Are Bio-fuels an Economic Driver for Developing Nations?

Over the past forty years America and Europe have been benefiting through protective policy behaviour in the form of subsidies, and international trade tariffs. This has been at the detriment to African countries, where farmers are unable to get a fair price for their produce.

Farmers globally are now realising the potential monetary gains associated with the production of bio-fuel crops. The director-general of the UN’s Food & Agriculture Organisation encouraged this growth in his remark that bio-fuels, “provides us with a historic chance to fast-forward growth in many of the world’s poorest countries” (Diouf, 2007).

Although there are new policy incentives globally to produce bio-fuel crops, which do not discriminate between which crops are produced, which needs be recognised and addressed. Farmers are producing bio-fuel crops, such as rapeseed that produce the highest monetary returns. The high demand is surging prices up, which is benefiting the producer. The chief of the World Watch Institute spoke out in support of developing nations producing bio-fuel crops when he commented that, “Higher prices will for the first time allow them to sell at a decent price” (Flavin, 2007).

Bio-fuels singularly can play a major role in the rejuvenation of African economies, especially when 70-90% of the populous are involved in agriculture. In the most recent International Conference on Bio-fuels, Flavin spoke of how “it is now well understood that food insecurity is a result not simply of a lack of food availability, but poverty. Food-insecure people do not have the income to buy the food that is available. If increased production of bio-fuels can raise the incomes of small farmers and rural labourers in developing countries, it may in fact improve food security” (von Braun & Pachauri, 2006). The building of a bio-fuels industry in Africa would provide many jobs in manual labour, enabling them to buy food and provide a better standard of living and consequently pushing themselves out of poverty.

Do you think that this is an opportunity or a potential has it the to destroy their lands further through in appropriate farming techiques as seen in Australia?

I suggest that the introduction of biofuels to Africa should be done incrementally, with education in farming and in the appropriate bio-fuel crop.

Diouf, J. (2007, August 15). Biofuels should benefit the poor, not the rich. From Financial Times: http://www.ft.com/cms/s/0/963b5354-4ac7-11dc-95b5-0000779fd2ac.html?nclick_check=1

Flavin, C. (2007, August 17). (D. N. Agency, Interviewer)

von Braun, J., & Pachauri, R. K. (2006). IFPRI 2005-2006 Annual Report Essay: The Promises and Challenges of Biofuels for the Poor in Developing Countries. International Food Policy Research Institute. Washington: International Food Policy Research Institute.

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Completing a masters in Strategic Management and Planning

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Posted in economic development, energy
2 comments on “Are Bio-fuels an Economic Driver for Developing Nations?
  1. dhaveloose says:

    The following link advocates against further exploitation of biofuel production. Accordingly, the Dutch government is the first the impact of Biofuel agriculture. As an argument they state that it drives up prices of food crops, brings in danger rain forests and ultimately is worsening global warming.

    More see link below:
    http://news.mongabay.com/2007/0429-dutch.html

  2. jeremy says:

    Intuitively, if we are talking about second generation biofuel production, it seems to me that there could be a win-win-win situation. For example, if a noxious weed in the bush could be used for biofuel, its removal can (i) provide energy, (ii) employment for those removing it, and (iii) an improvement in ecosystem efficiency if it allows the natural vegetation to flourish.

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