October 8, 2008

Biofuels can be positive for developing countries

A U.N. Food and Agriculture Organization report came out earlier this week and there are a couple of things to note. Here’s the first one. Check out the second half in this post.

First, The State of Food and Agriculure 2008 suggests that biofuels policies should be reviewed in order to preserve the goal of world food security, protect poor farmers, promote broad-based rural development and ensure environmental sustainability.

FAO Director-General Jacques Diouf said biofuels present both opportunities and risks, with the outcome depending on the specific context of the country and the policies adopted. "Current policies tend to favor producers in some developed countries over producers in most developing countries. The challenge is to reduce or manage the risks while sharing the opportunities more widely," he said.

That’s not exactly an "ah-ha" moment there, Diouf. After all, how many developing countries have the resources to develop a biofuels industry? But how many will progress down the path to having those resources should global agriculture be lifted up on the back of biofuels production?

FAO does go on to recognize that, but Diouf suggests one way to help poor countries is to remove agricultural and biofuel subsidies and trade barriers. He’s pointing fingers at the U.S. there, but forgetting that trade is a two-way street – and that poor countries don’t have the resources to develop a biofuels market in the first place. (And wouldn’t these countries want to use initial biofuels production for themselves first? As a way kick the expensive oil habit or to have a reliable supply of energy?)

Here’s the real "ah-ha" moment for the FAO: Growing demand for biofuels and the resulting higher agricultural commodity prices offer important opportunities for some developing countries. "Agriculture could become the growth engine for hunger reduction and poverty alleviation," it said.

It continues by saying: Production of biofuel feedstocks may create income and employment, if particularly poor small farmers receive support to expand their production and gain access to markets. Promoting smallholder participation in crop production, including for biofuel, requires investment in infrastructure, research, rural finance, market information and institutions and legal systems.

It is good the U.N. is recognizing the important and pivotal role biofuels can play in the developing world - and certainly we’re on our way. POET CEO Jeff Broin has addressed this subject at a recent U.N. event. Check it out here. Powerful stuff.

Wouldn't it be something if 100 countries could offer energy to the world - instead of the handful that do now? What a different world we would be living in.

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