Palm plantation in Sumatra, Indonesia. Palm plantations are being used for the production of biofuel under the guise of a new source of ‘green’ fuel, often displacing local communities and eradicating forests. Photo credit: Clare McVeigh/Down To Earth

By Robbie Blake
BRUSSELS, May 9 2015 (IPS)

Last week, the European Union reached a momentous decision to finally agree a reform to its disastrous biofuels legislation, signalling Europe’s U-turn on the burning of crops for biofuels.

In so doing, the European body has recognised what NGOs and scientists have long been warning – that using food and agricultural crops for transport fuel causes major side effects, including food price hikes and volatility, hunger, forest destruction, expanded land consumption, and climate change.“Using food and agricultural crops for transport fuel causes major side effects, including food price hikes and volatility, hunger, forest destruction, expanded land consumption, and climate change”

Six years of political wrangling has ultimately boiled down to a few percentage points. The European Union decided to limit biofuels from food crops like maize, rapeseed, soy and palm oil to 7 percent of transport energy in 2020 (compared with an expected 8.6 percent business as usual).

If that doesn’t sound much (and it should have gone further, given that it still means increasing consumption beyond today’s levels), it is worth knowing that this prevents emissions of an estimated 320 million tonnes of CO₂ – equal to the total carbon emissions of a country like Poland in 2012.

The European Union has moreover committed to end policies and subsidies supporting crop-based biofuels after 2020.

Friends of the Earth (FoE) first heard that policies to incentivise biofuels might be causing serious problems a decade ago. Back then, biofuels were hyped as a silver bullet – backed by big agricultural industry interests and as an easy ‘drop-in’ alternative to fossil fuels.

But FoE partners in Indonesia, Paraguay, Brazil and elsewhere began reporting a pattern of massive new plantation developments for sugar cane, oil palm and soy, under the guise of a new source of ‘green’ fuel. These began to displace local communities and eradicate forests – and continue to do so today.

Meanwhile, studies began to show that many biofuels were helping to drive – not prevent – climate change. Extensive scientific research now shows that, on balance, diverting crops to fuel our transport often does more to contribute to climate change than to combat it, due to the deforestation that goes hand-in-hand with large-scale expansion of agricultural land for biofuels.

The results were also disastrous for food. In 2011, a global report on food price volatility by organisations including the OECD, the World Bank, FAO, and the IMF recommended that “governments remove provisions of current national policies that subsidize (or mandate) biofuels production or consumption.”

By turning its back on these biofuels, Europe sends a strong signal to global markets that the biofuels bubble has burst.

The significance of this should not be underestimated. Many countries, rightly or wrongly, see the European Union as a global leader on policies to tackle climate change, and are likely to follow this example in their own biofuels policies. The European Union is also the world’s biggest producer and importer of biodiesel, so this decision will be noticed on world biofuels and commodity markets.

Biofuels-producing countries should take note. Indonesia recently announced plans for new subsidies to expand biofuels plantations in Indonesian forests – which now seems like a serious misstep.

E.U. governments will now have to implement this reform, and they must set the course for phasing out the misguided blending of food crops into Europeans’ fuel tanks altogether. They should next take stock and ensure that other forms of bioenergy (for example, burning wood for electricity) do not cause unintended harm for citizens, the environment and the climate.

And to truly and effectively reduce carbon emissions from transport, they must urgently adopt readily available options like reducing fuel demand in cars, making trains and public transport better and cheaper, speeding up the electrification of our transport systems, and incentives to get people cycling and walking.

Edited by Phil Harris   

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

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By Anuradha Mittal
OAKLAND, United States, Aug 4 2014 (IPS)

The first years of the twenty-first century will be remembered for a global land rush of nearly unprecedented scale.

An estimated 500 million acres, an area eight times the size of Britain, was reported bought or leased across the developing world between 2000 and 2011, often at the expense of local food security and land rights.

When the price of food spiked in 2008, pushing the number of hungry people in the world to over one billion, it spiked the interest of investors as well, and within a year foreign land deals in the developing world rose by a staggering 200 percent.

Anuradha Mittal

Today, enthusiasm for agriculture borders on speculative mania. Driven by everything from rising food prices to growing demand for biofuel, the financial sector is taking an interest in farmland as never before.

The Oakland Institute has reported since 2011 how a new generation of institutional investors – including hedge funds, private equity, pension funds, and university endowments – is eager to capitalise on global farmland as a new and highly desirable asset class.

But the thing most consistently missed about this global land rush is that it is precisely that – global. Although media coverage tends to focus on land grabs in low-income countries, the opposite side of the same coin is a new rush for U.S. farmland, manifesting itself in rising interest from investors and surging land prices, as giants like the pension fund TIAA-CREF commit billions to buy agricultural land.

One industry leader estimates that 10 billion dollars in institutional capital is looking for access to U.S. farmland, but that figure could easily rise as investors seek to ride out uncertain financial times by placing their money in the perceived safety of agriculture.

In the next 20 years, as the U.S. experiences an unprecedented crisis of retiring farmers, there will be ample opportunity for these actors to expand their holdings as an estimated 400 million acres changes generational hands. And yet, the domestic face of this still unfolding land rush remains largely unseen.

For all their size and ambition, virtually nothing is known about these new investors and their business practices. Who do they buy land from? What do they grow? How do they manage their properties? In an industry not known for its transparency, none of these questions have a satisfactory answer.

For more than six years the Oakland Institute has been at the forefront of exposing the murky nature of land deals in the developing world. The challenge today is to begin a more holistic discussion that places transfer of land in both the developed and developing worlds along the same continuous spectrum.

Driven by the same structural factors and perpetrated by many of the same investors, the corporate consolidation of agriculture is being felt just as strongly in Iowa and California as it is in the Philippines and Mozambique.

Down on the Farm, a new report from the Oakland Institute, aims to increase awareness of the overlapping global and national factors enabling the new American land rush, while at the same time introduces the motives and practices of some of the most powerful players involved in it: UBS Agrivest, a subsidiary of the biggest bank in Switzerland; the Hancock Agricultural Investment Group (HAIG), a subsidiary of the biggest insurance company in Canada; and the Teacher Annuity Insurance Association College Retirement Equities Fund (TIAA-CREF), one of the largest pension funds in the world.

Only by studying the motives and practices of these actors today does it become possible to begin building policies and institutions that help ensure farmers, and not absentee investors, are the future of our food system.

Nothing is more crucial than beginning this discussion today. The issue may seem small for a variety of reasons – because institutional investors only own an apparently tiny one percent of all U.S. farmland, or because farmers are still the biggest buyers of farmland across the country.

But to take either of these views is to become dangerously blind to the long-term trends threatening our agricultural heritage.

Consider the fact that investors believe that there is roughly 1.8 trillion dollars’ worth of farmland across the United States. Of this, between 300 and 500 billion dollars is considered to be of “institutional quality,” a combination of factors relating to size, water access, soil quality, and location that determine the investment appeal of a property.

This makes domestic farmland a huge and largely untapped asset class. Some of the biggest actors in the financial sector have already sought to exploit this opportunity by making equity investments in farmland. Frequently, these buyers enter the market with so much capital that their funds are practically limitless compared with the resources of most farmers.

Although they have made an impressive foothold, this is the beginning, not the end, of a land rush that could literally change who owns the country and our food and agricultural systems. Not only is there space in the market for institutional investors to expand, but there are also major financial incentives for them to do so.

If action is not taken, then a perfect storm of global and national trends could converge to permanently shift farm ownership from family businesses to institutional investors and other consolidated corporate operations. (END/IPS COLUMNIST SERVICE)

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By José Graziano da Silva
ROME, Jun 3 2014 (IPS)

Modern biofuels have become a fact of life, part of a quest for more cost-effective and environmentally sustainable businesses and lifestyles. But to be truly sustainable, biofuel production must strike a balance between its benefits and its potential hidden costs, between energy security and food security.

With the right policies, it does not have to be an either-or situation. It can be a win-win scenario. And that is what we should strive for.

Jose Graziano da Silva. Credit: Courtesy of FAO

Concerns about higher fossil fuel prices, rising energy import bills, geopolitical changes and environmental issues like climate change are not likely to go away anytime soon, if at all. One of the major challenges that policymakers will continue to face in addressing these issues is fostering biofuel production while protecting food supplies and pricing, especially in developing and emerging economies.

Like the opposing forces that work against each other in nature to create a state of equilibrium, policies can be more effective if they are flexible enough to counteract varying market conditions and respond to changing human needs.

A number of countries have already developed and implemented policies to make their national biofuel markets more flexible to accommodate changes in agricultural feedstock and fossil fuel markets. There is much room to improve on these options and extend them to other markets.

More than 60 countries have mandates specifying the percentage of fuel content that should come from renewable sources.“Biofuel policies could be used to generate funds that allow food consumers in poor countries to cope with the possible adverse impacts of price hikes” – José Graziano da Silva

Where there are mandates in place, allowing additional flexibility would be one way to minimise pressure on food prices. For instance, annual mandates for renewable fuel content could be stretched to cover longer periods of time – meeting mandates over five or 10 years, instead of every year.

Better coordination of policies among governments is also important. Coordination among the United States, the European Union and Brazil policies could avoid large trade flows in ethanol. It could also reduce additional demand on certain feedstock, when the prices are already high.

Greater flexibility could also be built in “at the pump”, through a broader promotion of flex fuel technology. This approach would allow both fuel blenders and consumers to respond to changes in relative prices by switching between fossil fuels and biofuels, as appropriate.

Not only could existing schemes be made more flexible, but also, biofuel policies could be used to generate funds that allow food consumers in poor countries to cope with the possible adverse impacts of price hikes. One such option could be to implement a variable fee on blending requirements.

And there are even more straightforward measures that could be used to help the food insecure cope in high and volatile food-price environments.

This is where social provisioning schemes can make a difference. They can help to level the playing field for people whose capacity to buy food or make investments in income-generating activities may be out-of-sync with rising prices.

In some countries, cash transfers and other schemes have provided important safeguards for families and smallholder agricultural producers in vulnerable communities.

In addition to making existing policies more flexible, the second major challenge is to fully harness the potential of biofuels for food security. In many developing countries, a lack of access to affordable and continuous energy supply is the single most important factor that limits agricultural productivity, and in turn, sustainable food security.

In many landlocked parts of sub-Saharan Africa, farmers may pay twice or three times the price of fossil fuels seen on world markets. Electricity is often completely absent or dependent on generators that are run on expensive fossil fuels.

Unstable and costly supplies of fossil fuel-powered energy do not allow farmers to mechanise production and step up food output, and may even increase wastage and spoilage. Providing farmers with jatropha or palm oil-based diesel could be an effective solution. Supporting investment and training in the production and use of biofuels could yield benefits, year after year.

Biofuel production and food security need not be mutually exclusive, but the intrinsic link between the two does need to be acknowledged in the policymaking process, in order to maintain a consistent balance between energy security and the right of all people to adequate, nutritious and affordable food.

No doubt, reconciling food and energy security in so many different environments is a tall order. But introducing greater flexibility in implementing existing policies and doing more to harness the potential of biofuels for farmers in food and energy-poor environments are opportunities which should not be missed. (END/IPS COLUMNIST SERVICE)

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