1. International Consultation on Pro-Poor Jatropha Development
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

2. 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)

3. Biofuels are not The Solution to (but could contribute to):
Climate Change
Energy crisis
Economic development / Poverty Reduction

4. Biofuels Expansion took-off when world inventories were declining
Source: USDA

5. Grains for Feed and Fuel Use
Feed long term driver of ag. demand
Developing countries are reproducing diet of the west based on high content of animal protein
Biofuels demand, the straw that broke
the camel’s back
Source: OECD-FAO Agricultural Outlook OECD © ISBN

6. Long term trend in agricultural commodity prices
30+ years of declining and or flat prices
Source: International Financial Statistics Online, IMF February 10,2008. Except for real price in 2007,
which is estimated by author.

7. Global Anthropogenic GHG Emissions
Source: Fourth Assessment Report, IPCC (2007)
(a) Global annual emissions of anthropogenic GHGs from 1970 to (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 C02-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.

8. 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 exacerbated by biofuels,.

9. The Question is Poverty reduction
Under which conditions biofuels can be an opportunity for:
Poverty reduction
Climate change / environmental benefit
Energy crisis / energy independence

10. 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

11. 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

12. 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

13. 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

14. 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
Looking at biofuels alone, agriculture can produce a substantial part of U.S. energy demand without distorting production of food, feed, and fiber. The result will be increased farm income and reduced government payments. Large-scale wind power development would have additional benefits.

15. 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

16. Thanks ! Agricultural Policy Analysis Center
Bio-based Energy Analysis Group
Agricultural Policy Analysis Center
Department of Agricultural Economics, Institute of Agriculture
University of Tennessee