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June 13, 2010

Jatropha goes from buzz to bust in Namibia

If it were up to Floris Smith, he would yank out all 8,600 jatropha trees on Shadi Kongoro irrigation scheme.

"We started with 14,000 trees in 2005," he said. "Now almost half are eaten by termites and we never sold one seed."

Smith, manager of the scheme in the Kavango region of Namibia, is not alone in his aversion to jatropha seed, which contains an oil used to make biofuel.

Five years ago, foreign speculators arrived in the impoverished area and talked farmers into adopting the 'dream crop.' Jatropha would be an easy-to-grow money maker with excellent returns from a booming biodiesel market. With climate change high on the agenda and fuel prices soaring, the deal seemed a no-brainer for local businessmen.

But oil prices have since fallen, drying up demand for jatropha. The plant has proved less productive in Namibia than hoped, and more vulnerable to frost and damage from wildlife than advertised. Now many are turning away from the former wonder crop.

"People have bright ideas, but they fool the community and farmers," said Terence Spyron, a commercial farmer in Kavango.

Spyron and his associates in Namibia Bio-Energy Investments (NBI) jumped on the jatropha bandwagon and partnered with Icecap, a UK company that that invested 6 million Namibian dollars ($787,000) in a jatropha project. The plan was to donate trees to small-scale farmers in the area for intercropping with their regular pearl millet staple crop. The profits from jatropha sales would then be shared.

A year ago Spyron was still excited about the one million jatropha seedlings, ready for planting, waiting under shade netting at his Shankara farm, on the banks of the Okavango River near the Angolan border. But as oil prices contracted, Icecap pulled out of the consortium. Only 70,000 trees were eventually planted. Spyron is now desperately trying to keep alive another 300,000 seedings, but the bulk of the stock - 600,000 trees - has died, and 156 workers hired for the scheme have been retrenched.

Similarly, on Shadi Kongoro, Smith is left with 2 million useless jatropha seeds after a would-be South African partner in producing biodiesel pulled out of the deal.

"This jatropha tree is a waste of valuable hectares that could be used for much-needed food production," he fumed. Arid Namibia imports roughly 60 percent of its food.

Small farmers are similarly disappointed that the big plans for jatropha in the area have largely collapsed.

"Five hundred families filled out applications to be involved in the project," recalled Ignatius Shixwameni, an NBI investor and a member of Namibia's parliament. "Trust was built between the investors, traditional authorities and the people. That trust is now gone."

A recent report by Action Aid damns the jatropha hype for creating hunger among developing world farmers. About 1.1 million hectares in five African countries are now used for industrial biofuel production, the report said, but crops like jatropha have pushed out other land uses, including food production, and have brought in far less in the way of income than anticipated.

Still, with oil prices recovering to $80 a barrel recently, foreign investors again are starting to eye several hundred thousand hectares in northern Namibia for growing biofuel crops, mainly jatropha.

Critics question the business rationale behind the proposed ventures, and the benefits for local communities.

"No one really has commercial figures for jatropha," said Francois Waal, whose employer, Namibia Agriculture and Renewables, recently backed out of a 100,000-hectare jatropha development in Namibia's Caprivi region. "We even went to India where jatropha apparently was big business, to get some answers. Wherever we looked, we didn't find any viable projects," Waal said.

Jatropha has been marketed as a tree that thrives in poor soil and creates mass-employment. However, research suggests yields are minimal, even on fertile soils, Namibian experts say. The plant is also not as hardy as advertised, Namibian growers complain.

"The trees were sold as immune to frost and unattractive for wildlife, but that's simply not true," said Christoff Brock, head of the Namibian Agronomic Board. "Antelopes eat the leaves, mice eat the seeds and the lightest frost has a profound effect on the tree."

In 2006 the board, excited about jatropha prospects, put out an ambitious 'Biodiesel Roadmap' for the country. The report is now gathering dust.

"It turns out jatropha is not economically viable," Brock said. "Even working at minimum wage, just getting the seeds of the trees is too expensive."

Officials in the Southern African country have grown wary of investors that promise instant riches for the local population, he said.

Not only has jatropha not brought the promised returns for small farmers but "a big concern was that jatropha would replace mahangu (pearl millet) growing, and how would that impact on food security?" Brock said.

Reuters

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