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    At the 148th Meeting of the OPEC Conference, the oil exporting cartel decided to leave its production level unchanged, sending crude prices spiralling to new records (above $104). OPEC "observed that the market is well-supplied, with current commercial oil stocks standing above their five-year average. The Conference further noted, with concern, that the current price environment does not reflect market fundamentals, as crude oil prices are being strongly influenced by the weakness in the US dollar, rising inflation and significant flow of funds into the commodities market." OPEC - March 5, 2008.

    Kyushu University (Japan) is establishing what it says will be the world’s first graduate program in hydrogen energy technologies. The new master’s program for hydrogen engineering is to be offered at the university’s new Ito campus in Fukuoka Prefecture. Lectures will cover such topics as hydrogen energy and developing the fuel cells needed to convert hydrogen into heat or electricity. Of all the renewable pathways to produce hydrogen, bio-hydrogen based on the gasification of biomass is by far both the most efficient, cost-effective and cleanest. Fuel Cell Works - March 3, 2008.


    An entrepreneur in Ivory Coast has developed a project to establish a network of Miscanthus giganteus farms aimed at producing biomass for use in power generation. In a first phase, the goal is to grow the crop on 200 hectares, after which expansion will start. The project is in an advanced stage, but the entrepreneur still seeks partners and investors. The plantation is to be located in an agro-ecological zone qualified as highly suitable for the grass species. Contact us - March 3, 2008.

    A 7.1MW biomass power plant to be built on the Haiwaiian island of Kaua‘i has received approval from the local Planning Commission. The plant, owned and operated by Green Energy Hawaii, will use albizia trees, a hardy species that grows in poor soil on rainfall alone. The renewable power plant will meet 10 percent of the island's energy needs. Kauai World - February 27, 2008.

    Tasmania's first specialty biodiesel plant has been approved, to start operating as early as July. The Macquarie Oil Company will spend half a million dollars on a specially designed facility in Cressy, in Tasmania's Northern Midlands. The plant will produce more than five million litres of fuel each year for the transport and marine industries. A unique blend of feed stock, including poppy seed, is expected to make it more viable than most operations. ABC Rural - February 25, 2008.

    The 16th European Biomass Conference & Exhibition - From Research to Industry and Markets - will be held from 2nd to 6th June 2008, at the Convention and Exhibition Centre of FeriaValencia, Spain. Early bird fee registration ends 18th April 2008. European Biomass Conference & Exhibition - February 22, 2008.

    'Obesity Facts' – a new multidisciplinary journal for research and therapy published by Karger – was launched today as the official journal of the European Association for the Study of Obesity. The journal publishes articles covering all aspects of obesity, in particular epidemiology, etiology and pathogenesis, treatment, and the prevention of adiposity. As obesity is related to many disease processes, the journal is also dedicated to all topics pertaining to comorbidity and covers psychological and sociocultural aspects as well as influences of nutrition and exercise on body weight. Obesity is one of the world's most pressing health issues, expected to affect 700 million people by 2015. AlphaGalileo - February 21, 2008.

    A bioethanol plant with a capacity of 150 thousand tons per annum is to be constructed in Kuybishev, in the Novosibirsk region. Construction is to begin in 2009 with investments into the project estimated at €200 million. A 'wet' method of production will be used to make, in addition to bioethanol, gluten, fodder yeast and carbon dioxide for industrial use. The complex was developed by the Solev consulting company. FIS: Siberia - February 19, 2008.

    Sarnia-Lambton lands a $15million federal grant for biofuel innovation at the Western Ontario Research and Development Park. The funds come on top of a $10 million provincial grant. The "Bioindustrial Innovation Centre" project competed successfully against 110 other proposals for new research money. London Free Press - February 18, 2008.


    An organisation that has established a large Pongamia pinnata plantation on barren land owned by small & marginal farmers in Andhra Pradesh, India is looking for a biogas and CHP consultant to help research the use of de-oiled cake for the production of biogas. The organisation plans to set up a biogas plant of 20,000 cubic meter capacity and wants to use it for power generation. Contact us - February 15, 2008.

    The Andersons, Inc. and Marathon Oil Corporation today jointly announced ethanol production has begun at their 110-million gallon ethanol plant located in Greenville, Ohio. Along with the 110 million gallons of ethanol, the plant annually will produce 350,000 tons of distillers dried grains, an animal feed ingredient. Marathon Oil - February 14, 2008.


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Thursday, March 06, 2008

Agricultural income in Finland increased by 10% in 2007 - biofuels give farmers a boost

An interesting case study of the major benefits of the growing biofuels market comes from Finland. There, farmers are at last seeing major income increases from growing crops, after years of low agricultural prices. By extention, the findings might be extrapolated to all rural populations in the future. In the least least developed countries, they make up more than half the population. And 75% of the world's poor are farmers. Pushed into endemic poverty for decades, the new biofuels market finally offers them some hope. Some analysts even go so far as to state that biofuels can help end global hunger, a largely rural phenomenon.

According to the MTT Agrifood Research - an expert body operating under the Finnish Ministry of Agriculture and Forestry - agricultural income increased by almost ten percent last year compared to the previous year, as indicated MTT's overall calculations for agriculture and horticulture. In 2007, agricultural income reached €988 million, while in 2006 it amounted to about €900 million. Profits in the grain market reached records.

Agricultural income, which indicates the return on agricultural entrepreneurs’ labour input and capital investment, thus saw an increase for the first time since 2002. Despite the increase, agricultural income in 2007 fell almost 14 percent short of the figures in 2002.

The central factor in the rise in agricultural income is the increase in producer prices both in plant farming and in domestic animal production. On the other hand, a slight decrease was recorded in the volume of agricultural and horticultural subsidies compared to the previous year.

Costs continued to rise rapidly last year, and as a result the increase in income was almost two thirds lower than it would have been otherwise. Total costs rose by over five percent to almost €3.3 billion. Especially feed costs, which rose especially rapidly at the end of 2007, increased total costs. The cost of construction also continued to rise faster than the standard rate of inflation. Furthermore, an overall rise in the level of interest rates and increased borrowing pushed interest costs up.

According to MTT’s calculations, the overall agricultural and horticultural income last year amounted to slightly over €4.3 billion, which is a six percent increase from the previous year. This increase in income resulted from a rise in producer prices of grain, milk, meat and eggs, in particular.

Sales proceeds from grain almost doubled in 2007. The increase in income is both a result of the increase in grain volumes due to good crops and the 50-percent increase in the average price. Grain prices are expected to remain high throughout the year, as the supply of grain on the global market is scarce compared to demand:
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In 2007, the price of pork increased by an average of five percent, the price of beef by four percent, and the price of poultry by two percent compared to the previous year. The growth in production volumes of pork and poultry further increased the income.

The eight percent increase in the producer price of milk boosted sales proceeds of milk by almost six percent, despite the production volume being two percent lower than in the previous year.

Horticultural income only increased by just over 0.5 percent compared to the previous year. There was a clear increase in the value of open-field production, whereas returns from greenhouse production dropped by over four percent. Berry and apple crops were quite disappointing. Due to heavy rain, grey mould ruined some strawberry crops. However, the slightly higher prices of strawberries compared to the previous year partly compensated for the loss of crops.

High agricultural prices are the result of increased oil prices, rising demand from Asia and the increased production of biofuels.

A detailed report from the United States on farm incomes in 2007, also showed the new biofuels market has led to all time record net farm incomes. The era of depressed prices is over, leading to major benefits to the farming sector (previous post).

It is too early to tell whether these effects will help the world's poor, the vast majority (75%) of who make a living from agriculture. These rural populations have been kept in poverty for decades because of declining world prices for agricultural commodities. But current high prices do not immediately translate in an increased capacity to tap opportunities in the market. Poor farmers often lack market access and infrastructures to do so.

However, over the longer term, many analysts agree that the biofuels market offers great opportunities for development in poor, rural countries in the South (more here). Some have gone so far as to say that the biofuels market can help end hunger - a largely rural phenomenon (previous post).

References:

MTT Agrifood Research: Agricultural income increased by almost ten percent - March 6, 2008.

Biopact: Biofuels lead to all-time record farm income in the United States - December 17, 2007

Biopact: Study: Global Biopact on biofuels can bring benefits to both rich and poor nations - February 20, 2008

Biopact: Worldwatch Institute: biofuels may bring major benefits to world's rural poor - August 06, 2007



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