Using crops for fuel not food is driving up prices and risking hunger for millions, warns Oxfam

17th Sep 2012

Oxfam is calling on the UK government to push for the scrapping of European biofuel targets at a meeting of EU Energy Ministers today. 


In a new report published in advance of the Energy Ministers meeting in Cyprus, the international aid agency warns that European targets to replace fossil fuels with biofuels are contributing to the current spike in food prices by significantly increasing demand for certain crops, resulting in greater hunger and malnutrition in poor countries.

Oxfam's report reveals that the land required to power European cars with biofuels for just one year could produce enough wheat and maize to feed at least 127 million people.

Oxfam's call for an urgent u-turn on biofuel targets, comes at a time when the European Commission seems ready to act to limit the use of food crops for fuel. Current EU law requires that 10 percent of transport energy should come from renewable sources by 2020, with almost all of the quota expected to be met using biofuels made from food crops. New draft legislation, leaked to the media last week, suggests that the EU could limit the amount of crop-based biofuels that can be used to meet this renewable quota to five percent, but this will not be enough to prevent food price inflation, warns Oxfam.

Barbara Stocking, Oxfam's Chief Executive, said: "The EU must recognise the devastating impact its biofuel policies are having on the poorest people through surging food prices, worsening hunger and contributing to climate change. The UK government must act on the growing evidence and put pressure on other EU governments to scrap the current biofuel mandate now and not set any new targets.

Oxfam believes the findings of its report, The Hunger Grains, should intensify existing concerns about rising global food prices, with record highs reported this summer for staples such as corn and soy, which are used in the production of biofuels. 

Rising global food prices have the worst impact on poor people living in developing countries that rely heavily on food imports, some of whom spend as much as three quarters of their income feeding their families.  With the current EU biofuel targets set to double biofuel consumption over the next few years, Oxfam believes many more people worldwide will be plunged into poverty. 

The UK government's own analysis of the impact of meeting the EU target suggests that removing the mandate could reduce spikes in food prices, like the one currently being experienced as a result of the US drought, by up to 35 percent.

As well as hitting the world's poorest people hard, the EU's biofuel target is costing UK consumers through higher fuel prices. By 2020, it could cost UK consumers between £1bn and £1.9bn more per year, equivalent to £35 for every adult according to Oxfam.

"Big business is piling up the profits in the biofuels bonanza whilst millions of the poorest people are suffering increased hunger and poverty as a result - and UK consumers are paying at the pump. The problem will only get worse in the rush to meet the 2020 EU target," said Stocking.

 "With ultimate responsibility for the UK's biofuel policy, the new Secretary of State for transport, Patrick McLoughlin has a chance to make a difference to the lives of millions of hungry people - and save on UK fuel bills."

Recent evidence cited in Oxfam's report suggests that two thirds of large land deals globally in the past ten years are to grow crops that can be used for biofuels, such as soy, sugarcane, palm oil and jatropha. The commercial stimulus to meet the EU mandates by 2020 means that the land is often acquired quickly, leading to 'land grabs' concluded without the proper consultation or compensation for affected communities. Families are being forced from their homes and left without land to grow enough food to eat or make a living, which in turn makes them more reliant on food imports and therefore more exposed to rising prices.

The Hunger Grains also revisits questions about the environmental benefits of replacing fossil fuels with first generation biofuels. Growing crops for biofuels displaces other agricultural production onto forests, peatlands and grasslands - all of which keep greenhouse gases out of the atmosphere. Research suggests that ploughing up these 'carbon sinks' to meet EU biofuel mandates could be as bad for the environment as putting up to an extra 26 million cars on Europe's road.

Ends

For further information, copies of the report or to arrange interviews please contact:

Tricia O'Rourke on 01865 472498 or 07989 965359, torourke@oxfam.org.uk

Lucy Brinicombe on 01865 472192 or 07786 110054, lbrinicombe@oxfam.org.uk

 

Notes to Editors

1.   Oxfam Briefing Paper The Hunger Grains: The fight is on. Time to scrap the EU biofuel mandates

2.   Modelling of the impact of removing EU biofuels support on food price spikes in 2018, Department for Environment Food and Rural Affairs Can biofuels policy work for food security? (June 2012) Chris Durham, Grant Davies, Tanya Bhattacharyya http://www.defra.gov.uk/publications/files/pb13786-biofuels-food-security-120622.pdf

3.     High quality pictures & graphics

 

Biofuels facts & figures

  •         If the land used to produce biofuels for the EU in 2008 (when biofuels accounted for 3.5% of EU transport fuel) had been used to produce wheat and maize instead, it could have fed 127 million people for the entire year (Source: see report: page 16 and annex).
  • Soy and maize prices were at all-time highs in July (World Bank) and prices of cereals and oil remained at peak levels in August (FAO).
  • Modelling based on current plans for sourcing biofuels suggests that EU biofuel mandates could cost European consumers between €1.37bn and €2.15bn more by 2020, up to €30 per adult or approximately £35 for UK consumers (source).
  • By 2020, the EU's biofuels policies alone could push up vegetable oil prices by up to 36%, maize by up to 22%, sugar by up to 21%, oilseeds by up to 20% and wheat by up to 13 % (source).
  • Modelling of the impact of meeting 10% of demand for diesel using biodiesel suggests that, by 2020, Europe could require a fifth of all the vegetable oil produced globally just to meet its demand for fuel (source).
    •         Oxfam research in the Philippines shows that land being acquired for biofuels production in 2010 could instead be used to produce up to 2.4 million metric tonnes of rice, enough to make the Philippines self-sufficient in rice production.

 

Impact of biofuels around the world

 

  •         Ghana: In one jatropha plantation for biodiesel production, 69 families were thrown off their land, without being consulted or provided with any kind of compensation and 1,500 more families could lose land if the plantation develops as planned (source). The biofuels sector in Ghana is still in its infancy, but most biofuel crops grown are likely to be exported to the EU to make biodiesel.
  •         Paraguay: Each year 9,000 rural families are evicted by soy production and nearly half a million hectares of land are turned into soy fields. For the 44 families living beside huge soy plantations in Lote 8 in eastern Paraguay, farming has become almost impossible. Water has become increasingly scarce as local resources are used up irrigating the plantations. As the water table falls, the community has had to sink wells twice as deep into the ground to reach drinking water-they now only hit water after 20 metres, compared with an average of 10 before the plantations. More than half of the soy grown in Paraguay is exported to Argentina, and much of this is turned into diesel either in Argentina or in Europe to fuel Europe's cars.
  • Indonesia: Large-scale oil palm plantations are benefitting a small group of companies and local elites, while small scale farmers and people living in poverty are losing out. The way that oil palm is produced has led to air and water pollution, soil erosion and flooding. Human rights abuses, breaches of investor agreements with communities, and the destruction of environmental resources associated with the expansion of oil palm plantations has led to conflict in this country, which is one of the EU's main sources of biodiesel.

 

Oxfam's GROW campaign is calling for global action to fix a broken food system where 925 million people already go hungry every day. This could get worse in the face of dwindling natural resources, like land, the gathering pace of climate change and increasing food price volatility. www.oxfam.org.uk/grow