1. 1 Water for Bioenergy or and Food? 5th World Water Forum 16-22 March 2009 Istanbul, Turkey Vineet Raswant

2. 2 Introduction Why are Biofuels important for the Rural Poor? Why are Biofuels important for the Rural Poor? Major Controversies surrounding Biofuel Development Major Controversies surrounding Biofuel Development 1. Food Security 2. Land Availability 3. Water Availability 4. Environmental Considerations Alternative Biofuel Crops Alternative Biofuel Crops Water and Energy Security Water and Energy Security

3. 3 Why are Biofuels important for the Rural Poor?

4. 4 Rural Poor? Why are Biofuels important for the Rural Poor? 1 out of 5 1 out of 5 people are engaged in Agriculture. Yet Agriculture only contributes to 4% of Global GDP. Not surprising that poverty is largely in the agricultural sector.

5. 5 Rural Poor? Why are Biofuels important for the Rural Poor? If these people stay in agriculture, they face many problems.  Commodity prices kept declining up to 2006.  Input costs have been going up.  Agriculture is unprofitable for many.  With declining land holdings the problems of smallholder farmers could be even worse.

6. 6 Rural Poor? Why are Biofuels important for the Rural Poor? Option 1: Option 1:Improve farm-gate prices. Commodity prices 0.00 500.00 1000.00 1500.00 2000.00 2500.00 3000.00 19701972197419761978198019821984198619881990199219941996199820002002200420062008 Time Period Annual Averages WHEAT US HRW ($/mt) RICE INDIC 5% ($/mt) MAIZE ($/mt) SOYBEANS ($/mt) PALM OIL ($/mt) Rise of Oil Prices Rise in Commodity Prices

7. 7 Rural Poor? Why are Biofuels important for the Rural Poor? Option 2: Option 2:Take these people out of agriculture - as advocated by a number of economists.  Can they be absorbed in other sectors in developing countries?  Perhaps we should look at the US and EU economies to assess capacity to absorb labour. Labour ForceUnemployment Rate US 153 million5% EU 222 million9%

8. 8 Rural Poor? Why are Biofuels important for the Rural Poor? expand the size of the agricultural basket There is a need to expand the size of the agricultural basket to to employ such a large number of poor. Biofuels have the potential to generate employment in rural areas, and trigger agricultural growth with implications for poverty reduction. Cross-country econometric evidence indicates that GDP growth generated in agriculture is at least twice as effective in reducing poverty as growth generated by other sectors (World Bank, 2007).

9. 9 Rural Poor? Why are Biofuels important for the Rural Poor? Jatropha Curcas Belt Palm Oil Belt Jatropha Curcas Belt Most poor countries arewell placedto become major producers Most poor countries are well placed, in agro-ecological terms, to become major producers of biomass for liquid biofuel production – or to respond in general to higher agricultural prices (SOFA 2008, FAO). Percentage population undernourished world map

10. 10 Major Controversies surrounding Biofuel Development

11. 11 1. Food Security As experienced recently, food prices increased dramatically with maize and other food crops being introduced as feedstock, affecting many poor households. Should this occur again, policies and procedures will need to be developed to address the needs of the food insecure households. However, the medium-longer term implications of sustained increase in food prices can lead to higher production. (SOFA 2008, FAO) Food production can also be increased through improved yields, and cultivating additional lands.

12. 12 2. Land Availability 250- 800 million Ha Land potentially available for expanded crop production is between 250- 800 million Ha. (SOFA 2008, FAO) Some of this land could be used directly for biofuel feedstock production. Source: FAO, 2003

13. 13 3. Water Availability Globally biofuel crops account for about 1% of total crop requirement. Its share in irrigation water use is 1.67%. Transportation currently accounts for 26% of total energy consumption, 94% of which is supplied by petroleum, and only 0.9% by biofuels 1. Projections 2 show that by 2030 the biofuel sector will account for 3 times the current area, and 5% of the irrigated water use. 1 The State of Food and Agriculture 2008, FAO 2 Comprehensive Assessment of Water Management in Agriculture, IWMI

14. 14 3. Water Availability The water seems to be available: there is wastage. 70% of global freshwater withdrawals are used for agriculture. Traditional irrigation, in most water-scarce countries, consumes only a fraction of the water it withdraws (about 50%); the rest is wasted or evaporates. Even in biofuel production more water-intense crops are being used. Sugarcane requires more water than tropical sugarbeet and sweet sorghum. 35% of the food is wasted in Europe. Water consumption of meat-based diets is twice the vegetarian-based diets.

15. 15 Palm Oil Belt Jatropha Curcas Belt Palm Oil Belt Jatropha Curcas Belt Palm Oil Belt Jatropha Curcas Belt Palm Oil Belt Jatropha Curcas Belt Palm Oil Belt Jatropha Curcas Belt Palm Oil Belt Jatropha Curcas Belt Palm Oil Belt Jatropha Curcas Belt Palm Oil Belt Jatropha Curcas Belt Palm Oil Belt Jatropha Curcas Belt Palm Oil Belt Jatropha Curcas Belt Palm Oil Belt Jatropha Curcas Belt Palm Oil Belt Jatropha Curcas Belt Palm Oil Belt Jatropha Curcas Belt In many areas suitable for biofuel production, there is economic water scarcity rather than physical water scarcity.

16. 16 4. Environmental Considerations Biofuels have the potential to reduce the greenhouse gas emissions, although some feedstocks are more effective than others.

17. 17 4. Environmental Considerations monoculture cash crops Intensive cultivation of monoculture cash crops causes environmental externalities associated with:  Pesticides; fertilizers; high water use (which lead to water pollution and depleted resources). Perennial crops Perennial crops on the other hand could be:  An excellent source for cellulosic biofuels; and have  socio-economic and environmental benefits. smallholders Does this make a stronger case for using perennial crops such as Jatropha and encouraging smallholders to produce biofuels, using CA techniques?

18. 18 Alternative Biofuel Crops

19. 19 Alternative Biofuel Crops Unfortunately, partly due to a current knowledge gap, experiences with three major crops (maize, sugar, and palm oil) are dictating perceptions about biofuels. There are biofuel crops that require less water, can be grown in relatively unfavourable agro-climatic conditions, and can reduce greenhouse gas emissions:  Jatropha.  Pongamia.  Cassava. lesswater  Sweet sorghum –also uses less water than sugar.

20. 20 Alternative Biofuel Crops There are also other biofuel crops that can be grown in saline conditions: lesswater  Tropical sugarbeet –also uses less water than sugar.  Algae.  Seashore mallow.  Camelina.  Arundo donax, perennial grass found in most countries in the world. There are about 60 million ha of lands affected by secondary salinization, that can be used for biofuel production.

21. 21 Water and Energy Security

22. 22 Water and Energy Security Water and Energy Security are closely interlinked. Policies, practices, and research efforts should focus on crops that can be sustainably grown in marginal areas, use less water, and do not compete with food crops. IFAD is now floating a Facility to finance research and development for encouraging production of such crops to benefit the poor in remote areas.

23. 23 Thank you for your Attention