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Making sure that biofuel development
benefits small farmers and communities

O. Dubois

Olivier Dubois is Senior Rural Institutions Officer and Coordinator of the Bioenergy Group, Environment, Climate Change and Bioenergy Division, Natural Resources Management and Environment Department, FAO, Rome.

Adapted from the author’s paper “How good enough biofuel governance can help rural livelihoods: making sure that biofuel development works for small farmers and communities”, an unpublished background paper for FAO’s State of Food and Agriculture 2008.

Some suggestions on how to achieve biofuel development that favours sustainable rural livelihoods.

The quest for sustainable biofuel systems has increased tremendously over the past few years. Concerns about potential negative effects, such as deforestation and competition between food and biofuel production, have led to the demand for sustainability instruments such as standards, criteria and indicators to be applied through mandatory regulations and/or voluntary schemes such as certification.

To ensure that biofuels contribute to the Millennium Development Goals, and in particular to the first goal on food security and poverty reduction, it is important to ensure that biofuel development at least does not harm, and preferably favours, the livelihood strategies of small-scale producers and communities in rural areas. This article addresses what it takes to achieve biofuel development that favours sustainable rural livelihoods.

Biofuel systems are complex because:

Biofuel development is also strongly influenced by current global trends such as transition to market economies, globalization, high and volatile fossil fuel prices and rising concerns about climate change. Yet biofuel development should be geared to people’s livelihoods as well as to global and national energy needs. Livelihoods are sustainable (Ashby and Carney, 1999) when they:

The article briefly discusses governance mechanisms that can ensure that small farmers and communities in rural areas do not lose out from the implementation of biofuel schemes.


Biofuel systems can be developed in diverse land-use situations (Figure 1). Conventional management methods are efficient in differentiating these land uses according to physical criteria. However, actual land uses change not only according to physical factors but also because needs change as demands from society, market opportunities and stakeholders’ entitlements evolve. It is therefore important to consider the dynamics of land uses when assessing their environmental, economic and social impacts. Table 1 illustrates this through the different possible trajectories of forest cover, income and population density. In particular, it shows that different land cover trajectories are caused by and contribute to livelihood needs in different ways, and change over time.

It is increasingly accepted that modern policies and planning strategies regarding land use and natural resource management should account for “unpredictables” and “unknowns”, hence uncertainty in land use and natural resource management (Dubois, 2003). They should be adaptive, following a learning process and involving continuous monitoring of the dynamics of environmental and socio-economic changes. And they should take into account the political dimension of land use and natural resource management, including power relationships, and develop approaches to deal with this dimension.

Uncertainty concerns not only ecological but also socio-economic circumstances, leading to different forms of vulnerability in rural areas. The aim of sustainable development should therefore be to manage, in time and space, change resulting from interactions among ecological, economic and socio-political factors.

Land-use spectrum as basis for biofuel development


Approaches and instruments to achieve sustainable biofuel development can be characterized according to their mandatory or voluntary character as well as the scale of their application, as illustrated in Figure 2 (Van Dam et al., 2006).

The performance of regulatory and voluntary instruments in terms of small farmers’ and communities’ livelihoods cannot yet be evaluated for biofuel development on a global scale because it is so recent, but lessons can be drawn from other types of land uses. Experience with forest resource management, for instance, has suggested that:

Most of the current work on instruments for sustainable biofuel development is driven by voluntary initiatives
(see Box below). These will have to be backed by the power of law and enforcement to have some chance of mitigating negative impacts of biofuel development. In many countries the judicial process is slow. Legal costs are often beyond the capacities of weaker groups in rural areas such as small-scale farmers and indigenous people, and enforcement of their rights may be hindered by links between powerful investors and political elites (UNDP, 2007).

Possible approaches to the implementation of policies for sustainable biofuel development

Example of a multistakeholder process: the Roundtable on Sustainable Palm Oil guidance for smallholders

The Roundtable on Sustainable Palm Oil (RSPO) (see is a global association of organizations promoting open dialogue throughout the palm oil supply chain, involving oil-palm growers, palm-oil processors and traders, consumer goods manufacturers, retailers, banks and investors, environmental and nature conservation non-governmental organizations (NGOs) and social and development NGOs.

The focal activity of RSPO has been the development of practicable principles and criteria for production of sustainable palm oil. Its strengths include its transparent, inclusive, consensus-based process, and its rapid progress in developing and field-testing the principles and criteria.

To encourage the engagement of smallholders, smallholders’ organizations, non-company extension services and growers’ associations, RSPO formed a Smallholder Task Force which works to:

  • ensure that the association’s materials are translated into the major languages of the main countries where smallholders engage in oil palm cultivation;
  • carry out diagnostic surveys of smallholder issues and views;
  • test the RSPO principles and criteria with smallholders;
  • hold open consultations;
  • propose revised principles and criteria to RSPO.

Source: Vermeulen and Goad, 2006; RSPO, 2007.


Biofuel has significant potential to promote rural development (Box opposite), especially when it uses locally produced feedstock, through:

However, it is a challenge to develop biofuel systems that will truly satisfy local needs and contribute to poverty reduction and food security. For example, the connections among employment, environmental impacts and beneficiaries of the energy produced are strictly local and could be made clear to everyone, but this rarely happens when planning and implementation are supply driven and top-down. Moreover, rural energy should be part of a much broader development approach if it is to have positive and sustainable impacts on the rural poor.

The following ingredients seem essential for successful community biofuel development projects that fulfil local needs (UNDP, 2000; Forsyth, 2005): participatory approaches involving a broad cross-section of the community, including the poorest groups;

Getting the financial mechanisms right is especially crucial and complex when dealing with the rural poor. Subsidies should be transparent and linked to the economic development they are supposed to promote (UN-Energy, 2007).

Example of a community biofuel development scheme:
fostering jatropha biofuel in Malian villages

Mali is among the poorest countries in the world and has a highly unequal income distribution. It is land-locked and has few export opportunities. Sixty-five percent of the land area is desert or semi-desert, and 99 percent of the rural population lacks energy services, which are vital to increase productivity, add value to agricultural produce, increase income and enable rural people to escape from poverty.

A 15-year project in the township of Garalo aims set up electricity generators fuelled by jatropha oil for 10 000 people and to reduce village poverty. The population is mainly engaged in agriculture (mostly millet, sorghum and rice, as well as cotton for income generation), raising cattle and fishing. Electricity is required to pump water for irrigation, to operate agricultural processing equipment, to chill vegetables and for lighting and refrigeration services in small shops and restaurants. Jatropha (mainly Jatropha curcas) is well known in Mali where it is used for protective hedges, erosion control and traditional soap-making. The project will implement 1 000 ha of plantations of jatropha and other oil-producing plants and will provide training at different levels to ensure quality of the processed oil. Expected environmental benefits include carbon-dioxide emission savings of 9 000 tonnes per year as well as protection of soil against erosion to combat deforestation and desertification.

In the village of Tiécourabougou, the Mali-Folkcenter Nyeeta, a Malian non-governmental organization, has launched “energy service centres” based on jatropha. Some 20 ha of plantations grow seeds to produce jatropha oil for uses such as millet grinding and battery charging by villages within a 20-km radius.

The money spent on locally grown fuel stays in the community to stimulate the local economy. On a macro-economic level, this implies a reduction of the country’s expenses on imported fossil fuels, saving hard-earned foreign currency reserves.

Source: FACT, 2007; UN-Energy, 2007.


The role of government can include, for example (ESMAP, 2005; Dubois and Lowore, 2000):


Trade-offs between different interests will often have to be made at the interface between sustainable biofuel development and sustainable livelihoods. The key question is who wins and who loses from biofuel development, with a particular emphasis on making sure that disadvantaged rural groups do not lose out. Successfully addressing this question requires the development of “good enough” local governance mechanisms (both formal and informal) that ensure adequate and sustained bargaining power for these groups. 

A matrix comparing the environmental, agronomic, socio-economic and policy aspects of alternative land-use systems, produced by the Alternatives-to-Slash-and-Burn Programme, helps understand the trade-offs between different land-use options according to different interests and concerns (Table 3).

Such a matrix could easily be adapted to assess different biofuel development options as a basis for multistakeholder negotiation.

An illustrative pyramid of governance elements necessary to achieve sustainable forest management (Mayers, Bass and Macqueen, 2005) is also applicable to sustainable biofuel development (Figure 3).

The lower tiers (basic policy and institutional elements) push, while the higher tiers (more sophisticated mechanisms that generate demand) pull, for sustainable biofuel development. Elements in the lower tiers are more numerous and often more fundamental to progress.

The pyramid’s foundations are less directly controlled by biofuel stakeholders, but it is crucial that these stakeholders understand the constraints and opportunities emanating from beyond the biofuel sector to enable them to argue their case and influence those with the power to improve the foundations.

Taking the construction analogy further, Mayers, Bass and Macqueen (2005) suggest five “plumbing and wiring systems” as necessary complements to the building stones:

The involvement of local communities and small farmers in the co-management of biofuel systems should be an important principle of biofuel policies and practice, and a major component of international biofuel aid programmes. However, in other natural resource sectors (e.g. forestry) and rural development, the initial enthusiasm for this principle has been tempered by experience and recognition of the challenges it presents – providing a lesson for biofuel development. These challenges include:

A multiple strategy is therefore required, combining:

Ultimately, policy implementation, institutions and stakeholders’ roles in biofuel development are all embedded in the local political and cultural context. Policies may address the issue of what is needed at the natural resource level, but it is the interactions between the assets, needs, institutions and relationships that determine how policies are to be implemented. This is therefore the level where capacity development should be given priority. The argument about ways to implement biofuel development usually concerns stakeholders’ assets and entitlements, and other local institutions, but progress often hinges on the quality of local stakeholders’ relationships, local politics and culture, and the influence of outside pressures, in short the balance of different interest groups.

Illustrative pyramid of necessary governance elements for sustainable biofuel development


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