Promises and pitfalls of biofuels

Like any innovation, increased production of energy crops has the potential to exacerbate socioeconomic inequalities by concentrating benefits on the well-off. It can lead to deforestation, a loss of biodiversity, and excessive use of fertilizers and pesticides, thereby degrading the land and water that poor people depend on. Policymakers must take care to ensure that biofuel production is managed and regulated in a way that avoids these pitfalls.—Joachim von Braun, director general, International Food Policy Research Institute, International Conference on Biofuels, July 5 and 6, 2007, Brussels

THE other day former agriculture secretary and now director general of the International Crops Research Institute for the Semi-Arid Tropics (Icrisat) William Dar advised the government to consider the interest of the rural poor in the drafting of plans for the local biofuels industry.

It’ s a timely reminder, obviously based on a valid concern. With the rising prices of fossil fuels, biofuels might just emerge as a huge industry here, and it might be tempting for huge agribusiness giants and industrial processors to push aside the rural poor in the production of feedstocks, such as corn, sugar cane and sweet sorghum, through large-scale and mechanized plantation agriculture.

“It”s simple to do it that way, but it ignores the social and environmental consequences, which could be devastating,” warned Dar, himself a distinguished agricultural scientist. “Markets run on profits, not on social consequences.”

We couldn’t agree more.

The Philippines actually doesn’t run out of success stories in agribusiness and industrial crops production. In the last 30 to 40 years, the Philippines, particularly Mindanao, has been one of the best and most successful producers of pineapples, bananas, asparagus, mangoes, rubber trees, oil palm and cut flowers, among many others, this side of the Pacific.

The only problem is that most of these economic activities are done mainly by large agribusiness firms, rich local entrepreneurs and relatively well-off farmers, thus exacerbating rural inequality. That explains why poverty, especially rural poverty, continues to be a serious problem in this country.

Certainly, producing biofuel feed- stocks is economically and socially promising. These are labor-intensive activities that could help address rural joblessness. It seems to be a picture-perfect business activity that could provide extensive linkages between the farms and industry, thereby benefiting a broader segment of society.

It’s almost like a super sniper’s bullet scoring several hits with just one well-aimed shot: more jobs for farm and upland dwellers, higher incomes for farmers, more jobs for workers in processing plants, reduced reliance on imported fossil fuels, thus contributing to the improvement in our balance of payments, and a cleaner environment. But experts say there are pitfalls that we need to address before we could even think about bringing down those plans to the ground. And the first of them is stakeholder participation.

Are we going to do this like we did with other agribusiness endeavors? If we go business-as-usual, if we don’t factor in social-equity considerations, it’s likely that Dar’s fears about the benefits of biofuels feedstock production accruing largely to the well-off are going to be repeated again.

This is because this new business is going to require extensive access to innovative technologies and markets for producers to be successful. These are factors that are always not available to upland dwellers and marginal farmers, making them miss out on so many potential economic benefits.

And yes, we mentioned access to innovative and proven technologies because our farmers might just end up planting all sorts of feedstocks, only to find out the ones they have invested their sweat and blood in are not needed by the processors.

The government has lately been trumpeting glorious hallelujahs about the virtues of jatropha without even conducting serious research and development efforts about this crop. No less than officials of the Philippine Council for Agriculture, Forestry and Natural Resources Research and Development and Dar himself have lately been warning the government about it, but it seems their wise voices are not getting across.

What sorts of feedstock provide the highest energy yield? What areas in the Philippines are suited for what type of feedstock? What sorts of agronomic practices are necessary to ensure sustainable and economical yield? Are there opportunities for intercropping with existing perennial crops like coconuts? Are there adequate rural infrastructures to support and make such feedstock cost effective? Are there geographic factors to be considered to ensure economic viability? These are some of the many questions that our government planners need to consider before they could even start talking to farmers and upland dwellers.

Failing to study these questions, the government might just end up creating confusion and even more economic problems.

For instance, there’s a danger that in the rush to produce feedstock, we might end up encouraging farmers to shift away from food production. We might end up having plantation-style agribusiness systems for feedstock that would require massive doses of fertilizer and pesticide, thus defeating the biofuel’s supposed earth-friendly purposes.

The worst scenario could be the massive conversion of upland forests for the production of feedstock to the detriment of biodiversity and the watershed areas.

(Note: I wrote this piece as editorial for BusinessMirror, September 1 2007).