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Food and Agriculture Organization of the United Nations
FAO calls for review of biofuel policies and subsidies
Annual report weighs opportunities and risks of biofuels
7 October 2008, Rome - Biofuel policies and subsidies should be
urgently reviewed in order to preserve the goal of world food
security, protect poor farmers, promote broad-based rural development
and ensure environmental sustainability, FAO said today in a new
edition of its annual flagship publication The State of Food and
Agriculture (SOFA) 2008.
"Biofuels present both opportunities and risks. The outcome would
depend on the specific context of the country and the policies
adopted," said FAO Director-General Jacques Diouf today. "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 based on agricultural commodities increased more
than threefold from 2000 to 2007, and now covers nearly two percent of
the world's consumption of transport fuels. The growth is expected to
continue, but the contribution of liquid biofuels (mostly ethanol and
biodiesel) to transport energy, and even more so, to global energy use
will remain limited.
Despite the limited importance of liquid biofuels in terms of global
energy supply, the demand for agricultural feedstocks (sugar, maize,
oilseeds) for liquid biofuels will continue to grow over the next
decade and perhaps beyond, putting upward pressure on food prices.
Opportunities for the poor
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.
"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 at the
expense of producers in developing countries," 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.
Food security
Growing demand for biofuels and the resulting higher agricultural
commodity prices offer important opportunities for some developing
countries. Agriculture could become the growth engine for hunger
reduction and poverty alleviation.
Production of biofuel feedstocks may create income and employment, if
particularly poor small farmers receive support to expand their
production and gain access to markets. Promoting smallholder
participation in crop production, including for biofuel, requires
investment in infrastructure, research, rural finance, market
information and institutions and legal systems.
Among the risks, however, food security concerns loom large. High
agricultural commodity prices are already having a negative impact on
developing countries that are highly dependent on imports to meet
their food requirements.
Particularly at risk are poor urban consumers and poor net 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," Diouf said. "All efforts should aim at preserving the
utmost goal of freeing humanity from the scourge of hunger," he
stressed.
Greenhouse gases
When looking at the environmental dimension, the balance is not always
positive. "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.
The largest impact of biofuels on greenhouse gas emissions is
determined 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," Diouf noted.
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.
Second generation
The next generation of biofuels currently under development but not
yet commercially available, using feedstocks such as wood, tall
grasses, forestry and crop residues, could improve the fossil energy
and greenhouse gas balance of biofuels.
"There seems to be a case for directing expenditures on biofuels more
towards research and development, especially on second-generation
technologies, which, if well designed and implemented, could hold more
promise in terms of reductions in greenhouse gas emissions with less
pressure on the natural resource base," Diouf said.
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Contact:
Erwin Northoff
Media Relations, FAO
erwin.northoff@fao.org
(+39) 06 570 53105
(+39) 348 252 3616
Contact:
Erwin Northoff
Media Relations, FAO
erwin.northoff@fao.org
(+39) 06 570 53105
(+39) 348 252 3616
©FAO/Giuseppe Bizzarri
Sugar cane harvesting in Brazil.
Documents
The State of Food and Agriculture 2008 (pdf)
Statement by FAO Director-General Jacques Diouf at the launch of SOFA
2008
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