Bioenergy value chains, food security and rural development

The effects that bioenergy can have on food security and rural development may be very significant, and they can be both positive and negative (De Castro, 2007; Dubois 2008; World Bank, 2007; FAO, 2008; WBGU, 2008;

FAO, 2009). The following section sheds more detailed light on the different aspects.

Food availability

The competition of biofuel and food-crop production for land, water and labour can lead to food shortages. This relation has been mainly discussed for the global level (see above) but less for the local African level where it may be more diverse. When the food markets are small and isolated, as is true in much of rural Africa, reduction of local food production could make food less available. In contrast, that will not happen if food markets are

fully integrated and able to counteract any reduction in local production.

If, however, SSA bioenergy production can improve access to and use of productivity-enhancing technology, for example, by introducing modern power into agriculture and boosting credit and inputs, the competition between biofuels and food crops even could become synergistic, as shown in some cases of cash-crop production (v. Braun & Kennedy 1986; Maxwell

& Fernando, 1989; Brüntrup, 1997; World Bank, 2007).

In addition, many African regions still have under-used land that offers opportunities for improving yields and production without creating strong competition for land. Some bioenergy crops such as Jatropha grow on (and help recover) degraded soils, where they compete less with food-crop production than if they are grown on fertile land that had been used to cultivate food. Processing waste products or rampant plants can also prevent competition for land, while making degraded agricultural land arable again helps to support food production and food availability. However, competition might continue to exist with regard to capital and labour.

Access to food

Food access occurs by producing for one’s own use (subsistence production), purchasing at markets or receiving cash or food transfers. When food must be bought, food prices and the purchaser’s income are the key determinants of food security of these households.

Bioenergy production can affect both incomes and prices. Various scenarios and stakeholder groups must be distinguished. If bioenergy production does not compromise food production and incomes of producer households raise, these gain food security and nobody else loses. If, however, local food production declines and causes food prices to rise due to imperfect local markets, the situation is more complicated: The bioenergy producers will still gain, but less than in the first scenario. External net food consumers – non-bioenergy farm households that have to spend more for food than they earn from food sales – will suffer from reduced incomes and thus access to food, while the incomes and food access of net-seller farming households (more food sales than purchases) increase.

However, effects can be even more complex. Spillover effects from the modern biofuel value chains might benefit the entire local rural economy in the longer run. Such advantages could result from various linkages such as better cultivation techniques, more mechanization, greater access

to financial services, more efficient input and output markets, improved managerial skills and local infrastructure and stronger farmer associations.

Second-round effects from production or consumption linkages could stimulate on- and off-farm activities in rural areas and increase access to food. Local use of bioenergy can also contribute to other income-generating activities that could improve education and the provision of health services.

It could also make affordable energy accessible in remote areas that are not on energy grids or where the costs of delivering fossil fuels are unaffordable – creating other favourable conditions for the rural economy and improving economic access to food.

The answer to the question which direct effects prevail depends mainly on how income changes are distributed, which in turn depends on the value chain models and production, processing and distribution modes, resource distribution and bargaining powers. For the balance of indirect effects, the distribution of rural households’ food production and consumption is a most important factor, followed by the extent and distribution of second-round effects, taxation and redistributive channels from the government to the rural poor.

Utilization of food

The utilization pillar of food security refers to health and nutrition factors, such as food composition and macronutrients (calories, fat and proteins), micronutrients and health-relevant food ingredients, hygiene, contamination, preparation and intra-household distribution. Food utilization can be influenced by such factors as education, income and gender issues, availability and quality of water, as well as customs of preparing food, such as cooking with firewood which is generally assessed as bearing many health risks.

Bioenergy can negatively or positively affect households integrated as producers and/or consumers into a certain value chain, for instance, through their use of biogas for cooking, the variety of goods available in local markets, the effects of modified agricultural and bioenergy production on water use and quality, or women’s involvement. Widespread cheap, local bioenergy can transform rural development.

Stability of food

In many African countries, national food production, sales and prices are unstable because of high natural fluctuations and deficiencies of mitigation technologies and capacities such as irrigation, fertilizers and pesticides, as well as low food stocks. The fact that many food products are non-tradable and markets are weakly integrated means that even relatively weak production changes cause great price changes. Rural consumers are particularly vulnerable towards such changes and seek to engage in inefficient yet risk-reducing subsistence production much more than they would under stable conditions. Reduced soil fertility and environmental degradation as well as climate change exacerbate this rural phenomenon of vulnerability towards instability of food availability and access.

Introducing cash crops for bioenergy production could further reduce the production of food for markets and disturb the region’s environmental balance and biodiversity. Incentive policies for biofuels can be formulated to make demand rigid, but this exacerbates food price fluctuations. But incentive policies can also lead to more and better production, storage, market integration and stability of biofuels, of income and even of food if positive spillovers exist. Planting cash crops or harvesting bush to recover degraded soils and recovering degraded areas for bioenergy could be good for both the environment and food production. Bioenergy value chains are especially reliable if they are based on perennial and resistant plants or biomass that is abundantly available and sustainably harvested.

New employment opportunities for the rural poor help to diversify livelihoods, stabilize household income and enhance food security. The commercialization of agriculture also brings more capital to rural areas that formerly were characterized by subsistence farming – thus increasing security and stability. In the long run, a large and flexible bioenergy market could create lower minimum prices for agricultural products, but increased dependence on global markets increases exposure to market risk.

That political stability is a major factor for food stability is often forgotten.

The impacts of bioenergy can be tremendous, both at the local level around large-scale investments and the national level because they can lead to social unrest.

Rural development

Normally, four dimensions are used to define and analyse rural development:

ecological, economic, social and political. Despite SSA’s rapid urbanization, the vast majority of the population still lives in rural areas (World Bank, 2007) where poverty generally is vaster and deeper than in urban areas.

The vast majority of people in rural areas directly or indirectly depend on agriculture for their livelihoods. Low asset bases and low productivity as well as the high volatility of nature and production means that smallholder production often cannot guarantee food security. Stable and sufficient incomes are needed to alleviate poverty. The poor infrastructure, high transaction costs and weak governmental systems outside cities exacerbate individual insufficiencies and account for the pervasiveness of poverty and food insecurity in many rural areas.

At the same time, ecological conditions in rural SSA are often deteriorating critically, with vegetation cover and soils becoming degraded through deforestation, soil mining, overgrazing and other inappropriate human practices (ibid.). Water resources are stressed, and very few crop areas are cultivated using proper technologies. Agriculture is the major user of most natural resources and can seriously degrade the environment.

A strong link is often made between poverty as such and the overuse of natural resources – meaning that poverty must be reduced in order to stop and reverse environmental damages and vice versa. This gives rise to the core question regarding agricultural and rural development, “whether, and how, agricultural growth can be compatible with conservation of the farmland natural resource base and of the commons (the forests, wetlands, and bushlands)” (Vosti & Reardon, 1997, p. 1). Although the long-term ecological and economic dimensions of rural development are complementary, in the short term they could compete in some areas.

This study views rural development as a systemic and normative concept of the sustainability of rural areas that incorporates the various goals of agricultural growth, natural conservation, poverty reduction and social development that must be balanced to improve rural livelihoods. Important and complex components of rural development related to bioenergy production (WBGU, 2008) are listed in Figure 4. The concept of rural development is a broad framework for classifying issues with a geographic focus. It is not possible to quantitatively weigh the issues because of the different spatial and temporal dimensions, scales and interests of actors and stakeholders.

Figure 4: How local bioenergy production is expected to affect rural development

Source: Authors

Food security’s reverse effect on rural development

Food security is not just a goal that can be influenced by the direct and indirect effects that bioenergy production has on rural development, food prices and poverty; the repercussions of changes to food security should also be mentioned. Greater food security enhances human health and physical and mental capacities, thereby increasing people’s ability to work, innovate, earn income, invest, and protect and improve the environment. It can also play an important role in fostering political stability, both locally and nationally (FAO, 1996).

2.3 The conceptual framework for analysing the impact