Biofuels, agriculture and poverty reduction

Mar 2007

Despite these concerns, alarm over greenhouse gas (GHG) emissions, rising oil prices and new biofuels targets in the North mean that development stakeholders are interested in the role of the agricultural sector in biofuels production.
This paper examines the scope for biofuels production and trade to contribute to agricultural growth and poverty reduction in developing countries. We do not consider the broader questions about biofuels and energy policy here. We pose the following questions:
• What is the potential contribution of biofuels to agricultural sector development and economic opportunities for poor people in rural areas?
• What might future scenarios of enhanced biofuel production mean for small farmers, agricultural labourers, the non-farm economy and for food security?
• What will the impact be on rural growth and poverty reduction?
• Will biofuels offer a lifeline to rural economies, or largely bypass poor people?
The paper is structured as follows: Section 1 reviews global trends in biofuels production, consumption and trade and highlights market opportunities for poor developing countries. Section 2 draws on these global trends to consider international trade in biofuels and the implications for regulation. Section 3 considers the extent to which biofuels production, processing and trade can and are likely to contribute to growth and poverty reduction. Section 4 analyses what biofuels expansion might mean for food security. Section 5 considers the environmental implications of biofuels whilst in Section 6 we focus on research priorities before concluding with a set of policy and research recommendations. Some parts of the work include very detailed and comprehensive information and these have been included in an annex.

By: L. Peskett, R. Slater, C. Stevens (ODI), A. Dufey (IIED)

 
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