Opportunities and Challenges for Opportunities and Challenges for Smallholder Farmers in Developing Smallholder Farmers in Developing
CountriesCountries
Daniel G. De La Torre UgarteDaniel G. De La Torre Ugarte
International Consultation on Pro-Poor Jatropha DevelopmentCasa San Bernardo, Rome
April 10-11, 2008
Characteristics of BiofuelsCharacteristics of Biofuels
Easily integrated with combustion engine infrastructure
Feedstock growth & conversion in / around rural areas
Generates a new energy sector in the economy / increases energy services in rural areas
Provides a sustained demand for ag. resources
Reduced GHG emissions by 20% (no land displacement effect)
Biofuels are not Biofuels are not The SolutionThe Solution to to ( (but could contribute to)::
Climate Change
Energy crisis
Economic development / Poverty
Reduction
Biofuels Expansion took-off when Biofuels Expansion took-off when world inventories were decliningworld inventories were declining
0.00
0.06
0.12
0.18
0.24
0.30
0.36
1978/79 1980/81 1982/83 1984/85 1986/87 1988/89 1990/91 1992/93 1994/95 1996/97 1998/99 2000/01 2002/03 2004/05 2006/07
Percent of total use
Corn Wheat Rice
Source: USDA
Grains for Feed and Fuel UseGrains for Feed and Fuel Use
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
000 tons
World Feed Demand Feed Demand minus USA Fuel Demnd
Source: OECD-FAO Agricultural Outlook 2007-2016 - OECD © 2007 - ISBN 9789264025097
Feed long term driver of ag. demand
Biofuels demand, the straw that broke the camel’s back
Developing countries are reproducing diet of the west based on high content of animal protein
Long term trend in Long term trend in agricultural commodity pricesagricultural commodity prices
0
50
100
150
200
250
300
350
1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007
Price Index
Nominal Real
Source: International Financial Statistics Online, IMF February 10,2008. Except for real price in 2007, which is estimated by author.
30+ years of declining and or flat prices
Global Anthropogenic GHG EmissionsGlobal Anthropogenic GHG Emissions
Source: Fourth Assessment Report, IPCC (2007)(a) Global annual emissions of anthropogenic GHGs from 1970 to 2004. (b) Share of different anthropogenic GHGs in total emissions in 2004 in terms of CO2-eq. (c) Share of different sectors in total anthropogenic GHG emissions in 2004 in terms of C02-eq (Forestry includes deforestation.)
0.26% Searchinger, et al.GHG for ag and forestry is to address the 31% of annualemissions coming. If we take care of this we take care of
The story thus far:The story thus far:
Increase in agricultural commodity prices is structural (consumption pattern) and weather driven
Biofuels are “the straw that broke the camel’s back
Current industrial agricultural system is not sustainable; biofuels sustainability largely depend on the way feedstock are produced
Today’s agricultural economic, environmental, and social problems are not caused but in any case exacerbated by biofuels.
The Question isThe Question is
Under which conditions biofuels can be an opportunity for:
Poverty reduction
Climate change / environmental
benefit
Energy crisis / energy independence
One could benefit from biofuels without producing them
Take advantage of higher commodity prices:Investment in distribution infrastructure to
capture a higher share of the market.Local traditional foodstuffs become more
competitive than global commoditiesVegetal protein becomes more competitive
than animal protein Higher commodity prices may also
induce investment in land restoration and the use of more sustainable agricultural practices
What type of Biofuels expansion enhances rural development ?
Contributes to household and regional food security
Increases energy services in the community Generates the larger valued added possibleEnhances the sustainability of smallholder
farmersIncludes farm workers and landless farmersEnhances environmental resourcesPrioritizes local use v.s. urban or export use
Strategy for Poverty ReductionStrategy for Poverty ReductionMandates favored larger producers, as
emphasis is placed in volume
Local ownership and utilization enhances rural development and smaller producers
Democratize access to land, water and other productive resources
Too much biodiesel regulation too early, favors larger producers. Utilization of institutional markets favors local, small scale production.
Implement programs to ensure access to food for vulnerable population
Strategy for Climate ChangeStrategy for Climate Change
Promote drastic change diet composition towards more efficient sources of protein and food from local origin
Invest in Research & Extension oriented to:Reduce use of fossil based inputs in agricultureImprove management practices which increase the
environmental performance of production agricultureEnsure the best use of soils and landscape
Recuperate the complementarity of crop and livestock activities in the farm
Integrate GHG emissions and other environmental impacts into farmers balance sheet
Institutional InvestmentInstitutional InvestmentStrengthen land property rights and
enforcing mechanisms to protect small holders
Re-develop domestic institutionality to support transformation of agriculture
International food reserve system
Global coordination of biofuel development
Concluding RemarksConcluding Remarks
If nothing is done, missed opportunity for poverty reduction, agriculture, and climate change
Biofuels could result in a massive increase of energy services in rural areas.
Biofules provides the profitability to invest in rural areas.
Biofuels could provide the profitability to transform agriculture and radically change what, how, and where we produce
Countries could benefit from biofuels without producing them
Department of Agricultural Economics, Institute of AgricultureUniversity of Tennessee http://www.agriculture.utk.edu/
Agricultural Policy Analysis Centerhttp://agpolicy.org/
ThanksThanks ! !
Bio-based Energy Analysis Grouphttp://beag.ag.utk.edu/