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THE AGROFUELS BOOM

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. 5X increase in agrofuels production worldwide $200 billion increase in investment. From IADB, 2007.

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THE AGROFUELS BOOM

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  1. THE AGROFUELS BOOM The Industrial Transformation of our Food and Fuel Systems Eric Holt-Gimenez, Ph.D., Food First, 2008

  2. The Green Gold Rush 5% of global trans fuel by 2020 5X increase in agrofuels production worldwide $200 billion increase in investment From IADB, 2007

  3. Total Energy Shares Driving the Boom 91%+ Figures from OECD, 2007 33%+ OECD, 2007 IEA, 2006

  4. 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 Unleashing Investment Northern Renewable Fuel Targets

  5. 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 The Claims: Agrofuels Transition to a Renewable Fuel Economy 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

  6. 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

  7. The Myths:Clean, Green, Fair, Efficient Agro-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

  8. The Grand Mythology We can consume our way out of over-consumption

  9. 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.

  10. 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% U.S. driving up prices

  11. 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

  12. 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.

  13. 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

  14. Agro-Industrial Convergence Petroleum: Agrofuels Grain: ADM, Cargill, Bunge BP, Exxon-Mobil, Chevron Genetic Engineering Automobile: Cellulosic: Chevron-Weyerhouser; BP-DuPont Monsanto, Syngenta, DuPont Monsanto, Syngenta, Dupont Toyota, Volkswagen

  15. 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

  16. 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

  17. 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.”

  18. 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

  19. Transformation of the Food and Fuel Systems: The Battle over the New Energy Matrix • National Trends • direct and indirect subsidies • privatization (land, refineries) • Deforestation • Environmental pollution • Dispossession & exploitation • unemployment & mechanization • International Trends • Concentration • Oligopolies • Major international investors • Political champions Geopolitical trend toward new energy blocs: Inter-American Ethanol Commission, U.S.-Brazil (Colombia, Guatemala)

  20. 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

  21. 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.”

  22. BRAZIL’S COMPARATIVE ADVANTAGE Energy/volume of 1 gallon of ethanol = 0.7 gallons of gasoline.

  23. 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.

  24. 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) 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) Actual (Soy, sunflower, etc.) Potential (Annuals) Potential (Perennials)

  25. 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

  26. 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

  27. 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 overwork or exhaustion. Cane workers have lowest life expectancy rates in Sao Paulo Tom Phillips in Palmares PaulistaFriday March 9, 2007The Guardian

  28. 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.

  29. 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

  30. 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

  31. 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.

  32. Growing opposition to Biofuels • 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.

  33. 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 ...”

  34. International Energy Agency, 2007

  35. 50%--Increase--35% International Energy Agency, 2007

  36. Concentration of Corporate Ownership

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