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The Biofuel Revolution: Boon or
Bane for the Developing World's Poor?
The emerging revolution in biofuels has opened up new prospects
for developing countries, which even a few years ago, seemed almost
unimaginable. While generating much enthusiasm, though, the rapid
rise of the biofuel industry is also raising disturbing questions
about its development impacts.
 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 preparing 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 could easily
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 has already contributed substantially to recent
drastic increases in the prices of basic cereals.
Among the main driving factors behind those increases, say IFPRI
researchers, are rapidly growing demand for feed (the result of
rising consumption of meat and milk) and slow growth in
agricultural productivity. Increased production of biofuels in the
industrialized world - with the encouragement of government
subsidies - has made matters much worse by greatly intensifying
competition between food, feed and fuel uses for grain
supplies.
The resulting price rise 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 are being hurt most by
rising food prices, because this prompts 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 concerned 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 prospect of biodiversity-rich
tropical forests and savannas being destroyed to make way for more
oil palm and sugarcane 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 extra water supplied by irrigation
to produce 1 liter of ethanol. But in the dry agricultural lands of
northern China, producing a liter of maize-based ethanol requires
an extra 2,400 liters of irrigation water. In India, the
requirement is even higher at 3,500 additional liters for irrigated
sugarcane.
Dryland options
The outlook for biofuels in China, India and other countries
could change 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 option 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 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 those
partnerships is that the rural poor, far from being marginalized,
are chief protagonists in biofuel development.
Active farmer participation through strong producer
organizations should help make biofuels a boon rather than a bane
for the poor. But to determine the real viability of dryland crop
options for large-scale biofuel production also requires more
rigorous analysis of their technical, economic and social
dimensions.
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.
Photos (courtesy of ICRISAT):
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Dr. Belum Reddy of ICRISAT explains sweet sorghum to a farmer's
group.
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African farmers depend on sorghum for food grain
and livestock feed; bioethanol can add additional income and
provide the incentives to boost yields of all three outputs.
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 Farmers in drought-stressed western Kenya rely on
drought-tolerant sorghum not only to feed themselves but also to
provide scarce dry-season grazing for their cattle. |
 Chattisgarh State, India is a bio-diesel leader,
promoting vast plantations of Jatropha to increase energy
self-reliance; bio-diesel is being blended into fuels that power
trains, cars, and other diesel engines. |
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Poor tribal women raise Jatropha seedlings in
Andhra Pradesh, India, earning desperately-needed cash.
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Poor tribal women planting seeds of biodiesel
trees to grow into seedlings for sale, earning precious cash.
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At its Niamey, Niger research station, ICRISAT has
planted different ecological genetic types, or
'provenances' of Jatropha from around the world to identify
genetic variability that could be used to breed higher-yielding
varieties.
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In Niger, biodiesel is used to run engines that
mill grain, saving women the heavy manual labor of
hand-pounding
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