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ENERGY-SOUTH AFRICA: Food Security Hobbles Biofuel Strategy

by Sunday, Dec. 30, 2007 at 4:46 PM

JOHANNESBURG, Dec 18 (IPS) - Worried that it may be seen as insensitive to the food needs of Africa, the South African government, which is facing a general election in 2009, has chosen food security in framing a biofuel policy.

Stephanie Nieuwoudt

After months of dilly-dallying, a strategy for the biofuel sector was accepted by the cabinet last week. But the Thabo Mbeki government excluded maize, a life-saving export during times of recurring drought in Southern Africa.

Politics, according to independent observers and the lobby pushing for maize as a source of biofuel, influenced the announcement, which preceded the ongoing conference of the ruling African National Congress (ANC) to elect a new party leader.

"This decision was a complete surprise," said a shocked Andrew Makenete, president of the South African Biofuels Association (SABA). "The government not once during talks expressed the possibility that maize would be excluded. It was supposed to be the foundation of a South African biofuels project," he lamented.

SABA and Grain South Africa had lobbied for maize with government officials and Tito Mboweni, president of the South African Reserve Bank, who a few months ago had warned that a diversion of the staple for biofuels could lead to an increase in prices and threaten food security in the region.

"Although we do not want to presume to speak on behalf of government, it could be that the concerns raised by Mboweni influenced this decision," Makenete told IPS in an interview.

The decision was political, commented Emile van Zyl, professor of microbiology at the University of Stellenbosch, who has been at the forefront of a project to convert biomass into biofuel.

"Food security is not just a rational but also an emotional issue. With the ANC party conference in mid-December and a general election in 2009, the government was not taking any chances on being seen as insensitive to food security," he explained.

Grain South Africa's Wessel Lemmer said that South Africa produces 8.6 million tonnes of maize annually whereas it has a capacity of 12 million tonnes. Over a million hectares of available land are lying idle because of weak markets over the last two decades and production costs overstripping the income, he claimed.

"If we have a market for the potential three million tonnes," he pointed out, "we are making a huge contribution to economic growth in this country."

Moreover, according to Kobus Lindique, managing director of Monsanto sub-Sahara Africa, the transnational agro-giant, the government’s refusal to include maize in the biofuel strategy could have a negative impact on South Africa’s land reform policy.

By 2014, 30 percent of farm land has to be in the hands of black owners. But the transfer process has been very slow, sparking fears that the restive masses could resort to largescale takeover of agricultural holdings belonging to white farmers, as in neighbouring Zimbabwe.

According to Lindique, "the ethanol maize project (with a huge demand for maize) would have been the perfect opportunity for the government to settle black farmers on farms as part of the land reform policy."

The National African Farmers Union was also surprised. However, Molefe Mokoene, chief executive officer, said that since "we have not yet seen documentation for cabinet, we cannot speculate on reasons for the exclusion."

In South Africa, the private sector has shown willingness to invest in biofuels. A 100 million dollar bio-ethanol plant, the first of eight being planned, is under construction in Bothaville in the Free State province. However, when IPS tried to contact the president, Johan Hoffman, he was not available for comment.

Under the biofuel strategy, the government has reduced targets from 4.3 percent to two percent, from sources like sugar beet, sunflowers (for bio-diesel) and sugar cane (for the production of ethanol). Microbiologist van Zyl described the downward revision as "too low".

"South Africa uses 20 billion litres of fuel annually, of which 12 billion is petroleum and eight billion diesel. A two percent target will effectively translate to a production of only 400 million litres of fuel. This means that only one plant can be erected and that employment opportunities are limited," he asserted.

Erhard Seiler, chief executive officer of SABA, shared the view. "The economy of scale is too small. It does not make the biofuels strategy viable," he said.

SABA’s Makenete had challenged the food security concerns in an article in the Business Day newspaper. He rubbished the tendency to blame biofuels for price increases of commodities across the board as "pure hype".

He pointed to the 'OECD-FAO Agricultural Outlook 2007-2016' that highlighted lower world opening stocks, increased demand, drought and market inefficiencies for higher prices. (This report was produced jointly by the Organisation for Economic Co-operation and Development and the Food and Agriculture Organization of the United Nations.)

The 'Agricultural Outlook' warned that it would be premature to attribute a long-term rise in commodity prices to biofuels.

Pro-maize officials also opposed environmental concerns about the increase in maize production in a country like South Africa, where water has been a problem because of recurrent drought. According to Seiler, maize requires far less water than a guzzler like sugar cane, which the government has included in its biofuel strategy.

"At SABA we believe that a higher biofuel target would have ensured food security," he told IPS. "If there is a huge demand it increases production as more players enter the field to provide in the market for consumption and biofuel. And this, in turn, creates opportunities for the small farmer."

(In the original version of this story, wired earlier on Dec. 18, there was an error in paragraph 16. Please note that sunflowers are used in the production of bio-diesel, and sugar cane in the production of ethanol -- not vice versa, as initially stated.) (END/2007)

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