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March , 2008
Source:
CGIAR
The emerging revolution in biofuels has opened up new prospects
for developing countries – stronger energy security, new sources
of wealth and reduced greenhouse gas emissions and pollution
from fossil fuels – which, even a few years ago, seemed almost
unimaginable.
While generating much enthusiasm, though, the rapid rise of the
biofuel industry is also raising difficult questions about its
development impacts. Who will benefit from the biofuel
revolution? Will it bypass large numbers of marginalized people
in developing countries, like other booms and revolutions
before, or perhaps even worsen their lot? What will be its
impact on agriculture’s natural resource base? Is there some
economically viable way to ensure that biofuel development
benefits the poor and does not harm the environment?
A coordinated search for answers
Among the experts posing those questions, and seeking answers,
are scientists supported by the CGIAR. The issues at stake –
food security, poverty reduction and environmental
sustainability – lie at the heart of their humanitarian mission.
For that reason, 9 of the Centers are already working on
different aspects of the biofuel conundrum.
To give this work greater cohesion, they recently formed the
Bioenergy Platform of the Alliance of the CGIAR Centers. Through
collaborative research on crops and cropping systems as well as
land management and policy options, the Centers will help
developing countries ensure that biofuels turn out to be a boon
for the developing world’s poor and not the bane of their
already precarious existence.
Following the leader
In recent years, Brazil has demonstrated impressively – through
a pioneering program to promote production of sugarcane-derived
ethanol – how agriculture can generate a resource that possesses
strategic value in the global economy. Ethanol has displaced 40
percent of gasoline use in Brazil. And this has created large
economic benefits by permitting savings on petroleum imports and
by bringing more jobs and income to rural areas.
Rather than envy Brazil, some developing countries, particularly
China and India, are starting to follow its example. According
to a recent report from the International Water Management
Institute (IWMI), both of those countries have set ambitious
goals for domestic production of biofuels, which in China
currently depends on maize and in India on sugarcane.
China aims to increase its biofuel output fourfold, from the
2002 level of 3.6 billion liters of ethanol to around 15 billion
liters by 2020. This increase would displace about 9 percent of
the country’s projected gasoline demand. India is pursuing a
similarly aggressive strategy. To meet their biofuel targets,
China would need to produce 26 percent more maize and India 16
percent more sugarcane. These plans form part of a larger effort
to curb sharp increases in petroleum imports, driven by rapid
economic growth. Together, China and India account for nearly 70
percent of projected worldwide growth in oil demand between now
and 2030.
Others are likely to pursue a similar path, since biofuels,
unlike fossil fuels, can be produced in practically any country.
In fact, some tropical nations may find that they have a
particular advantage as producers and exporters of biofuels or
biomass.
How biofuels can backfire for the poor
Strategies for aggressive development of biofuels may backfire,
however, creating greater hardship for the poor. One of the
principal concerns, voiced repeatedly in recent reports from the
International Food Policy Research Institute (IFPRI), is that
the biofuels boom will drive up the prices of basic cereals.
Cereal prices have already risen drastically in recent years,
and according to IFPRI economists, they are not likely to fall
in the foreseeable future because of low world grain stocks,
rapidly growing demand for feed (the result of rising
consumption of meat and milk) and slow growth in agricultural
productivity. Increased production of biofuels has intensified
competition for grain supplies, contributing to higher prices
and greater price volatility.
This marks a radical departure from the world food situation of
the 1970s through the turn of the century. It was characterized
by steadily lower food prices, made possible by technology-based
growth in agricultural productivity within key food-growing
regions.
Poor consumers were the main beneficiaries of the long-term
price decline, because they spend such a large proportion of
their income on food. By the same token, they will be hurt most
by rising food prices, because this will prompt them to reduce
food purchases and shift to cheaper foods, with dire
consequences for family nutrition.
The environmental price of biofuels
Development experts are also worried that there will be a high
environmental price to pay for the biofuel boom. Increased
production of biomass might, in many ways, worsen the already
serious fraying of tropical agroecosystems. Particularly
alarming is the possibility of biodiversity-rich tropical
forests being destroyed to make way for more sugarcane and oil
palm plantations.
A further concern is the likely impact of biofuel production on
water, particularly in China and India. The above-mentioned IWMI
report warns that current plans to increase biofuel production
in these countries will put greater stress on already strained
water supplies, seriously jeopardizing their ability to satisfy
future food and feed demand.
China and India merit special concern, the report notes, because
in both countries the production of biomass is highly dependent
on irrigation. Moreover, the amount of irrigation water needed
to produce ethanol there is high, compared with water
requirements for this purpose elsewhere. In Brazil, for example,
where rainfed sugarcane serves as the main source of biomass, it
takes, on average, just about 90 liters of water to produce 1
liter of ethanol. But in the dry agricultural lands of northern
China, producing a liter of maize-based ethanol consumes 2,400
liters of irrigation water. In India, the requirement is even
higher at 3,500 liters for irrigated sugarcane.
Dryland solutions
The outlook for biofuels in China, India and other countries
could change radically if they take advantage of alternative
crops and technologies now under investigation. One potentially
revolutionary option involves the use of enzymes to convert
plant cellulose into biofuel. But this technology is years away
from being ready for commercial use.
A nearer term alternative is to invest in the development of
crop and agroforestry species that are highly suitable for
biofuel production and thrive in drylands. Several dryland
species are at the center of a new pro-poor biofuel initiative,
called BioPower, which is coordinated by the International Crops
Research Institute for the Semi-Arid Tropics (ICRISAT).
One dryland crop that shows much promise for ethanol production
is sweet sorghum. It is similar to normal sorghum (which is
grown widely in Asia and sub-Saharan Africa, mainly by poor
farmers) but stores large quantities of sugar in its stalks, in
addition to producing reasonable grain yields. Two other hardy
dryland options are the tree species, Pongamia pinnata, and the
shrub, Jatropha curcas, both of which produce fruits with a high
content of oil suitable for biodiesel.
Pro-poor private-public partnerships
In conjunction with research on alternative crops and cropping
systems, ICRISAT is helping devise an innovative model for
private-public partnerships. Their aim is to develop biofuel
industries that are highly competitive but also beneficial for
the rural poor as well as environmentally sustainable. Through
an agribusiness incubator at its headquarters in Hyderabad,
India, ICRISAT is already working with several young biofuel
companies (Rusni Distilleries Ltd. and Nandan BioMatrix Ltd.,
for example) as well as government agencies and civil society
organizations.
In the production of both ethanol and biodiesel, a key challenge
for these partnerships is to capture economies of scale, that
is, maintain a steady and massive supply of biomass, so that
processing facilities can be kept running at full capacity,
keeping the production costs per liter of biofuel as low as
possible. The conventional approach for achieving this end is
through large-scale farming under a corporate model like that
prevailing in Brazil and the USA. But in most developing
countries, this approach would exclude the poor, even pushing
them off their land and driving up the prices of staple foods.
In contrast, the private-public partnerships supported by
ICRISAT are testing new varieties of sweet sorghum with
thousands of small farmers. The distilleries provide them with
improved seed and technical advice, offer them a guaranteed
price for their crops and transport the harvested stalks for
processing. These efforts are particularly advanced in India;
but a new partnership has been formed in the Philippines, and
the groundwork is being laid in sub-Saharan Africa.
A partnership has also been formed to provide the landless poor,
especially women, in tribal areas of India with access to
wastelands for planting biodiesel species in ways that do not
threaten native biodiversity or wildlife habitats. Once the
trees mature, women will collect the seeds and press out the oil
in their villages for local use or sale or market the seeds to
large-scale processors for much-needed cash.
A telling feature of these partnerships is that the rural poor,
far from being marginalized, are chief protagonists in biofuel
development. Their active participation through strong producer
organizations is the best guarantee that biofuels will be boon
rather than a bane for the world’s poor.
A longer version of this story was written by Nathan C. Russell,
Senior Communications Officer at the CGIAR Secretariat , for
Upsides, a magazine published in The Netherlands and focused on
development and banking.
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