food vs fuel copy
TRANSCRIPT
IMPACT ASSESSMENT OF
MASSIVE BIO FUEL
PRODUCTION ON FOOD
PRICE INDEX
YASIN KABIR
Overview Segment 1 Introduction
Aim
RQs
Methodology
Limitations
Segment 2 (Global perspective) Impact -in a global context
Urban-poor in LIFDC
Gender perspective
Segment 3m (Local perspective) Affects on USA local market
Brazil‟s role
Segment 4 Discussion
Conclusion
Introduction
• Bio fuel (bf) is liquid, solid, or gaseous fuels derived from renewable biological sources. (i.e ethanol). Crops are currently used i.e. sugar cane (Brazil), corn, maize (USA) to produce ethanol
• Recent rise in energy prices-tensions in OPEC, uncertainties in future availability and access to non-renewable resources have made bf a major issue in many countries‟ policy.
• As food grains is being converted for the production of bf ,it triggered rise in food price index worldwide
Aim
The aim of the study was to assess the impacts of mass scale bio-fuel crop production on food price indices (global perspective), information was also collected regarding the case of Brazil and USA in a local context.
RQs
What are the possible Impacts of using food crops as bio-fuel on food-grain price index?
Case study on the aforementioned issue (food grain price) in USA and Brazil.
How to reduce the impact on food grain price index of bf? Is there any ways to convert the bf „curse‟ to a „blessing‟ ?
Methodology Economical impacts ,case studies was assessed based on literature review
(articles, internet sources).Recommendations were made from author‟s own analysis
Segment 1
Introduction
Aim RQs
Methodology
Limitations
Segment 2
Impact -in a global context
Urban-poor in LIFDC
Gender perspective
Segment 3
Affects on USA local market Brazil’s role
Segment 4
Discussion
Conclusion
Limitations
Economical impacts were concerned, in terms of monetary value (price/unit over a period of time).
Affect of inflation, local country taxation, Federal Reserve‟s impacts, money laundering, international political effects, economical and financial terminologies, jargons or tools were not considered in this paper.
On the context of case studies, due to the scope, time and resource constraints, we conducted only a desktop study rather than a field study. The local commodity price shift was studied based on general knowledge and all financial hedging effects will be ignored.
Segment 1
Introduction
Aim RQs
Methodology
Limitations
Segment 2
Impact -in a global context
Urban-poor in LIFDC
Gender perspective
Segment 3
Affects on USA local market Brazil’s role
Segment 4
Discussion
Conclusion
Segment 1 Introduction
Aim
RQs
Methodology Limitations
Segment 2
Impact -in a global context
Urban-poor in LIFDC
Gender perspective
Segment 3
Affects on USA local market
Brazil’s role
Segment 4
Discussion
Conclusion
Gender Perspective
Source: Soaring food prices: facts, perspectives, impacts and actions required, high-level conference on world food
security: the challenges of Climate change and bio energy, FAO, Rome, 3 - 5 June 2008
Fig: Gender Bias in Poverty and Welfare Effects of Staple Food Price Increases
From figure 1
The FHH are with very few
exceptions are economically
weaker than that of male headed
households and the resultant is
with the food price hike they are
more susceptible to the negative
effect as they spend more on
food than the male counter parts
The table also indicates that
Ghana and Viet Nam holds a
share of more than 20% of the
entire family structure as FHH
Also seen from the table that,
except from Guatemala , in all
the countries FHH are more
susceptible to welfare losses
than the MHH
Segment 1
Introduction
Aim RQs
Methodology
Limitations
Segment 2
Impact -in a global context
Urban-poor in LIFDC
Gender perspective
Segment 3
Affects on USA local market Brazil’s role
Segment 4
Discussion
Conclusion
Affects on USA local market
Source: Baier S, Clements M. et al March, 2009, Bio-fuel Impact on Crop and Food prices: Using an Interactive Spreadsheet
Figure: Corn , Livestock Poultry and Egg Prices 1998/99-2006/7
Figure: Corn prices and US ethanol Production, Jan. 2005- May 2008
Corn Price 1.8$
Ethanol production 9,000,000 of barrels Corn Price 5.5$
Ethanol production 18,000,000
of barrels
Brazil’s Role WB claimed in July 2008
”Brazil's sugar-based ethanol did not push food prices”
This WB report concluded that, though Brazil has been used sugar cane a large scale to produce ethanol, it has not raised worldwide sugar price.. The same year, OECD also published an economic assessment report and agreed on the same issue with WB
Luiz Inácio Lula da Silva blamed strongly to the US and European subsidies as well as gave a restriction of using maize as biofuel crop. The Brazilian President declared in different ocassions that they are not responsible for world higher food prices
A study, "the effects on bio fuels on grain prices" has been published by Brazilian research unit of Fundação Getúlio Vargas. The study asserted that huge ethanol production need lots of sugar cane cultivation land. But Brazilian sugar cane production has no contribution to the average grain prices
Segment 1
Introduction
Aim RQs
Methodology
Limitations
Segment 2
Impact -in a global context
Urban-poor in LIFDC
Gender perspective
Segment 3
Affects on USA local market Brazil’s role
Segment 4
Discussion
Conclusion
Limits of biofules
First generation ◦ Most critizised
◦ Emits CO2 in the production stage
◦ Competes with food production
Second generation ◦ Expensive and complex process
◦ Less fertile soil
What are biofules?
What is biomass?
First generation biofules
Second generation biofules
Third generation biofules
Limits of biofules
Major producers
Food price inflation
Potentional risks of biofules
Impact on developing countries
Proposed actions
Potential benefits
Conclusion
Limits of biofules
Thrid generation
◦ All pros and cons not assessed
Life cycle assessment
New biofules are expensive
Difficult for developing countries
What are biofules?
What is biomass?
First generation biofules
Second generation biofules
Third generation biofules
Limits of biofules
Major producers
Food price inflation
Potentional risks of biofules
Impact on developing countries
Proposed actions
Potential benefits
Conclusion
Major producers
Brazil, USA, the member state of European Union
and several other countries are dominating the
production of biofuel.
Most of bio fuels were supported by government
incentives
More than 200 support proceeds were involved
What are biofules?
What is biomass?
First generation biofules
Second generation biofules
Third generation biofules
Limits of biofules
Major producers
Food price inflation
Potentional risks of biofules
Impact on developing countries
Proposed actions
Potential benefits
Conclusion
Food price inflation
Bio fuel production pushed up maize price
“…the impact of current biofuel policies on world crop prices, largely
through increased demand for cereals and vegetable oils, is significant but
should not be overestimated.” (OECD)
Current biofuel support measures alone are estimated to increase
average wheat prices
Higher corn price lead to higher price in animal source foods.
The 2007-2008 world food crises are partly blamed on increased demand
of biofuels
What are biofules?
What is biomass?
First generation biofules
Second generation biofules
Third generation biofules
Limits of biofules
Major producers
Food price inflation
Potentional risks of biofules
Impact on developing countries
Proposed actions
Potential benefits
Conclusion
Enhance energy security
Environmental Impact
Benefits to smallholders
What are biofules?
What is biomass?
First generation biofules
Second generation biofules
Third generation biofules
Limits of biofules
Major producers
Food price inflation
Potentional risks of biofules
Impact on developing countries
Proposed actions
Potential benefits
Conclusion
Impacts on developing countries
Poor people more susceptible to the price hike
Aid agencies
Burning forests
What are biofules?
What is biomass?
First generation biofules
Second generation biofules
Third generation biofules
Limits of biofules
Major producers
Food price inflation
Potentional risks of biofules
Impact on developing countries
Proposed actions
Potential benefits
Conclusion
Proposed actions
Freeze on first generation biofuels
production
Non food crops for biofuel
Biofuel from food byproducts and co
products
Reduce farmland reserves and set asides
Sustainable production of biofuel
What are biofules?
What is biomass?
First generation biofules
Second generation biofules
Third generation biofules
Limits of biofules
Major producers
Food price inflation
Potentional risks of biofules
Impact on developing countries
Proposed actions
Potential benefits
Conclusion
Potential benefits
Brazil: the world‟s first sustainable biofuel
economy.
According to FAO: biofuel can make
small farmers offers of potential profit
and recommended small credit programs
to help the industry grow.
Local producers stand a better chance to
capture local market share
What are biofules?
What is biomass?
First generation biofules
Second generation biofules
Third generation biofules
Limits of biofules
Major producers
Food price inflation
Potentional risks of biofules
Impact on developing countries
Proposed actions
Potential benefits
Conclusion
Conclusion
First generation biofules land-demanding
Second generation expensive and emits
CO2
Third generation expensive
Developing countries suffer from higher
food prices because of first generation
biofuel but can not afford production of
newer biofules
What are biofules?
What is biomass?
First generation biofules
Second generation biofules
Third generation biofules
Limits of biofules
Major producers
Food price inflation
Potentional risks of biofules
Impact on developing countries
Proposed actions
Potential benefits
Conclusion