21/04/2008 (AllAfrican.com) - World prices for grain are threatening to go out of control. There is an outcry that diversion of resources from food crops to bio-fuel is partly to blame for the high grain commodity prices, especially in the US where government subsidies are provided for bio-fuel.
In the US the principal justification for bio-fuel is energy security (to replace imported oil with locally produced alternative renewable fuel) and the government has set specific targets for bio-fuel transition. Farmers have consequently converted large acreage from food crops to bio-fuel crops, as the fuel attracts preferential tax incentives.
In Europe, the main justification for government targets to introduce bio-fuel is reduction of greenhouse gases, and targets have been set by EEC to be met by year 2012.
Large tracts of land, which were hitherto dedicated to food crops, have now turned into commercial production of mainly bio-diesel.
This diversion of agricultural resources (land and capital) to bio-fuel has led to shortages of food and prices have consequently gone up. Questions on the wisdom of bio-fuel promotion are being asked by legislators, economists and activists who are concerned about the threat to food security.
Southeast Asian countries like Malaysia and Indonesia are stripping bare primary tropical forests for new palm oil plantations for the fast expending bio-diesel international markets. This has a negative ecological and environmental impact.
Palm oil used as cooking oil and soap manufacture are facing stiff competition from the alternative bio-fuel and prices are naturally going up. Here in Kenya, we are already feeling the impact of the bio-fuel diversification in USA and Europe.
Supplementary imports of grain are coming from highly priced commodity markets. We all know that bread prices have gone up or the size of bread has gone down.
For different reasons (post-election violence and uncertain rains) we are facing imminent grain shortages and when we do import grain the high prices will be visibly felt.
Further analysis of carbon footprints in Europe and USA seem to indicate that bio-diesel farming and production could be producing as much carbon dioxide as they are meant to save. A recent shift in bio-fuel policies now emphasises a change to second generation bio-fuel. These are bio-fuel that are based on non-agricultural bio-feedstock and include municipal bio-waste and agricultural waste.
Included in this second generation bio-fuel are also forestry wastes, high yield cellulosic biomass materials such as naturally occurring wild switch grass, elephant grass etc, which can be converted into bio-alcohol through fermentation and other chemical processes. Support for non-food second generation bio-fuel is what major investors and governments are now prepared to support and promote.
This will reduce threat to food security. Here in Kenya, we have consistently considered the negative impacts of bio-fuel on food security, and the new bio-fuel strategy about to be launched by the Ministry of Energy aims at promoting a non-food crop called jatropha curcas " that will be grown in designated arid and semi-arid areas which would otherwise be unproductive for food crops.
If this strategy is strictly adhered to, there should be no threat to food production in Kenya. Jatropha curcas will be promoted mainly by the Ministry of Energy and will also be supported by the Forestry ministry as the plant also serves as a vegetation cover for purposes of re-afforestation.
The food based crops that could easily be developed for bio-fuel in Kenya are sunflower oil, corn oil and palm oil (for bio-diesel).
But these will only thrive in areas that are already dedicated for food based agriculture i.e North Rift and Western Kenya There is economic reason to promote these crops for cooking oil and indeed one company (BIDCO) has indicated that it has firm plans to promote production of sunflower and palm oil for their cooking oil industry.
Provided these are promoted solely for food supply/demand balance and are stewarded under the Ministry of Agriculture there should be no cause for alarm. They should not be immediately considered for bio-fuel until it can be ascertained that there is no threat to food security.
Bio-ethanol from sugar cane can be integrated into the bio-fuel industry by planning the usage of sugar industry by-products (e.g molasses and other bio-mass wastes).
Sugar production and bio-ethanol production can be planned to run in parallel, and in fact the two can be quite complementally. The proposed Tana /Garsen sugar complex is a good example of how bio-ethanol and sugar can be produced in tandem. Such projects will normally be developed in formerly idle but high potential areas (swamps, irrigatable areas etc).
The two main justifications for bio-diesel industry in Kenya are: Social economic development of the rural populations by giving them an economic activity that will work towards poverty reduction. Many NGOs are already hyped about development of jatropha curcas for this main reason
Also, as an alternative renewable fuel at a time when oil imports have become expensive. If prices persist at the current levels of US$100 per barrel, local bio-fuel production will be easily justified economically. Other benefits of bio-fuel are greenhouse gas reduction (carbon dioxide reduction and climate change reversal ).
Greenhouse gas reduction projects can qualify for CDM ( Clean Development Mechanism) funding for developing countries.
Another justification is that bio-fuels are cleaner compared with conventional fossil fuel, and they would certainly contribute to air pollution reduction.
Certainly, they will be devoid of sulfur and nitrogen which form harmful exhaust emissions from vehicles and which are a major nuisance in urban areas.
Finally, bio-fuel can add to a country's GDP, if harmful impact is avoided. Such impact includes threat to food security and damage of primary forests when these are replaced with bio-fuel crops.
Each country should re-align its strategy for bio-fuel to ensure these impacts are minimised. In Kenya, we have read the final draft strategy and it is a good effort to be given a pass. We leave it to the Energy minister Kiraitu Murungi to make it work and deliver benefits to the overall national GDP, especially in the aspects of job creation.