Robin Pomeroy and Svetlana Kovalyova, Reuters 7 Oct 08;
ROME/MILAN (Reuters) - The Western world needs to rethink its rush to biofuels, which has done more harm pushing up food prices than it has good by reducing greenhouse gases, a United Nations report said on Tuesday.
The U.N. Food and Agriculture Organization (FAO) said policies encouraging biofuel production and use in Europe and the United States was likely to maintain pressure on food prices but have little impact on weaning car users away from oil.
"The report finds that while biofuels will offset only a modest share of fossil energy use over the next decade they will have much bigger impacts on agriculture and food security," it said in its annual State of Food and Agriculture report.
Growing demand for biofuels will boost prices of agricultural commodities in the next 10 years, the report said.
For instance, if demand for biofuel agricultural feedstock rose 30 percent by 2010 from 2007, it would drive sugar prices up by 26 percent, maize prices by 11 percent and vegetable oil prices by 6 percent, FAO said.
With global stocks low and crops strongly dependent on weather, food prices would remain volatile, it said.
Anti-hunger campaigners have blamed biofuels, which convert crops such as maize, sugar, oil seeds and palm oil into liquid fuel for use in cars, for pushing up global food prices, contributing to soaring food bills in the last two years.
The global food import bill is expected to jump 26 percent to $1,035 billion in 2008, powered by price rises in rice, wheat and vegetable oils, FAO said.
Looking ahead to 2010, FAO forecast a 7 percent rise in the world output of main agricultural crops -- wheat, rice, coarse grains, rapeseed, soybean, sunflower seed, palm oil and sugar -- compared to 2007.
URGENT
The food versus fuel debate was stoked last year when then U.N. envoy on the right to food, Jean Ziegler, said using arable land to make fuel was a "crime against humanity."
The FAO report uses far less dramatic language and does not quantify biofuels' contribution to commodity price spikes which were also due to poor harvests and demand for a richer diet in places like China and India.
But it does say the rise in biofuels has put more people at risk of hunger and requiring food aid and other assistance.
It also pours doubt on the claim that biofuels reduce carbon dioxide emissions.
Crops soak up CO2 -- the main greenhouse gas blamed for climate change -- when they grow, but fuel used in their cultivation and processing reduces that efficiency and if trees are cleared to plant them, any gains can be lost.
"In many cases, increased emissions from land-use change are likely to offset or even exceed the greenhouse gas savings obtained by replacing fossil fuels with biofuels, and impacts on water, soil and biodiversity are also a concern," FAO said.
With the exception of sugar cane ethanol production in Brazil, biofuel production only thrives when subsidized.
"There is an urgent need to review current policies supporting, subsidizing and mandating biofuel production and use," the report said, recommending more funding be directed to "second generation" biofuels which will come from non-food plant matter such as straw or algae.
Transportation accounts for 29 percent of the world's total energy consumption and only 0.9 percent of that comes from biofuels, a proportion that the International Energy Agency says could rise to 2.3 percent by 2015 and 3.2 percent by 2030.
Biofuels' rise could provide an opportunity for farmers in developing countries to develop the new cash crops, the report said, but that would only happen if subsidy regimes were changed to favor poorer countries rather than richer ones.
(Editing by Christopher Johnson)
Biofuel boom threatens food security, UN agency warns
Gina Doggett Yahoo News 7 Oct 08;
The UN food agency cast doubt Tuesday on the potential of biofuels to help reduce greenhouse gas emissions while warning that their development threatens food security.
"The expanded use and production of biofuels will not necessarily contribute to reducing greenhouse gas emissions as was previously assumed," Food and Agriculture Organisation Director General Jacques Diouf told a news conference.
The FAO also warned that massive subsidies in wealthy countries limit opportunities elsewhere to profit from the boom in biofuels.
"Trade policies vis-a-vis biofuels discriminate against developing-country producers of biofuel feedstocks and impede the emergence of biofuel processing and exporting sectors in developing countries," the FAO's annual flagship report said.
Diouf, unveiling the report, urged a review of policies on subsidies, tax incentives, tariffs and mandated blending of biofuels with fossil fuels.
The FAO also predicts that food prices will continue to rise as demand grows for biofuels despite their limited importance in terms of global energy supply.
"The risks for food security concerns loom large," Diouf said.
"While some of the other factors may subside, growing demand for agricultural products for the production of biofuels will continue to put upward pressure on food prices for a considerable time to come," he added.
Biofuel production using agricultural commodities more than tripled from 2000 to 2007, and now covers nearly two percent of the world's consumption of transport fuels.
The report, titled "Biofuels: Prospects, Risks and Opportunities," finds that while biofuels will offset only a modest share of fossil energy use over the next decade, they will have much bigger impacts on agriculture and food security.
"We hope that, in general, countries that are pushing for rapid expansion of biofuels will reconsider the pace of that expansion," said FAO expert Keith Weibe.
Diouf also voiced concern that the financial crisis sweeping the world will divert attention as well as "capacity, willingness (and) priority that governments will be giving to the issue of food security."
Brazil's sugarcane-based ethanol is the only biofuel that can compete with fossil fuels, the report said, noting that its production costs are the lowest.
"Even taking into account recent rises in oil prices, among the major producers only Brazilian sugarcane ethanol currently appears to be competitive with fossil fuel counterparts without subsidies."
Wiebe told the news conference: "Our analysis shows that if support measures (subsidies) were reduced or eliminated, global levels would fall but Brazil's would increase."
The FAO report also discussed the environmental impact of changes in land use.
"Possible negative environmental effects -- on land and water resources, as well as on biodiversity -- occur largely because of changes in land use," it said. Biofuel production "strongly enhances the risk of large-scale land-use change and the associated environmental threats," it said.
"The challenge is to reduce or manage the risks while sharing the benefits more widely," Diouf said. "The outcome depends on the specific context of the country and the policies adopted."
The FAO chief wrote in the report: "The emergence of biofuels as a new and significant source of demand for some agricultural commodities -- including maize, sugar, oilseeds and palm oil -- contributes to higher prices for agricultural commodities in general, and for the resources used to produce them.
"For the majority of poor households who consume more food than they produce, higher prices can pose a serious threat to food security -- especially in the short term," he said.
