LAND USE, LIVELIHOODS AND BIOENERGY: A FARMER PERSPECTIVE INTERNATIONAL CONFERENCE ON SUSTAINABLE BIOENERGY 12-13 October 2006 ♦ Bonn, Germany LAND USE, LIVELIHOODS AND BIOENERGY: A FARMER PERSPECTIVE Raul Q. Montemayor Federation of Free Farmers Cooperatives, Inc. (Philippines) International Federation of Agricultural Producers (IFAP)

Why Bioenergy? Finite and insecure supply, and increasing prices of, fossil fuels Need for environmentally friendly sources of energy to arrest climate change and environmental degradation 1) Global warming and greenhouse gases from fossil fuels

Why Farmers? Farmers are part of the problem - agriculture accounts for up to 20% of human-induced greenhouse effect Farmers are also victims of climate change and environmental problems Farmers are part of the solution – they are the producers of crops and feedstock for biofuels Farmers can benefit as users of energy 1) Greenhouse effect arise mainly from carbon dioxide and methane emissions. Agricultural soils are net sources of atmospheric carbon dioxide Methane emissions come from biological decomposition, livestock digestion, anaerobic decomposition of agricultural wastes, and anaerobic activity in irrigated rice cultivation. Some fertilizers and chemical inputs contribute to greenhouse effect. 2) Agriculture covers one-third of world’s land surface; farmers are largest group of ecosystem managers. Agriculture needs to feed the world population that will double to 9 billion by 2050. Challenge is to meet food demands while protecting environment at the same time by minimizing use of fossil fuels and providing bio-energy, carbon sinks, etc. 3) Lack of awareness of farmers on climate change. Lack of facilities and infrastructure to help farmers deal with climate change. Investments in environmentally friendly methods have long-term effect but farmers need immediate sustenance. 4) Petroleum is the dominant primary energy source, accounting for over 35 percent of the world’s total commercial primary energy consumption. Coal ranks second as a primary energy source (~23 percent of world primary energy consumption) and natural gas third (~21 percent). These fossil fuels emissions are the main sources of the greenhouse gases causing global warming, and thus climate change. Fuelwood and charcoal together with other biofuels represent around 10 percent of the total global primary energy consumption. Nuclear energy accounts for 7.6 percent, and hydro and other renewable energy sources (geothermal, solar and wind) 2.7 and 0.7 percent, respectively.

Bioenergy: A General Assessment Generally a positive development for farmers from welfare and environmental perspective But limited analysis of long-term economic, environmental, social and other effects and prospects Farmers cannot afford to take risks and must guard against overexpectations, mistaken assumptions, and opportunists Bioenergy only part of the answer to energy problems

LAND USE ISSUES Agro-climatic and related constraints to feedstock production Competing uses for land and other natural resources for food, feed and fuel Threats to small farm agriculture and rational land use Danger of irreversible overexploitation of land and natural resources Produce may shift from one market to another, depending on the price, leading to disruptions in market chain. Farmers may shift from corn to sugar to avail of better prices for sugar for ethanol use; corn mills close down, farmers have to ready market if sugar or ethanol prices fall. Investors in ethanol plans may also be caught in a bind if farmers suddenly decide to shift production to other crops. Ensure that the cost to produce a liter of ethanol is much less than the amount of ethanol and energy produced. 1 litter fossil fuel used to produce 8 liters ethanol from sugarcane, vs. corn at 1:2. Prospects for increased land area for cultivating feedstock not good due to climate change and other agroclimatic factors and limits. Feedstock production may require large-scale farmers leading to displacement of small farmers. Chinese investors looking for land in Southeast Asian for corn production for use in their ethanol plant (largest in the world).

Oil Palm and Forest Cover in Borneo SOURCE: Jason Clay/World Wildlife Foundation

Biofuels and Livelihoods Potentials for livelihood generation and rural development from bioenergy Need to ascertain immediate and longer-term prospects for bioenergy Market restructuring and reaction to bioenergy How can small farmers maximize benefits from bioenergy? Produce may shift from one market to another, depending on the price, leading to disruptions in market chain. Farmers may shift from corn to sugar to avail of better prices for sugar for ethanol use; corn mills close down, farmers have to ready market if sugar or ethanol prices fall. Investors in ethanol plans may also be caught in a bind if farmers suddenly decide to shift production to other crops. Ensure that the cost to produce a liter of ethanol is much less than the amount of ethanol and energy produced. 1 litter fossil fuel used to produce 8 liters ethanol from sugarcane, vs. corn at 1:2. Prospects for increased land area for cultivating feedstock not good due to climate change and other agroclimatic factors and limits. Feedstock production may require large-scale farmers leading to displacement of small farmers. Chinese investors looking for land in Southeast Asian for corn production for use in their ethanol plant (largest in the world).

CONCLUSIONS Plan carefully Minimize risks to farmers and the environment Maximize environmental, livelihood, developmental and other benefits from bioenergy Produce may shift from one market to another, depending on the price, leading to disruptions in market chain. Farmers may shift from corn to sugar to avail of better prices for sugar for ethanol use; corn mills close down, farmers have to ready market if sugar or ethanol prices fall. Investors in ethanol plans may also be caught in a bind if farmers suddenly decide to shift production to other crops. Ensure that the cost to produce a liter of ethanol is much less than the amount of ethanol and energy produced. 1 litter fossil fuel used to produce 8 liters ethanol from sugarcane, vs. corn at 1:2. Prospects for increased land area for cultivating feedstock not good due to climate change and other agroclimatic factors and limits. Feedstock production may require large-scale farmers leading to displacement of small farmers. Chinese investors looking for land in Southeast Asian for corn production for use in their ethanol plant (largest in the world).