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Feed, food and fuel: competition and potential impacts in small crop-livestock-energy farming systems A Study commissioned by the System-wide Livestock.

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Presentation on theme: "Feed, food and fuel: competition and potential impacts in small crop-livestock-energy farming systems A Study commissioned by the System-wide Livestock."— Presentation transcript:

1 Feed, food and fuel: competition and potential impacts in small crop-livestock-energy farming systems A Study commissioned by the System-wide Livestock Program Presented by John Dixon, Xiaoyun Li on behalf of the task team System-wide Livestock Program Workshop Addis, Ethiopia 29 April, 2008

2 An active 9-center task team CIMMYT: John Dixon, Xiaoyun Li, Judit Szonyi IFPRI: Siwa Msangi, Betina Dimaranan; IWMI: Amede Tilahun, Deborah Bossio; ICRISAT: Belum VS Reddy; IITA: Robert Abaidoo; ILRI: Mario Herrero; IRRI: Jagadish Timsina; CIP: Charles Crissman, Victor Mares, Robert Quiroz, Carlos Leon-Velarde; CIAT: Hernan Ceballos, Michael Peters, Douglas White, Bernardo Ospina, Reinhardt Howeler

3 Contents Background Study objectives, framework Preliminary results for feedback Policy and research priorities

4 Background Energy economy Renewable energy investment Energy deficit and poverty World population and income Human diet energy structure

5 Biofuels in general Do biofuels matter for the oil industry? Do biofuels matter for agriculture and rural development? Practically all demand for biofuels is from transport Bioethanol is 90% of biofuels production Now, most bioethanol production is from sugar or starch crops (presently sugarcane and maize) In future, most bioethanol production will be “second generation” from cellulose and lignocelluloses processes

6 Energy economy Fast economic growth, especially in China and India Congruence of demand growth, finite reserves and geo-political uncertainty Past cycles associated with oil peaks, and recent oil prices $ 110+ /barrel National energy security driving policy agendas Local energy underpins sustainable development/MDGs

7 Background: renewable energy investment, 2006

8 Background: Biofuel production United States BrazilChinaIndiaTotal 36%33%7.5%3.7%80.2% Bioethanol production

9 Energy and crop price

10 Projected US maize use for bio-ethanol (doubling )

11 World population and income PopulationIncome (millions)(billions 2000 US$) World 7,1898,15751,31382,057 Sub-Saharan Africa 9301, ,334 West Asia and North Africa ,7272,740 South Asia 1,7742,0921,6203,796 North America ,88823,005 East Asia and the Pacific 2,2052,33113,90322,945 Latin America and the Caribbean ,2266,489 Europe and Central Asia ,27021,749

12 The study Objectives International market responses Resource and environment dynamics Potential impacts on crop-livestock- energy systems Policy and research priorities

13 Analyze the present situation of biofuel production in relation to agriculture in developing countries Identify and profile typical local crop-livestock-energy farming systems (CLEFS) Estimate international market responses Assess the resource and environmental dynamics Assess the biofuel impact on small crop-livestock systems and households Identify policy implications and research priorities Objectives

14 Schematic pathways from bio-fuel to livestock and livelihood Bio-fuels Household livelihood Crops Livestock Market Environment

15 FAO dietary energy sources %

16 Crop-livestock farming systems Resources, market access

17 Crop-livestock farming systems Poverty

18 Crop-livestock farming systems Ruminant and poultry density

19 Crop-livestock farming systems Crop production cf livestock

20 Crop-livestock farming systems Human consumption: cereal cf animal products

21 Preliminary results International market responses Resource and environmental dynamics Potential impacts: crop-livestock-energy systems and household livelihoods Policy and research priorities

22 International market responses World crop food and livestock products demand

23 International market responses Projected demand for feedstock commodities for biofuel at 2020 (Thousand ton) Note: *Rest of the world.

24 International market responses world prices of key feedstock crops Note: *Rest of the world. Source: IFPRI IMPACT projections Increase is over the 2020 baseline levels

25 International market responses livestock commodity price under biofuel scenarios, By 2020 Note: *Rest of the world.

26 Resource and environment dynamics Biofuels impacts on land, water and greenhouse gases are the three main environment concerns with large scale development of biofuels. If all national policies and plans on biofuels are successfully implemented, 30 million additional hectares of crop land will be needed along with 180 km 3 of additional irrigation water withdrawals. Biofuel impacts on carbon savings and GHGs emission depend on how they are produced.

27 Some detail: biofuels land and water use

28 Potential crop effects Under the different scenarios of biofuel expansion, crop areas and production practices are expected to change, including grain and residue prices, the consumption basket, crop substitutions, land and water use, cultivars selection and field management. While maize and sugarcane dominate bioethanol feedstock use at present, some diversification of bioethanol (and biodiesel) feedstocks is expected by Moreover, while there are strong pressures for intensification because of the strong demand for cereals, water and nutrient use efficiency is expected to rise as water and fertilizer prices rise relative to grain prices

29 Some detail: potential crop effects An example maize mixed crop-livestock system in SSA

30 Pressure points on crop-livestock farming systems Crop competition

31 Dynamic cropping systems, e.g., Zhejiang, China Crop competition Potential impacts on crop-livestock farming systems

32 Impacts on livestock By 2015, without crop yield growth an increase in grain prices leads to a reduction in feedgrains -- with greater impacts in more the more intensive crop-livestock systems (e.g., dairy) By 2030, with widespread second generation biofuel production, the focus of competition shifts to biomass – and impacts depend on the cost of harvesting biomass for bioethanol, i.e., economics of bioethanol vs economics of ruminant production. The aggregate effect is likely to be reduction in biomass availability for ruminant fodder. In densely populated systems which lack alternative fodder resources, a reduction in ruminant production is expected or a (further) shift to intensive grain based feeding systems. In pasture-based systems may be less affect unless competition arises from cropping Potential impacts on crop-livestock farming systems

33 Potential impacts on crop-livestock systems Intensification, diversification

34 Policy implications and research priorities Policy implications Research priorities

35 Policy implications Foster widespread use of second generation bioethanol production Reduce, amend, or even eliminate biofuels trade barriers Avoid aggressive biofuel expansion through subsidies which runs ahead of the availability of proven sustainable feedstock and biofuel production technologies Target rate of expansion of biofuels to the particular agricultural resource base and crop-livestock-energy systems as well as available technologies of each country Encourage small and medium size feedstock farmers and also small scale biofuel technologies

36 Research priorities Life cycle analyses (LCA) Biofuel value chain and local markets study Strategic assessment and targeting Early warning system in hotspots Integrated crop-livestock-energy models Management of crop residues Local innovation and learning Sense-act-observe-adjust

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