Feed, food and fuel: competition and potential impacts in small

crop-livestock-energy farming systems

A Study commissioned by the System-wide Livestock Program

Presented by John Dixon, Xiaoyun Li

on behalf of the task teamSystem-wide Livestock Program Workshop

Addis, Ethiopia 29 April, 2008

An active 9-center task team

CIMMYT: John Dixon, Xiaoyun Li, Judit Szonyi

IFPRI: Siwa Msangi, Betina Dimaranan;

IWMI: Amede Tilahun, Deborah Bossio;

ICRISAT: Belum VS Reddy;

IITA: Robert Abaidoo;

ILRI: Mario Herrero;

IRRI: Jagadish Timsina;

CIP: Charles Crissman, Victor Mares, Robert Quiroz, Carlos

Leon-Velarde;

CIAT: Hernan Ceballos, Michael Peters, Douglas White,

Bernardo Ospina, Reinhardt Howeler

Contents

Background

Study objectives, framework

Preliminary results for feedback

Policy and research priorities

Background: renewable energy investment, 2006

Background: Biofuel production

United States

Brazil China India Total

36% 33% 7.5% 3.7% 80.2%

Bioethanol production

Projected US maize use for bio-ethanol

(doubling 2006-2016)

The study

• Objectives

• International market responses

• Resource and environment dynamics

• Potential impacts on crop-livestock-energy systems

• Policy and research priorities

Analyze the present situation of biofuel production in relation to agriculture in developing countries

Identify and profile typical local crop-livestock-energy farming systems (CLEFS)

Estimate international market responses

Assess the resource and environmental dynamics

Assess the biofuel impact on small crop-livestock systems and households

Identify policy implications and research priorities

Objectives

Schematic pathways from bio-fuel to livestock and livelihood

Bio-fuels

Household livelihood

Crops

Livestock

Market

Environment

FAO dietary energy sources %

Crop-livestock farming systems

Resources, market access

Crop-livestock farming systems Poverty

Crop-livestock farming systemsRuminant and poultry density

Crop-livestock farming systemsCrop production cf livestock

Crop-livestock farming systemsHuman consumption: cereal cf animal products

Preliminary results

International market responses

Resource and environmental dynamics

Potential impacts: crop-livestock-energy

systems and household livelihoods

Policy and research priorities

International market responses

• World crop food and livestock products demand

Crop food Wheat Rice Maize Cassava Sugarcane Sorghum

Year ‘15 ‘30 ‘15 ‘30 ‘15 ‘30 ‘15 ‘30 ‘15 ‘30 ‘15 ‘30

(Million ton) 453 532 381 415 117 133 147 177 144 174 28 36

Livestock

Product

Beef Pork Lamb Poultry Eggs Milk

(Million ton) 76 99 114 131 17 24 93 123 60 69 345 414

International market responses

• Projected demand for feedstock commodities for biofuel at 2020 •(Thousand ton)

Note: *Rest of the world.

Crop Region Baseline Business as

usual

Aggressive

Cassava ROW* 660 6,842 13,684

Europe 97 1,086 2,173

ROW 2,021 20,511 41,023

Maize

USA 35,000 130,000 260,000

Brazil 16 153 306

Europe 1,563 14,572 29,144

ROW 530 4,211 8,423

Oil

Seeds

USA 354 3,017 6,034

Brazil 834 9,014 18,029

ROW 163 1,797 3,595

Sugar

USA 265 3,450 6,900

Europe 1,242 10,703 21,407 Wheat

ROW 205 2,342 4,685

International market responses

• world prices of key feedstock crops

Note: *Rest of the world.

0

10

20

30

40

50

60

70

80

Cassava Maize Oil seeds Sugar Wheat

Biofuel expansion Drastic biofuel expansion

Pri

ce C

ha

ng

es

(%)

Source: IFPRI IMPACT projections Increase is over the 2020 baseline levels

International market responses• livestock commodity price under biofuel

scenarios,By 2020

Note: *Rest of the world. 0

500

1,000

1,500

2,000

2,500

3,000

3,500U

S$

per

to

n

2000 Business as usual Aggressive

Resource and environment dynamics

• Biofuels impacts on land, water and greenhouse gases are the three main environment concerns with large scale development of biofuels.

• If all national policies and plans on biofuels are successfully implemented, 30 million additional hectares of crop land will be needed along with 180 km3 of additional irrigation water withdrawals.

• Biofuel impacts on carbon savings and GHGs emission depend on how they are produced.

Some detail: biofuels land and water use

Total cropped area

for biofuels

Total crop ET for

biofuels

total irrigation

withdrawals for biofuels

2005 2030 2005 2030 2005 2030

USA, Canada 4.60% 9.00% 5.10% 11.00% 4.10% 20.00%

EU 1.30% 28.00% 1.50% 17.00% 0.00% 1.00%

China 1.10% 4.00% 1.50% 4.00% 2.20% 7.00%

India 0.20% 1.00% 0.50% 3.00% 1.20% 5.00%

S-Africa n.a. n.a. 2.80% 12.00% 9.80% 30.00%

Brazil 5.00% 7.00% 10.70% 14.00% 3.50% 8.00%

Indonesia 0.10% 0.00% 0.30% 1.00% 3.50% 7.00%

World 0.90% 3.00% 1.40% 3.00% 1.10% 4.00%

Potential crop effects

• Under the different scenarios of biofuel expansion, crop areas and production practices are expected to change, including grain and residue prices, the consumption basket, crop substitutions, land and water use, cultivars selection and field management.

• While maize and sugarcane dominate bioethanol feedstock use at present, some diversification of bioethanol (and biodiesel) feedstocks is expected by 2030.

• Moreover, while there are strong pressures for intensification because of the strong demand for cereals, water and nutrient use efficiency is expected to rise as water and fertilizer prices rise relative to grain prices

Some detail: potential crop effects

An example maize mixed crop-livestock system in SSA

First generation Second generation Impacts

Business-as-usual Aggressive Business-as-usual Aggressive

Maize price Increase Great increase Less increase impact for maize stover

Maize grain consumption

for food Decline Dramatic decline Even Even

for feed No change No change Even Even

for biofuel feedstock increase Dramatic increase Even Even

Maize stover use Fodder, soil fertilizer Fodder, soil fertilizer Competition for biofuel Competition for biofuel

Crop substitutions Other crops to maize Dramatic convertion No change Use marginal land

Crop system change May change Change No change No change

Land and water

provision Tense More tense Alleviate Alleviate

Cultivars selection

Yield, nutrition,

drought and disease

tolerance

High yield and

nutrition, drought

and disease

tolerance

High biomass, nutrition,

drought and disease

tolerance

High biomass, nutrition,

drought and disease

tolerance

Field management fertilizer use, and

residue management

fertilizer use, and

residue management

fertilizer use, and

residue management

fertilizer use, and

residue management

Pressure points on crop-livestock farming systems

Crop competition

Feed and fodder biofuel pressure point Example

countries maize grain roots or stems Crop residues pasture

Farming system

2015 2030 2015 2030 2015 2030 2015 2030

maize mixed crop-livestock Kenya Major Medium x x Minor Major x x

wheat based crop- livestock Turkey Medium Minor x x Minor Minor x x

sorghum-based crop-livestock India Minor Minor Major Major Minor Minor x x

cassava/ crop-livestock Nigeria x x Major Minor Major Major x x

sugarcane/ crop-livestock Brazil x x Minor Minor Minor Major x Major

oil palm/ crop-livestock Indonesia x x x x x x x x

Cereal-livestock Brazil x x x x x Major x Major

livestock dominant Argentina x x x x x Major x Major

rice-based crop-livestock China Major Minor x x Minor Major x x

rice-based crop-livestock India Major Minor x x Minor Major x x

Impacts on livestock

• By 2015, without crop yield growth an increase in grain prices leads to a reduction in feedgrains -- with greater impacts in more the more intensive crop-livestock systems (e.g., dairy)

• By 2030, with widespread second generation biofuel production, the focus of competition shifts to biomass – and impacts depend on the cost of harvesting biomass for bioethanol, i.e., economics of bioethanol vs economics of ruminant production. The aggregate effect is likely to be reduction in biomass availability for ruminant fodder.

• In densely populated systems which lack alternative fodder resources, a reduction in ruminant production is expected or a (further) shift to intensive grain based feeding systems.

• In pasture-based systems may be less affect unless competition arises from cropping

Potential impacts on crop-livestock farming systems

Potential impacts on crop-livestock systems

Intensification, diversification

Farming system Example

countries

Land resource

constraints

Market

access

Intensi-

fication

Diversi-

fication

maize mixed crop-livestock Kenya 0.5 8.4 2 3

wheat based crop- livestock Turkey 0.5 2.9 Na Na

sorghum-based crop-livestock India 0.7 9.8 2.5 2

cassava/ crop-livestock Nigeria 0.4 7.0 3.5 2

sugarcane/ crop-livestock Brazil 0.5 2.5 2 4

oil palm/ crop-livestock Indonesia 0.9 15.6 Na Na

Cereal-livestock Brazil 0.3 4.1 0 1

livestock dominant Argentina 0.2 3.3 3 2

rice-based crop-livestock China 0.5 3.2 1 4

rice-based crop-livestock India 0.4 2.3 2 3

Policy implications and research priorities

• Policy implications

• Research priorities

Policy implications

• Foster widespread use of second generation bioethanol production

• Reduce, amend, or even eliminate biofuels trade barriers

• Avoid aggressive biofuel expansion through subsidies which runs ahead of the availability of proven sustainable feedstock and biofuel production technologies

• Target rate of expansion of biofuels to the particular agricultural resource base and crop-livestock-energy systems as well as available technologies of each country

• Encourage small and medium size feedstock farmers and also small scale biofuel technologies

Research priorities

• Life cycle analyses (LCA)• Biofuel value chain and local markets study• Strategic assessment and targeting• Early warning system in hotspots• Integrated crop-livestock-energy models • Management of crop residues • Local innovation and learning • Sense-act-observe-adjust