Farmers look to biofuel as WTO trade talks fail
Biofuels such as ethanol, biodiesel and solid bioenergy feedstocks offer a tremendous opportunity for development to farmers from the developing world. One condition for them to grab it, is a change in global trade rules, most notably the reduction of agricultural subsidies and tariffs in the U.S. and the E.U.
These trade talks are the object of the WTO's so-called Doha Development Round. But little progress has been made so far.
Now America's farmers are tiring fast of slow-moving world trade talks and many corn and soybean growers themselves look toward alternative energy programs as a more promising outlet for their produce, say some industry experts. The Bush administration recently announced a big initiative to find ways of breaking the United States' dependence on foreign oil, with corn- and soybean-produced fuels ethanol and biodiesel on the list for further research and development.
By contrast, the latest round of World Trade Organisation negotiations to lower trade barriers has limped on for some four years, repeatedly stalled by bickering between rich and poor nations over ways of opening global farm markets. "There's this almost defeatist attitude in the Midwest that Brazil has captured most world markets growth recently and the US WTO round proposal will significantly cut subsidies linked to production of specific commodities," said Robert Thompson, International Food and Agriculture Trade Policy Council head.
"Farmers are much more confident in ethanol's ability to contribute to their well-being than export market access, which they don't see as promising any sure payoff," he said.
President Bush set a six-year goal for making ethanol practical and competitive as an alternative fuel. US crude oil futures settled at $62.91 on Friday and hit a peak of $70.85 a barrel in August.
WTO scepticism
Farmers are sceptical about a new trade pact since the last cycle of WTO talks, known as the Uruguay Round, delivered little of what had been promised in cutting farm subsidies.
Timothy Reif, chief trade counsel on the House Ways and Means trade subcommittee, told a conference on Friday that even a successful Doha deal would not fix unfair trade practices such as the long-running problem of persuading Japan to restart imports of US beef following concerns about mad cow disease.
The livestock industry is a big client for corn growers.
"Trade is very important to the livestock industry, so we get excited about seeing our biggest customer have more marketplace to sell to. But it's easy to have some discouragement about the Doha round," said Jon Doggett, vice president of public policy at the National Corn Growers Association.
"The round has looked good at times and then you have meetings and things are not so good. There are some growers who look at the ethanol issue as something they can do very well with and see an awful lot of opportunity with," he said.
Biofuel caveats
But there are caveats to the relatively young biofuel industry, of which farmers should be aware, said Thompson.
"I don't think you'd see much expansion of this industry without government subsidies such as mandated use of ethanol in gasoline blends ... and protection against imports of cheaper ethanol that can be made from sugar in Brazil," he said.
In addition, world economic growth over the next half century is likely to lift several hundreds of millions of people out of poverty, meaning increased demand for meat and in turn for corn and soybean animal feed.
"There's going to be plenty of market demand for all the corn and soybean meal that efficient producers in North and South America can produce. I predict that by 2050 there will be real questions raised about the morality of burning food for fuel," Thompson said.
...And back to trade
Most growers interested in alternative fuels also realize that boosting trade is in their interest, said Gary Blumenthal, president of agricultural policy firm World Perspectives.
"Producers welcome demand from anywhere. They welcome ethanol because it means they no longer have all their eggs in the export basket but no smart producer would put all their eggs in the ethanol basket," he said.
Besides which, the booming ethanol market is itself fast becoming the next big trade topic.
Sen. Saxby Chambliss, head of the Senate agriculture committee, recently said opening the US ethanol market to competition from Brazilian imports could be good for industry.
Brazil's ambassador to the WTO, Clodoaldo Hugueney, told a discussion panel this week: "The US and Brazil should be trying to develop a greater strategic partnership in developing a world market for biofuel."
Source: Checkbiotech.org
These trade talks are the object of the WTO's so-called Doha Development Round. But little progress has been made so far.
Now America's farmers are tiring fast of slow-moving world trade talks and many corn and soybean growers themselves look toward alternative energy programs as a more promising outlet for their produce, say some industry experts. The Bush administration recently announced a big initiative to find ways of breaking the United States' dependence on foreign oil, with corn- and soybean-produced fuels ethanol and biodiesel on the list for further research and development.
By contrast, the latest round of World Trade Organisation negotiations to lower trade barriers has limped on for some four years, repeatedly stalled by bickering between rich and poor nations over ways of opening global farm markets. "There's this almost defeatist attitude in the Midwest that Brazil has captured most world markets growth recently and the US WTO round proposal will significantly cut subsidies linked to production of specific commodities," said Robert Thompson, International Food and Agriculture Trade Policy Council head.
"Farmers are much more confident in ethanol's ability to contribute to their well-being than export market access, which they don't see as promising any sure payoff," he said.
President Bush set a six-year goal for making ethanol practical and competitive as an alternative fuel. US crude oil futures settled at $62.91 on Friday and hit a peak of $70.85 a barrel in August.
WTO scepticism
Farmers are sceptical about a new trade pact since the last cycle of WTO talks, known as the Uruguay Round, delivered little of what had been promised in cutting farm subsidies.
Timothy Reif, chief trade counsel on the House Ways and Means trade subcommittee, told a conference on Friday that even a successful Doha deal would not fix unfair trade practices such as the long-running problem of persuading Japan to restart imports of US beef following concerns about mad cow disease.
The livestock industry is a big client for corn growers.
"Trade is very important to the livestock industry, so we get excited about seeing our biggest customer have more marketplace to sell to. But it's easy to have some discouragement about the Doha round," said Jon Doggett, vice president of public policy at the National Corn Growers Association.
"The round has looked good at times and then you have meetings and things are not so good. There are some growers who look at the ethanol issue as something they can do very well with and see an awful lot of opportunity with," he said.
Biofuel caveats
But there are caveats to the relatively young biofuel industry, of which farmers should be aware, said Thompson.
"I don't think you'd see much expansion of this industry without government subsidies such as mandated use of ethanol in gasoline blends ... and protection against imports of cheaper ethanol that can be made from sugar in Brazil," he said.
In addition, world economic growth over the next half century is likely to lift several hundreds of millions of people out of poverty, meaning increased demand for meat and in turn for corn and soybean animal feed.
"There's going to be plenty of market demand for all the corn and soybean meal that efficient producers in North and South America can produce. I predict that by 2050 there will be real questions raised about the morality of burning food for fuel," Thompson said.
...And back to trade
Most growers interested in alternative fuels also realize that boosting trade is in their interest, said Gary Blumenthal, president of agricultural policy firm World Perspectives.
"Producers welcome demand from anywhere. They welcome ethanol because it means they no longer have all their eggs in the export basket but no smart producer would put all their eggs in the ethanol basket," he said.
Besides which, the booming ethanol market is itself fast becoming the next big trade topic.
Sen. Saxby Chambliss, head of the Senate agriculture committee, recently said opening the US ethanol market to competition from Brazilian imports could be good for industry.
Brazil's ambassador to the WTO, Clodoaldo Hugueney, told a discussion panel this week: "The US and Brazil should be trying to develop a greater strategic partnership in developing a world market for biofuel."
Source: Checkbiotech.org
0 Comments:
Post a Comment
Links to this post:
Create a Link
<< Home