Transcript Opportunities for smallholder farmers in developing countries

Opportunities and Challenges for
Smallholder Farmers in Developing
Countries
Daniel G. De La Torre Ugarte
International Consultation on Pro-Poor Jatropha Development
Casa San Bernardo, Rome
April 10-11, 2008
Characteristics 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 The Solution to
(but could contribute to):
Climate Change
Energy crisis
Economic development / Poverty
Reduction
Source: USDA
Corn
Wheat
Rice
20
06
/
20
04
/
20
02
/
20
00
/
19
98
/
19
96
/
19
94
/
19
92
/
19
90
/
19
88
/
19
86
/
19
84
/
19
82
/
19
80
/
19
78
/
07
05
03
01
99
97
95
93
91
89
87
85
83
81
79
Percent of total use
Biofuels Expansion took-off when
world inventories were declining
0.36
0.30
0.24
0.18
0.12
0.06
0.00
Grains for Feed and Fuel Use
700,000
600,000
Feed long term driver of ag. demand
000 tons
500,000
400,000
300,000
Developing countries are reproducing diet of the west
based on high content of animal protein
200,000
Biofuels demand, the straw that broke
the camel’s back
100,000
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
World Feed Demand
Feed Demand minus USA
Source: OECD-FAO Agricultural Outlook 2007-2016 - OECD © 2007 - ISBN 9789264025097
Fuel Demnd
Long term trend in
agricultural commodity prices
350
300
Price Index
250
200
30+ years of declining and or flat prices
150
100
50
0
1957
1962
1967
1972
1977
1982
1987
Nominal
Real
1992
1997
2002
Source: International Financial Statistics Online, IMF February 10,2008. Except for real price in 2007,
which is estimated by author.
2007
Global 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 C0 2-eq (Forestry
includes deforestation.)
GHG for ag and forestry is to address the 31% of annual
emissions coming. If we take care of this we take care of
0.26% Searchinger, et al.
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 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 commodities
 Vegetal 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 possible
Enhances the sustainability of smallholder
farmers
Includes farm workers and landless farmers
Enhances environmental resources
Prioritizes local use v.s. urban or export use
Strategy for Poverty Reduction
Mandates 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 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 agriculture
 Improve management practices which increase the
environmental performance of production agriculture
 Ensure 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 Investment
Strengthen 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 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
Thanks !
Bio-based Energy Analysis Group
http://beag.ag.utk.edu/
Agricultural Policy Analysis Center
http://agpolicy.org/
Department of Agricultural Economics, Institute of Agriculture
University of Tennessee http://www.agriculture.utk.edu/