through the expansion of first generation biofuels, increasingly draw on the same resources. The FAO-OECD’s view on second
generation biofuels is largely limited to the expectation that they will add little to supply until the very end of the forecast period to 2020. This depends on the rate of technological progress and investment, making even the limited end-of-outlook contribution uncertain. Second generation biofuels have been ‘five to six years off commercial production’ for at least – if not more than – well, five to six years. Moreover, it is by no means clear that second generation biofuels based on non- food energy crops resolve the competition between food and fuel.
... it is by no means clear that second generation biofuels ... resolve the competition between food and fuel
Although there are many different
technologies under development, those based on energy crops still need land and water. As the FAO-OECD states, food production needs to extend into low productivity regions and more marginal land. This, too, is the supposed target area for many second generation biofuels, and they will suffer the same problems. Lower agricultural productivity means tougher economics. In reality, second generation energy
crops will compete for the best land just as much as the first generation. If, as Padella argues, the net welfare benefits for first generation biofuels are negative for only a small reduction in emissions, and the trade-offs between food and energy security also start to become more clearly negative, then food is likely to win out. No matter how essential energy is,
food comes higher up the hierarchy of immediate human needs and that is increasingly likely to be reflected in policy terms. The farmer will always be the last one in the balloon. •
Ross McCracken is Editor, Energy Economist, with Platts in London.
www.platts.com
David Everitt President, Global Tractor and Turf Products Deere & Company
Dr. Gerald A. Bange
Chairperson of the World Agricultural Outlook Board,
Office of the Chief Economist USDA
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