Biofuels production: Threat or opportunity?

By J R Ruaya
Energy and Chemistry Consultant

In today's issue of Businessworld, two diametrically opposed views on biofuels have been presented. One, international food experts say that a "biofuels frenzy" and other misguided policies have led to the global food crisis in which prices have soared and rice consumption has outpaced production, threatening a billion people with malnutrition.

Joachim von Braun, director of the US-based International Food Policy Research Institute, cited "major policy failures" at the core of the crisis, in which recent price spikes have led to food riots, threats of starvation, and United Nation calls to lift export bans. Such policy blunder was the "ill-conceived" rapid promotion of biofuels in response to high energy prices.

On the other hand our government functionaries are quick to deny that our biofuels program, as embodied in the new biofuels act, could make a dent to the current food situation. The National Biofuels Board allots fallow land only to planting biofuel crops, the board’s executive director, Ramon Santos, said in an interview.

"The domestic situation is quite different from what is happening globally," Mr. Santos said. "We have a very different situation — biofuels as an industry is not a threat to our source of food supply."

He further stressed that the government was very careful not to accept areas suited for food crops even if a number of land owners have offered their property to the government for biofuel use.

Perhaps not. Or not yet. The mere fact that a number of land owners prefer to raise biofuels than rice should trigger alarm bells regarding our policies not only on energy but on food production and agriculture as well. In rice production, we have a heavily-subsidized NFA cheap rice program that keeps farm-gate prices ridiculously low, perhaps lower than actual production without subsidies, to the detriment of rice growers themselves, and costing us billions of pesos annually.

We have also a flawed agrarian reform program that does not encourage efficient production because its basic essence is to subdivide the large estates into marginal plots.

"These are hilly lands, mountainous lands that are unsuitable for agricultural crops," Mr. Santos insists, on land used for bifuels. "We have a very strong law protecting our agricultural lands, so that before a biofuel plantation can happen, it should have certification from our agency."

On the same breath, the agency lists the possible biofuels crops such as coconuts, sugar, jatropha, palm oil, sweet sorghum and soybeans. With the possible exception of jathropa as touted by its promoters, the rest of the crops does not really grow on hilly, or mountainous lands unfit for agriculture. Even jathropa may find its productive haven in tilled agricultural lands rather than in marginal hillsides.

Even in the United States, which is the world's largest food producer, calls for reviews in its biofuels program, which is already making a dent in its foods production, abound. There, a drop in food production threatens not only the domestic supply but a large portion of the developing world dependent on food imports from the U.S.

Clearly, going rapidly into biofuels is not a no-brainer choice.

Our policy-makers must periodically check the impact of the law's implementation not only on the present, but on the future food situation.

Every angle of the biofuels issue must be viewed with a microscope, not with a tainted glass.

Any zealotry for or against biofuels should be examined for hidden agenda, whether political or economic.

An analytic, dispassionate discussion on biofuels should flower, if only to prevent us from falling into a new policy quicksand which can be very difficult to extricate ourselves from.

Nobody wants food riots on our streets.