Biofuel vs' Food Crisis

1
Biofuel vs. Food Crisis

• M. Aminul Islam
• 13 July 2008

2
Issue of Policy Choice Fuels vs. Food?

• In recent years, we've heard that climate change
  could be catastrophic for nature and humanity.
  But it's becoming increasingly evident that over
  the next few decades, climate-change policies
  could prove even more catastrophic. (Source
  The New York Post, 12 July 2008)

3
What is Biofuel?

• Biofuel can be broadly defined as solid, liquid,
  or gas fuel derived from recently dead biological
  material, most commonly plants. This
  distinguishes it from fossil fuel, which is
  derived from long dead biological material.
• Biofuel can be theoretically produced from any
  (biological) carbon source. The most common by
  far is photosynthetic plants that capture solar
  energy. Many different plants and plant-derived
  materials are used for biofuel manufacture.

4
The Context

• Climate-friendly policies in the United States
  and the European Union - subsidizing the
  production and consumption of such renewable
  biofuels as ethanol and biodiesel - have diverted
  such crops as corn, soybeans and palm oil from
  food to fuel. This, in turn, has increased prices
  for food worldwide at a time when the highly
  populous and newly prosperous East and South
  Asian countries are demanding more of it.

5
Rising food prices the "food vs. fuel" debate

• This topic is internationally controversial.
• There are those, such as the National Corn
  Growers Association, who say biofuel is not the
  main cause.
• Some say the problem is a result of government
  actions to support bio-fuels.
• Others say it is just due to oil price increases.

6
Key Issues

• Interest in Biofuels has increased enormously
• Production volumes
• Plans and policies
• Number of countries
• Different biofuel feedstock
• Research on second generation technology

7
Biofuels are motivated by

• Energy security
• Environment and Climate Change
• Rural development

8
Two competing paradigms

• Food vs. Fuel debate
• vs.
• Rural development through blofuels

9
Food vs. Fuels Competition for Scarce Resources

• Conversion of Agricultural Land
• Land clearing and environment
• Water availability and pollution
• Land use and commodity prices
• Alternative outputs/ diversion
• Different crops
• 
  continued..

10
Food vs. Fuel

• Other causes are more important
• Oil prices
• Climate Change
• Speculation
• Increased demand
• Land used for non-agric. purposes

11
Role of Biofuel in Rural development

• Strengths use of locally available natural
  resources, gainful income generating activities,
  employment generation
• Opportunities high demand globally and
  regionally
• Congenial environment for growing bio-fuel crops

12
Crops with Potential in Bangladesh

• Biodiesel
• Jatropha
• Coconut
• Palm oil
• Pongamia
• Bio-ethanol
• Sugar cane
• Sweet Sorghum
• Cassava

13
Food vs. fuel debate depends on

• Feed stock
• Country context
• Production pathway
• Time-frame

14
Bio-fuel Prospects

• Biofuel prospects depend on
• Technology / productivity
• Trade
• Adoption of new crops
• Appropriate scale
• Security of tenure
• Logistics, e.g.. pipelines

15
International Reactions

• The impact of food price increases is greatest on
  poorer countries.
• Some have called for a freeze on bio-fuels. Some
  have called for more funding of second generation
  bio-fuels which should not compete with food
  production so much.
• In May 2008 Olivier de Schutter, the United
  Nations food adviser, called for a halt on
  biofuel investment. In an interview in Le Monde
  he stated "The ambitious goals for biofuel
  production set by the United States and the
  European Union are irresponsible. I am calling
  for a freeze on all investment in this sector."
  100 million people are currently at risk due to
  the food price increases.
• 
  
• continued.

16

• A leaked confidential World Bank study estimated
  bio-fuels had forced global food prices up by
  75.
• The "month-by-month" five year analysis disputes
  that increases in global grain consumption and
  droughts were responsible for price increases,
  reporting that this had had only a marginal
  impact and instead argues that the EU and US
  drive for bio-fuels has had by far the biggest
  impact on food supply and prices.
• The study also found that bio-fuels derived from
  sugarcane did not have as dramatic an impact as
  that derived from grains and vegetable oil

17

• Egypt and Pakistan has extended its own food
  rationing system.
• Indian government is straining to maintain its
  food price subsidy system as costs soar.
• China and Russia are imposing price controls, and
  
• Argentina and Vietnam are reducing supplies to
  the world market through rationing and higher
  export taxes.

18
Need of the Time

• Appropriate policy choice and its effectiveness
  (priority, feedstock, refining, markets and
  impact analysis) .
• Evidence and informed debate
• Public-private partnership/ business models
• Regional and global agreements