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Executive Summary

In line with the work of the Commission on Sustainable Development (CSD), Agenda 21 and other energy-related international agreements, FAO has emphasized the integration of energy with agricultural policies, as a means of working towards the sustainable and rational use of energy in agriculture1. The purposes of this report are to examine the links between energy and agriculture in terms of the energy requirements for greater agricultural productivity in developing countries; the energy needs of rural populations; and the CO2 mitigation (substitution) function that agriculture can provide in the form of biomass2. The CSD-9 session in April 2001 will include the sectoral theme atmosphere/energy and the economic theme energy/transport. The report draws from the latest thinking and advancements in the analysis of energy and agriculture and is submitted as a contribution of FAO to the CSD-9 process and its follow-up.

Energy has a key role in economic and social development

It is a paradigm of development policy that without appropriate energy services there can be no true economic development, yet around 2 billion people world-wide do not have access to modern forms of energy. Aid in support of national efforts includes a variety of rural energy programmes to improve energy provision, often through rural electrification. Decoupling growth in energy consumption per capita from economic growth and focussing on the appropriate provision of quality energy services to assist economic development is now seen as key to future evolution of the energy sector. Increased access to energy services can help reduce poverty, but much of the effort thus far has focussed primarily on household energy use, with less attention being paid to energy services for rural industries and agriculture.

Energy has a major impact on the global and local environment

Agenda 21 and the UNFCCC have highlighted the adverse local and global impacts of energy supply and end-use on the environment. The needs of sustainable development and the use of clean energy technologies are well recognised. Actions at national and international levels to tackle the problems of air quality and climate change are being developed, and these will require new directions for both energy policy and technology and the nature of investment decisions in energy supply and end-use systems. Energy projects in developing countries have the opportunity to benefit from funding via the Global Environment Facility, and for their promoters to participate in the Clean Development Mechanism. These instruments offer the prospect of further international cooperation in rural energy development in order to achieve environmental, social and economic goals.

Insufficient modern energy is available for agriculture and this affects food security

In agriculture, a wide range of modern and traditional energy forms are used directly on the farm, e.g. as tractor or machinery fuel, and in water pumping, irrigation and crop drying, and indirectly for fertilizers and pesticides. Other energy inputs are required for post harvest processing in food production, packaging, storage, transport and cooking. Direct energy use in agriculture accounts for only a relatively small proportion of total final energy demand in national energy accounts3. In OECD countries, the figure is around 3-5%, and in developing countries between 4-8%. Energy for agricultural practices in many developing countries continues to be based to a large extent on human and animal energy, and on traditional woodfuels. Empirical evidence suggests that the potential gains in agricultural productivity through the deployment of modern energy services are not being fully realized in developing countries. This reduces both the quantity of food produced, and also the quality of food. Rural people are sometimes forced to eat either uncooked food or food that can easily be cooked but which may not give full nourishment.

There is a general lack of rural energy development policies that focus on agriculture

Many energy policies and interventions in developing countries are designed for the needs of industry, transport and urban infrastructures, whilst agricultural energy requirements are frequently overlooked. Although agriculture contributes significantly to economic and social development, often accounting for around 30% of developing country GDP, energy provision in agriculture has not received the attention that the sector deserves. Energy for agriculture needs to have a higher priority in rural policy and technology assessment work in developing countries than has been the case hitherto.

Bridging the energy gap by improving rural energy services

The analysis in the report shows that there is an energy gap in the agricultural sector that needs to be bridged. Extending grid electrification into rural areas can bring social and economic benefits, but for many rural communities there is no immediate prospect of being connected to the central electricity grid, and other commercial energy sources are often too expensive for poor people. Where electrical load densities are low, off-grid diesel generators can be cost-effective. Another means of tackling this is to make use of the energy resources that are available locally to rural populations through modern renewable energy systems. These include improved modern biomass conversion to generate electricity, and to produce heat and liquid fuels. Other renewable energy sources such as solar energy, wind and small-scale hydropower can also be exploited.

Potential energy savings can also be made through changes in the design and use of tractors and other farm machinery and improvements in irrigation, drying, livestock production and horticulture. Conservation tillage, which involves little mechanical tillage, is an approach to reverting soil degradation by promoting soil organic matter through permanent soil cover. Improved energy efficiency in mechanical handling equipment and in drying and separating operations is also important. Attention to these factors can help achieve a greater degree of self-sufficiency in developing countries, by reducing the need for imports of fossil fuels, and promoting the development of locally sourced energy supplies.

An energy transition is needed in rural areas

Given the spread of technology and general economic development, it can be expected that traditional energy technologies will co-exist with a gradual improvement and introduction of new technologies accompanying the rural development process. There is also the prospect of technological `leapfrogging' which could give developing countries the chance to commercialize new technologies relatively quickly. But there is a need for more urgent action, due to the low rate of economic improvement in many rural areas and the drift of rural populations to peri-urban and urban areas in developing countries. Agriculture can have a major role in supporting sustainable rural livelihoods through the increased provision of locally sourced bioenergy. Such an approach can assist more broadly in rural development as well as improving food security.

The energy function of agriculture should be exploited

The role of agriculture as an energy supply resource is a crucial factor in taking forward this energy transition, and, indeed, in achieving higher sustainability in the rural areas of industrialized countries. The provision of locally sourced energy through the exploitation of energy crops in modern biomass systems could give an attractive means of stimulating rural economic development, whilst at the same time offering an option for improved energy supply. Agriculture can also make a major contribution to climate change mitigation by CO2 substitution since biomass is a carbon-neutral energy source over a short time scale. Biomass offers the prospect of fulfilling a dual role by combining sustainable development in rural areas and climate change mitigation. Projects funded via the Global Environment Facility, Joint Implementation and the Clean Development Mechanism could make use of agriculture's contribution to global climate change mitigation and give local economic, social and environmental benefits. Agriculture's contribution as a carbon-neutral energy resource should be exploited as one solution in conjunction with other greenhouse gas emission control technologies.

Advancing modern bioenergy technology

Large-scale production of bioenergy would initially require the use of agricultural and forest residues, and eventually dedicated energy crop plantations. The cost-effectiveness in any particular investment situation is likely to depend on site-specific opportunities. The long-term effects of bioenergy exploitation, through dedicated plantations, on soil quality, fertility and biodiversity may be adverse. There are also potential conflicts with other land uses. But the CO2 substitution opportunity may tip the balance in favour of bioenergy investments if they are regarded as being of global importance, especially if GEF funding, or appropriate value for ERUs and CERs for bioenergy projects obtained through Joint Implementation and the Clean Development Mechanism, can be used to support the investment costs.

There is, therefore, a balance to be struck between the advantages and disadvantages of bioenergy, and this is reflected in both optimistic and pessimistic views regarding the uncertainties about how bioenergy systems can provide cost-effective local and global benefits. These uncertainties have restricted the development and commercialization of modern biomass technologies. However, with the significant environmental pressures to redirect the global energy economy onto a more sustainable path, there is a real and urgent need to reconsider policy choices and commitments in the energy sector. Actions to take the energy sector in new directions are vitally important, and the proposed steps listed below are a first stage in this process, which is applicable to the rural energy sector of developing countries.

It is clear that considerable efforts are needed in order to take forward the energy-agriculture nexus. The technological, environmental and social dimensions need to be further developed and assessed. It is hoped that, by drawing the attention of the CSD-9 to the potential of this nexus, and describing the advantages and disadvantages of modern biomass technologies, areas for action can be identified and implemented through cooperative efforts within the international community and with host developing countries.

A challenge and an opportunity

An integrated approach which exploits the synergies and dual role of agriculture as an energy user and an energy supplier needs to be developed. The links that energy and agriculture can make between sustainable rural livelihoods, local environmental protection and global environmental benefits are important issues to address. In order to mobilize the synergies and develop the energy function of agriculture:

Actions should be taken to:

1 This report uses the generic term 'agriculture' to cover agricultural, livestock, forestry and fishery activities.

2The report does not examine the CO2 mitigation function that agriculture provides in the forms of carbon storage in forestry or carbon soil sequestration.

3Excluding the energy used in food processing, packaging, transport and storage, and traditional energy sources such as woodfuel.

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