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May 23, 2011

U.S. biofuels plantation subsidy bill fuels the destruction of African agriculture

by Richard Jonasse

The head of the US Department of Agriculture recently announced an incentive program that would subsidize up to 75 percent of the costs for establishing new US agrofuel [1] plantations, in an “effort to promote production of fuel from renewable sources, create jobs and mitigate the effects of climate change.” This “incentive” is a hand-out to agribusiness, and despite the industry’s “green” fuels hyperbole agrofuels could actually have a negative impact on atmospheric carbon when land use changes are factored in. These subsidies are a public handout to Monsanto, Cargill, BP and Chevron.

US Senators Coburn and Feinstein have written a bill that seeks to eliminate the subsidies and tariffs by year’s end, but the agrofuel industry claims the bill will lead to higher fuel prices. Unfortunately this bill, while better than actually subsidizing agrofuels, would be a blow to global food security. The removal of import tariffs by the US would lower agrofuel prices at home at the cost of an increase in destructive land grabs in the Global South, where land and labor costs are much lower. This will accelerate the current trend of pushing peasant farmers off their land and would lead to increased deforestation, thus increasing the release of greenhouse gases as the industry clears new land.

The EU is also pursuing the agrofuel golden ring to the tune of a current 10% so-called “renewable” fuels mandate, with a goal of 20% by 2020. EU Commissioner for Climate, Connie Hedegaard is calling for an unspecified higher target for 2030, telling the Guardian: “We need to have ambitious targets. It would be one way to send a long-term price signal for renewable energy – that renewable energy is not just going to stop growing after 2020.” When put together, these agrofuels subsidy giveaways and mandates are shaping up to be an unmitigated disaster for agriculture in the Global South.

World Bank President Robert Zoellick recently said that the world is “one shock away” from a global food crisis, calling food price inflation “the biggest threat to the world’s poor”. Growing agrofuel demand is devastating to vulnerable peasant farmers because agrofuels link volatile fuel prices with agricultural assets such as land and water; with higher fuel prices following in line. Agrofuels have already led to wide swings in corn prices, and as the global economy begins to come out of the current malaise they are likely to lead to commodity price shocks as speculators make large bets on food and fuel futures. Given that the world’s population is expected to reach 10 billion by the end of the century (and Africa’s population is expected to triple) we simply cannot afford to divert finite agricultural resources to the production of fuel crops.

A 2010 Friends of the Earth report entitled “Africa up for Grabs: The scale and impact of land grabbing for agrofuels” revealed land leases totaling 619,000 ha for Jatropha (oil seed) plantations in Angola, 502,000 ha in Kenya, and 490,000 ha in Madagascar. Whether all of this land will be developed will depend on global demand—which is expected to grow. While Jatropha is a drought tolerant species, this does not mean that it grows on unused land: pastoralists use dry marginal lands to feed their stock. Taking away this grazing land would have a tremendous impact on these herders, linking their very existence to volatile commodities markets and in the economic capitals of Europe and North America. This would be a problem under any circumstance, but in addition, much of the Jatropha production takes over prime agricultural land and uses up precious water. A report by The Royal Society for the protection of Birds, ActionAid, and Nature Kenya has estimated that due to land use changes “jatropha emits between 2.5 and 6 times more greenhouse gases, depending on how the land was used before the jatropha was planted.”

In Tanzania, what began as a (stated) government effort to use small-scale biofuels production to bring clean energy to the rural poor has led to land evictions and escalated into large-scale export-oriented industrial production. In the Kisarawe district villagers gave over 8,000 hectares of land to British-owned Sun Biofuels to cultivate jatropha under the expectation that they would all get rich. Instead, the villagers have lost all access to the land, and the water resources therein. They are being kept off the land by the threat of violence by Sun. Sun expects to expand jatropha plantations in Mozambique and Tanzania almost fivefold by 2018, to 20,000 ha in order to produce 40,000 tons of agrofuels. It should be noted that this push for agrofuels land grabs is getting a healthy shot in the arm from international development agencies such as USAID, EU energy initiative (EUEI), and the World Bank.

The new rush for agrofuels makes a recent report by intergovernmental organizations (including FAO, IMF, WTO, and World Bank) calling for end to subsidies and mandates for agrofuels all the more salient. The report, entitled Price Volatility in Food and Agricultural Markets: Policy Responses, notes the unusual volatility in food prices since 2006. One of the major drivers has been the share of food crops diverted to agrofuels, and goes on to say that “biofuel production will aggravate the price inelasticity of demand that contributes to volatility in agricultural prices.” A separate leaked report by international food security experts has urged the Group of 20 leading economies to reign in food price volatility by reforming agrofuel policies to allow countries to use agricultural export restrictions and rebuild their emergency food reserves, which could mean rolling back some IMF and WTO rules.

Other files released by Wikileaks, have the OECD’s Trade & Agriculture Directorate, Stefan Tangermann, estimating that maize prices would be 60 percent higher in the next 10 years than in the past decade, with half of the increase due to agrofuels. Joachim Von Braun, Director General of the Inter Food Policy Institute Research (IFPRI), suggested a moratorium on maize for biofuels after their modeling showed that this would reduce maize prices by 20 percent immediately and wheat prices by 10 percent, with further reductions because it would discourage speculation.

The ongoing food crisis in Africa bears the stamp of agrofuels land grabs. This application of industrial agriculture to feed our energy needs is rapidly eating (and heating) up the planet. When capricious global markets can reach down and displace the poorest farmers and herders in the farthest reaches of Africa then it is time to renew the push for a new global mandate, by 2020, that supports Food Sovereignty. We need to stop corporate land grabbing for industrial agrofuels, stop Western assistance for land grabs in Africa and keep peasant farmers on their land!

[1] Agrofuels are defined (broadly) as industrially farmed crops, which compete with food crops for land and water (etc.), and are destined for fuel.

Food First

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