Transcript Eric Holt Gimenez_Agrofuels_3_08

THE AGROFUELS BOOM
The Industrial
Transformation
of our Food
and Fuel
Systems
Eric Holt-Gimenez, Ph.D.,
Food First, 2008
The Green Gold Rush
5%
of
global
trans
fuel
by
2020
From IADB, 2007
Driving the Boom
Total Energy Shares
Additional Land Availilable
for Agrofuels
91%+
8%
0%
0%
Nort h America
Sout h America
49%
35%
Figures from OECD, 2007
Europe & Russia
Af rica
33%+
Asia
Oceana
8%
OECD, 2007
IEA, 2006
Unleashing Investment
Northern Renewable Fuel Targets
• US: 36 billion gallons a
year by 2022
– 5X current mandated level
– 16 billion gal. ethanol = ½ the
nation’s corn crop
– 21 billion gal. from
“advanced” fuels
• EU: 5.75 % by 2010
10% by 2020.
• Planting all US’s
cornfields to ethanol
offsets only 12%--16%
of gasoline consumption
• Europe would need to
plant 70% of its
farmland to fuel crops
The Claims:
Agrofuels Transition to a Renewable Fuel Economy
• Rely on existing technology
• Lower carbon emissions
• Commercially tested, competitive production
techniques,
• Create rural jobs and develop the rural economy.
• Limit reliance on imported crude oil
• Diversify the national energy mix
• Improve energy security
• Lower carbon emissions
IADB, 2007
• Maximum global production (147 million tons) only covers
present increase in global yearly demand
•Agrofuels 4:1 energy return versus Oil 20:1 energy return
The Assumptions
• “The billions of dollars poured into biofuels
R&D worldwide will increase [biofuel’s]
advantages
• “Cellulosic ethanol [is] even more effective
in reducing carbon emissions [and] will be
increasingly cost competitive.
• “New technologies will address… the
tension between food and energy
security.”
IADB, 2007
The Myths:
Clean, Green, Fair, Efficient
gro-fuels mitigate climate change
Agrofuels will bring energy
independence
Agrofuels will not cause
environmental degradation
Agrofuels will bring
rural development…
not cause hunger
2nd Generation Agrofuels
are on the way
The Grand Mythology
We can consume our way
out of over-consumption
• 2001 – 2006 : 18 million to approx 55 million tons (3X)
• 2006 – 2007 : 54 to 81 million tons (2X annual
increase in global demand for the world’s grain)
• 2008 - half of the U.S. corn harvest for ethanol.
U.S. driving up prices
U.S. Prices
• 2006:
– corn up 60%
– wheat up 25%
– soybeans up 8%,
• 2008:
– Corn $5+ bushel
– Wheat & Soybeans 2X
2007
– Bread: up 12%
– Milk up 29%
– Corn meal up 60%
World Prices
• 2006:
–
–
–
–
corn up over 50%
Wheat up over 21%
Soybeans up over 7%
Food import costs up 10%
• 2007-8:
– Mexico; Corn meal up 60%
– food import prices up 25%
Food Insecurity Worsens
• 2008 World Economic Forum; Food insecurity one of the
main emerging risks of the 21st century. Global Risk
Report
• Food price index is higher than at any time since it was
• created in 1845 The Economist December 2007 in 2007.
• World grain reserves down to 50 days
• FAO’s food price index 40% higher than last a year.
• World Food Program: US$500 million shortfall
• up 40 percent since June – which will lead to ration cuts
Win-win
• 1995 to 2005. $51 billion in federal handouts between
• Ethanol subsidies = $1.38 per gallon—1/2 wholesale
market price.
• 2006- combined state and federal support = $5.1 and
$6.8 billion
• 2007 Monsanto’s stock up a record 137%
• 2008, Monsanto's revenue up 36% to $2.1 billion, far
surpassing the $1.54 billion in revenue in the same
quarter last year
• Syngenta sales up 11% in to $9.2 billion.
Lose-lose
•
Global South:
“Green Deserts” of poverty: for each 100 hectares of plantation there
is 1 poorly-paid job in eucalyptus, 2 for soy, and 10 for sugar cane
• United States:
“Higher prices are not a permanent path to higher
farm income. Why? Because all farmers respond
to higher prices. They bid up the cost of land and
other capital inputs, so that one-day’s higher price
becomes the next day’s higher cost.”
Gregory Page - President and Chief Operating
Officer, Cargill, Inc.,
Address to the U.S. Grains Council 43rd Board of Delegates Meeting
and 4th International Grain Marketing Conference
Agro-Industrial Convergence
Petroleum:
Grain:
Agrofuels
BP, ExxonMobil, Chevron
ADM, Cargill, Bunge
Genetic Engineering
Automobile
:
Toyota, Volkswagen
Cellulosic:
ChevronWeyerhouser;
BP-DuPont
Monsanto, Syngenta,
M
DuPont
Concentration of Market Power
•
•
•
•
•
134 ethanol processing plants in the U.S.,
49 farmer-owned= 28%
77 plants under construction,
88% are owned by large corporations
Overall Farmer-owned industrial share
drops to 20%
• 5 corporations control 50% = monopoly
•
•
•
•
•
•
The Agrofuels Transition:
transformation of our food and
fuel systems:
ADM + Monsanto + Conoco-Phillips
BP +DuPont + Toyota
Monsanto + Mendel Biotechnology
Royal Dutch Shell + Cargill
Syngenta + Goldman-Sachs
DuPont + BP + Weyerhauser
Food and Fuel Sovereignty
“We want food sovereignty, not biofuels… While Europeans maintain their
lifestyle based on automobile culture, the population of Southern countries
will have less and less land for food crops and will lose its food sovereignty.”
5-Year Moratorium
RFS Targets: keystone of the agrofuels boom
Time for an impact assessment on:
– the right to food,
– social, environmental and human rights, and
should
– ensure that biofuels do not produce hunger.
– Ensure that biofuel production is based on
family agriculture, rather than agro-industrial
methods,
http://ga3.org/campaign/agrofuelsmoratorium
Transformation of the Food and Fuel Systems:
The Battle over the New Energy Matrix
National Trends
International Trends
-direct and indirect subsidies
-Concentration
-privatization (land, refineries)
-Oligopolies
-Deforestation
-Major international investors
-Environmental pollution
-Political champions
-Dispossession & exploitation
-unemployment & mechanization
Geopolitical trend toward new energy blocs:
Inter-American Ethanol Commission, U.S.-Brazil (Colombia, Guatemala)
What are the alternatives ?
•
•
•
•
•
•
Conservation
Public transportation
Electric Cars, wind, solar, tides, etc.
Sustainable Agriculture (agroecological)
Land Reform
Localized production and consumption
Food and Fuel Sovereignty
The IDB’s 4 Pillars of Ethanol Success
•
•
•
•
Innovation
Capacity Expansion
Infrastructure
Building Global Markets
“The real challenge is reorienting … face out to export markets, expanding…
overall capacity, and pushing into new regions of production.
“True security is found in an international commodity market with diverse
consumers and producers, which will require global standards, liquid futures
markets, and trade liberalization.
“The IDB can play a role in helping… develop the networks, regulations, and
structures needed to support the growing export market… with the IDB in the
lead, [we] will need to coordinate and facilitate investment and research.”
BRAZIL’S COMPARATIVE ADVANTAGE
Corn
(U.S.)
Soybean
(biodiesel)
Fuel Yield
150—400
gal/acre
Greenhouse
Gas Emissions
(compared to
gasoline)
25% more to
39% less
13% reduction
with natural gas
NO reduction
with coal
0.58 to 1.71
1.42 to 3.213
Energy Ratio
67 gal/acre EU
48 gal/acre US
39 gal/acre Br
42—78 % less
Sugar Cane
(Brazil)
463.3 gal/acre
40—96 percent
less (no burning
of forests)
8 to 8.3
Energy/volume of 1 gallon of ethanol = 0.7 gallons of gasoline.
Myth #2:
Agro-fuels will not cause deforestation
“Because sugarcane generates a high price per hectare [it] results in
sugarcane occupying lands that before were planted to grains and
used for livestock grazing… [these producers] move to distant
regions, such as the center-west, which before were used for cattle.
The result… is that the cattle ranchers seek new areas such as the
Amazon region.”
Brazilian banker
• Soybeans occupy 21% of Brazil’s agricultural land. Soy has grown
at 790,000 acres per year (3.2%) over the last decade.
• The price of soy—the main driver of deforestation in the Amazon—is
directly correlated with the rate of forest destruction.
• There are no credible proposals as to how this link can be broken.
Brazil’s National Agro-energy Plan
2006-2011
Arc of Deforestation
Soy has displaced
2.5 million acres in
Parana and 0.3
million in Rio
Grade do Sul)
Actual (Soy, sunflower, etc.)
Potential (Annuals)
Potential (Perennials)
In 1999, 44 million
acres of soy were
grown in South
America; by 2004
this had more
than doubled to
94 million acres.
(In these Times, April 12,
2007)
Myth # 3:
Cellulosic agro-fuels will be fair, green & efficient
• Research funding at the expense of truly renewable energy
development
• Not likely to be commercially viable in the near future
• No demonstrated potential for reducing global GGE
• Commodification of non-crop species and conservation areas
• Spread of GMOs and extensive monocrops
• Poor energy balance
• Willow, poplar and eucalyptus: long life cycle & wide
dissemination of fruit and pollen
• Invasive species (miscanthus, switch grass, canary grass,
etc.)
• A mid-sized ethanol plant needs a semi-trailer of switchgrass
every 6 minutes to work at capacity
Myth #4:
Agro-fuels will bring rural development
• Current agrofuel development is becoming
highly centralized
– economies of scale
– consistent product
• Agro-fuel production chain controlled by
– oil industry,
– agribusiness,
– biotech
200,000 destitute migrant
sugar cane cutters earning
$200 a month prop up Brazil's
booming ethanol industry
. Between
2004 and 2006
17 workers died as a result of
Phillips in Palmares
overwork orTom
exhaustion.
Cane
Paulista
workers
have
Friday
Marchlowest
9, 2007 life
Guardian
expectancy The
rates
in Sao Paulo
Myth #5:
Agro-fuels will not cause hunger
With high oil prices, the global agro-fuel boom will push global food
prices up:
–
–
–
–
Corn: 20% by 2010 and 41% by 2020
Oilseeds: 26% by 2010 and 76% by 2020
Wheat prices by 11% by 2010 and 30% by 2020
Cassava: 33 percent by 2010 and 135 percent by 2020
IFPRI 2006
– Caloric consumption declines as price rises 1:2
– 16 million food insecure for every 1% price rise in staples
– 1.2 billion people could be chronically hungry by 2025
(600 million more than previously predicted)
The world's poorest people already spend 50-80% of their total
household income on food.
Burning the rainforest to
clear land for palm oil
Amazon destruction correlates with market
price of soy. Land planted to soy increasing
at 3.5%/yr
The Costs of Ethanol:
Deforestation,
Water pollution/extraction,
Monocropping,
Land degradation,
Genetic contamination
Smallholder dispossession
Exploited labor
Poverty
Food Insecurity
80% of Brazil’s C02 emissions come from
burning forests
Reviving Globalization:
Creative Destruction and the Restructuring
of Food and Fuel Systems
• From privatization to
government subsidies
• From de-regulation to
standardization
• From decentralization
to concentration
• From land reforms to
dispossession
• From Regional
integration to bilateral
agreements
• Territorial restructuring
Food versus Fuel?
800 million automobiles consume over 50%
of the world’s energy
A 25 gallon tank of ethanol has enough grain
to feed a person for one year.
Growing opposition to Biofuels
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Open Letter to the EU institutions and citizens ‘We Want Food Sovereignty
Not Biofuels’ by Latin American organisations.6
Declaration ‘Biofuels a disaster in the making’7 to the parties to the UN
Convention on Climate Change (Nairobi, November 2006)
Brazil ‘Full Tanks at the Cost of Empty Stomachs: The
Expansion of the Sugarcane Industry in Latin America’8, February 28th
2007, by Comissão
Pastoral da Terra (CPT), Grito dos Excluídos, Movimento Sem Terra (MST),
Serviço Pastoral
dos Migrantes (SPM), Rede Social de Justiça e Direitos Humanos and Via
Campesina,
• February 19th the Movement of the Landless Rural
Workers (MST) and the Central Union of Workers (CUT)
organized about 2000 MST integrants and rural workers
to non-violently occupy 12 plantations totaling 15,600
hectares in nine municipalities of São Paulo.
Nyeleni 2006
World Conference for Food Sovereignty
“We will mobilize and engage in international campaigns against the industrial
production of agrofuels... We will highlight the destructive impacts of the production
model that pushes the conversion of productive land into monocultural production for
agrofuels, paper pulp, genetically modified trees, and similar industrial crops ...”
International Energy Agency, 2007
50%--Increase--35%
International Energy Agency, 2007
Concentration of Corporate
Ownership