 
flagship publication The State of Food and Agriculture (SOFA) 2008.

“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 from agricultural commodities increased more than threefold 
from 2000 to 2007, now covering nearly 2 per cent of the world’s consumption of 
transport fuels.

This trend is expected to continue, and although the contribution of liquid 
biofuels, mostly ethanol and biodiesel, for transport energy and even more so 
for global energy will remain limited, demand for agricultural feedstocks such 
as sugar, maize and oilseeds for biofuels will continue to grow over the next 
decade and perhaps beyond, putting upward pressure on food prices, the study notes.

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, it adds.

“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 [Organisation for Economic Cooperation and 
Development grouping major industrialized nations] at the expense of producers 
in developing countries,” Mr. 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.

Higher agricultural commodity prices stemming from the growing biofuels demand 
offer important opportunities for some developing countries, with agriculture 
becoming the growth engine for hunger reduction and poverty alleviation, but 
promoting smallholder participation in crop production requires investment in 
infrastructure, research, rural finance, market information and institutions and 
legal systems.

Among the risks, however, are soaring food prices which are already hurting 
developing countries that are highly dependent on imports to meet their food 
requirements. Particularly at risk are poor urban consumers and struggling 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,” Mr. Diouf said. “All 
efforts should aim at preserving the utmost goal of freeing humanity from the 
scourge of hunger.”

The environment impact must also be taken into account. “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.

This impact could also be exacerbated 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,” Mr. 
Diouf said.

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.