On February 1st 2007, the Institut Français du Pétrole (French Petroleum Institute) organized a conference to discuss the future of biofuels. Apart from the issues devoted exclusively to energy, discussions were focused on two fundamental points:
> the risks induced by the competition between agricultural production destined for food use and production destined for non-food use (biofuels), particularly in terms of price volatility.
> the real impact of the production of biofuels on the environment.
The production of biofuels has direct repercussions on the prices of agricultural raw materials, as recent events have shown. The high levels of the production of maize for ethanol in the United States have led to sharp price increases of maize in Mexico and particularly of tortillas, which have risen by more than 400%, causing serious social unrest. This situation is not new. In 1989, Brazilian ethanol industries, within a context of surging world prices, chose to devote their production facilities to the non-food industry, causing serious malfunctioning of the market and aggravation of price volatility.
The production of biofuels has an ecological impact also, because in many regions in the world, and notably in Brazil, the increase in surface area necessary for the production of ethanol has led to a decrease in areas available for pasture. The pastureland has therefore been moved, often towards the Amazonian forest, casting doubt on the benefits and results of this source of energy in terms of sustainable development.
Although biofuels represent an interesting market for farmers today because of the current favorable international geopolitical context, increased oil prices and government tax incentives, they do not provide a solution to the problems facing world agriculture today. In fact, their non-regulated development could aggravate the already significant downward spiral towards poverty and famine, increase price volatility of most basic agricultural raw materials, and prevent world agriculture from fulfilling its principal role, which is to feed people!
This is why it is necessary to create world governance of agriculture and tools to regulate international agricultural markets.
WOAgri’s objective, through the construction of the NAR model and the NAR rating agency, is to:
> measure the collective costs induced by the production of biofuels, and particularly its environmental consequences
> perform optimal arbitration in each region between the production of ethanol for food products and the production of ethanol for non-food products, in order to prevent the situation that has occurred in the United States and Mexico.
> act in order to anticipate.
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