Australian Contribution to the High Level Panel of Experts for Food Security and Nutrition (HLPE) report on Biofuels and food security
The draft HLPE report on ‘Biofuels and Food Security’ provides a useful overview and highlights well the range of key issues relating to biofuels and their implications for food security. It reads as a good summation of the state of play across countries and the scientific/economic perspectives currently influencing the biofuel agendas including research. It is largely a factual exposition which effectively illustrates the conflicting interactions between biofuels and food security in a world of finite land and energy resources.
The draft policy recommendations acknowledge the potential distortions that mandates, subsidies and tariffs can have on the market for biofuels. The report correctly reflects that the Australian Government has not introduced a national mandate, and that New South Wales is the only state to have one.
However, Australia considers that the analysis of the concept of food security in the draft paper is limited and as a result the recommendations are also limited. For example, the paper analyses food security arising from policy-based biofuels markets in terms of the FAO framework for assessing the determinants of food security – (i) access (i.e. food expenditure/income); (ii) availability (resources available for food production – mostly land and water); (iii) stability (access and availability guaranteed through time); and (iv) utilization (access to resources which enable food to be appropriated). However, the report does not analyse biofuels policy-induced food insecurity in the context of other factors impacting on food security, such as restrictive trade regimes, inappropriate price or output regulation, stockpile policies, dietary preferences, insecure land tenure, taxes on food production etc. Such an analysis is required to determine the significance of biofuels policy-induced food insecurity in relation to these other factors influencing food insecurity.
Biofuel promotion also has economy-wide impacts aside from its direct impact on food production and price. For example, replacing some of the liquid petroleum fuel market with biofuels leaves a larger amount of the hydrocarbon market available for the production of agricultural fertilizers, with consequent impacts on price and supply of the inputs to food production. It would be useful to look at the economy-wide impacts of subsidies to biofuels to understand these effects.
A biofuels mandate may be a good policy for quickly developing a biofuels market. However, unless biofuels are able to compete in the fuels market in the medium to long-term absent the mandate, it is generally not good policy in the longer term.
Research related comments
The Australian government submits the following general research related matters for the HLPE’s consideration:
We also submit the following specific comments:
Specific comments on the recommendations of the paper
Australia makes the following comments on the following recommendations of the report:
Australia recognises that global demand for biofuels is one of the many factors that may affect food security and food prices.
The government believes that inflexible mandates for biofuels are polices contrary to creating an open trading market. We would caution against major market intervention or regulation noting the potential for market distortion.
The Australian biofuels industry does not impact significantly on food prices in Australia due to the small scale of the industry and because of the emphasis on advanced biofuels which are derived from low cost, non-food crops, algae and agricultural wastes and would assist in mitigating competition between food and fuel.
Even if there was a substantial increase in demand for biofuels necessitating their production from traditional food crops, such as grains and sugar, it is unlikely to significantly affect food prices domestically as these commodities trade in global markets.
Australia’s comments: The Australian Government has a policy interest in land use changes and recognises that this is a significant policy issue that requires careful consideration. The Australian Government employs a whole-of-government approach by working closely with states and territories on land use planning.
In terms of foreign direct investment, Australia has well-established arrangements and regulatory frameworks to protect landholders, investors and communities.
The recommendation is not clear as to whether it is referring to integrated land and water management, or the treatment of land and water as a single inseparable property right. The latter would be in conflict with Australia’s current water reform agenda under the National Water initiative, which guides the separation of land and water rights to allow water to be allocated to its highest value use. We propose inserting the word “management” after the phrase “land and water”.
Australia’s comments: The Australian Government agrees with this recommendation.
Australia’s comments: Australia questions the suggestion of a precondition to adhere to the broadly-owned RAI principles. See recommendation two comments regarding investment in Australia. Investment–whether foreign or domestic–in the agricultural sector can bring significant benefits and opportunities for farmers. The Australian Government does not support an approach that would impose blanket bans or restrictions on foreign investment.
Australia’s comments: Australia is participating in the development of an International Standards Organisation (ISO) Standard for Sustainability Criteria for Bioenergy which covers the economic, environmental and social aspects of sustainability. The ISO standards involve some 30 countries of which many are from developing nations and experience many of the issues identified in the report. The ISO standard seeks to address these issues whilst still allowing for the development of a biofuels industry in a sustainable manner.
Australia’s comments: The Australian government is targeting investment in advanced biofuels which have the potential to build a sustainable new industry that could increase national fuel security, assist in reducing greenhouse gas emissions and stimulate regional development.
We are also working with the Biofuels Association of Australia and the ISO to develop internationally agreed sustainability criteria that can be applied to industry to ensure that support for biofuels does not compromise sustainable production practices and will provide greater impetus for move towards advanced biofuels. Voluntary certification schemes can be a useful mechanism for producers to demonstrate their environmental credentials to concerned consumers.
Most Australian exporters subscribe to either the International Sustainability and Carbon Certification Scheme (ISCC) or the Biomass Biofuel Sustainability Voluntary Scheme (2BSVS), which are formally recognised by the European Commission, to supply certified canola to the EU. However, exporters regard the cost of these schemes as an expensive and unnecessary impost, believing that the certification requirements should only be applied to countries with unsustainable production systems.
Australia’s comments: Australia agrees that developing a biofuel’s policy based on the typologies of a country is beneficial. In December 2011, the Australian Government released the Strategic Framework for Alternative Transport Fuels. The Framework establishes a long term approach to a market led adoption of alternative transport fuels in Australia in the context of maintaining Australia’s transport fuel security while moving towards a lower carbon economy by 2030.
In regards to identifying trade-offs, the need for recommendation does not currently apply to Australia because, as previous mentioned, we believe our biofuel policies do not contribute to global food security concerns or have any significant impact of food prices because of the small scale of the Australian industry and because most Australian biofuel production is derived from waste products.
Australia’s comments: The recommendation assumes the options are between using food crops or non-food crops for biofuel (ignoring for the moment the merits, or otherwise, of biofuel mandates etc). However, there is some research, including in Australia, into the viability of using residues from crops grown for other purposes as the feedstock for biofuels. This, ostensibly at least, solves the problem of displacing other land uses and should be addressed in the report.
Australia’s comments: The Australia government is targeting investment in advanced biofuels which have the potential to build a significant and sustainable new industry that could increase national fuel security, assist in reducing greenhouse gas emissions and stimulate regional development. Therefore the recommendation to prioritise the development of non-biomass renewable fuels cannot be supported as Australia invests in the research, development, demonstration, deployment and commercialisation of various renewable energy and related technology innovations.
Australia’s comments: Australia agrees with this recommendation.
Structure of the report
Some of the recommendations/conclusions at the beginning of the draft report do not seem to be fully reflected in the report itself. In particular, the paragraphs/recommendations referring to national mandatory biofuel targets and subsidies that impact negatively on food prices: it would be helpful to show more clearly in the report the basis of the policy recommendations that have been reached. We would also like to suggest that the proposed recommendations/conclusions come at the end of each of the chapters of the report rather than at the beginning of the report.
The Australian Government thanks the HLPE for developing a zero draft of the ‘Biofuels and Food Security’ report and is happy to engage with the HLPE to provide comment on future drafts.
Related links and resources:
Biofuels and Food Security - A consultation by the HLPE to set the track of its study
Committee on World Food Security (CFS)
High Level Panel of Experts (HLPE)
The High Level Panel of Experts on Food Security and Nutrition (HLPE) Key Elements