training exercise jan2010 - fao

An Example

BEFS Team, Bioenergy and Food Security Project

Dar Es Salaam

13-14 January 2010

2BEFS ANALYTICAL FRAMEWORK AND COUNTRY ACTIVITIES

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BEFS and Policy: An Example

Using the information generated by BEFS for biofuels decision making

3BEFS ANALYTICAL FRAMEWORK AND COUNTRY ACTIVITIES

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Where are we under the status quo…

• No biofuel sector• In the period 2009 – 2017 Tanzania becomes

more dependant on food imports as food demand goes up faster than food production

4BEFS ANALYTICAL FRAMEWORK AND COUNTRY ACTIVITIES

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Question:

Can cassava be used to produce ethanol in Tanzania?

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A. Where?

Which areas could be developed?

6BEFS ANALYTICAL FRAMEWORK AND COUNTRY ACTIVITIES

Cassava: Where?

7BEFS ANALYTICAL FRAMEWORK AND COUNTRY ACTIVITIES

Cassava: Zoning for the bioenergy sector

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B. How?

Is ethanol from cassava competitive? If so, under what set up?

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Cassava cost of production (USD/litre)

Thailand and Vietnam –

0.34 to 0.40

Brazil - 0.45 - 0.47

China and India

0.60 - 0.650.37

0.47

0.42

Dried cassava from estate (60%) and outgrowers (40%)

Dried cassava from outgrowers

Fresh cassava from outgrowers

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Tanzanian ethanol delivered at Rotterdam port USD per barrel

Tanzanian Ethanol delivered at Rotterdam

Brazil without

import tariff

Brazilian with import

tariff

Molasses

Sugar cane

Cassava

0 10 20 30 40 50 60 70 80 90 100

US$ per Barrel

Ethanol Cassava: dried scenario 9. Ethanol Sugar cane: Scenario 2. Ethanol Molasses: Scenario 6b, inlcuding co-product credit

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C. What will it do for my economy?

Can it bring economic growth? Can it help reduce poverty? What are the tradeoffs?

12BEFS ANALYTICAL FRAMEWORK AND COUNTRY ACTIVITIES

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Change in poverty rate in 2015 (%)

-1 -2 -3

Poverty level impact (%)

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D. Vulnerable population groups

Which segments of the population are at risk?

15BEFS ANALYTICAL FRAMEWORK AND COUNTRY ACTIVITIES

-0.6

-0.5

-0.4

-0.3

-0.2

-0.1

0.0

0.1

0.2

0.3

0.4

0.5

0.6

1 2 3 4 5

What if the price of cassava increased by 10%?

• Ruvuma

• Kilimanjaro

-0.6

-0.5

-0.4

-0.3

-0.2

-0.1

0.0

0.1

0.2

0.3

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0.5

0.6

1 2 3 4 5

Wel

fare

ch

ang

e (%

)

Wel

fare

ch

ang

e (%

)

Quintile

Quintile

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Did cassava prices change already?

Commodity and

Marketing Level

Domestic Retail

Fresh Cassava

Domestic Retail

Dried Cassava

Domestic Maize

Wholesale Real Percent

Change Between

2003 and 2008

50 42 44

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Using BEFS to inform policy

Bioenergy Industry Development

- Land Zoning

- Industry structure

- Screening of investors to reflect above and policy priorities

Contributing toward existing development policy

- Poverty, economic growth, equity, energy access,

food security, agriculture

Additional measures

- Food security safeguards

- Awareness of international risk factor

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Concluding remarks

Structuring the industry to deliver maximum benefits with fewest risks.

Ex ante - being aware of all the issues, minimisingrisks

Ex post - having mechanisms to monitor and deal with problems

...Per se biofuels is neither good nor bad

What matters is the management of the sector...

Asante Sana!

www.fao.org/bioenergy/foodsecurity/befs

BEFS FAO

20BEFS ANALYTICAL FRAMEWORK AND COUNTRY ACTIVITIES

Poorest Richest

Welfare

incre

ase