'Hundreds of millions' of farmers to benefit as China aims to triple ethanol output by 2010
China earlier announced an ambitious biofuels and bioenergy policy to be included in its forthcoming Five Year Plans. The rising superpower now says it will more than treble its fuel ethanol output by 2010 to reduce the country's dependence on imported oil and to "boost the income of hundreds of millions of farmers", a government official said on Thursday. This is yet another indication that biofuels production in the (rapidly) developing world is becoming the main job and income generator for the rural masses in the South (earlier Brazil said its biofuel targets will create 3.6 million jobs, Indonesia projects 2.5 million jobs, and Nigeria thinks green energy might generate 3 million jobs - all before 2010).
China has the advantage of having a tradition of strong top-down planning resulting in the classic Five Year Plans first introduced by Chairman Mao. These dirigist plans can move the entire country more or less into a single given direction, en masse. In the case of implementing biofuels targets or fighting climate change, this tradition certainly offers advantages over free market mechanisms. Moreover, for a country like China, where rural-urban migration and the growing inequality between urban and rural citizens is becoming a major problem, resulting in some 87,000 (violent) social conflicts per year [*.pdf], reviving the agricultural sector is absolutely crucial. China itself has always recognized this: the future of the country's social fabric depends on helping the hundreds of millions of farmers that do not share in the economic benefits of the country's rapid growth. The biofuels strategy is a way to contribute to this goal.
Liu Qun from the National Development and Reform Commission (NDRC), the country's top planning body preparing the Eleventh Five Year Plan of the People's Republic, told a biofuel conference that annual fuel ethanol output should top 3 million tonnes by 2010, up from 1 million tonnes last year. 3 million tonnes per year of ethanol roughly equals an output of 40,000 barrels of oil equivalent per day. Some industry officials have said China was already producing about 5 million tonnes of ethanol, including fuel ethanol, this year, as record-high crude oil prices and a US deficit in the biofuel have triggered an investment boom in the sector. Unofficially, China may thus be producing 8 million tonnes of ethanol by 2010 (roughly 120,000 barrels of oil equivalent).
Officially, fuel ethanol should make up more than 5 percent of the country's gasoline consumption, compared with less then 2 percent now, the division chief from NDRC said at the conference organised by BBI International from the United States. Liu said the government would continue providing financial support for the industry, such as tax breaks or subsidies.
China now has four government-sponsored fuel ethanol plants with total annual capacity of 1.02 million tonnes. Beijing provides subsidies of about 1,300 yuan (€115 / US$163) per tonne of ethanol to the four plants this year. They are also exempted from a 5.0 percent consumption tax and 17 percent value-added tax.
The plants use corn or wheat as feedstocks for fuel ethanol, blended into gasoline in nine provinces, such as Jilin, Henan, Anhui and Heilongjiang. Liu said Beijing would expand the ethanol-blending areas to the central and western parts of the country.
Liu said in future Beijing would encourage the use of non-food raw materials, such as cassava, sweet sorghum and agriculture residues, as feedstocks:
ethanol :: biodiesel :: biofuels :: sustainability :: cassava :: sorghum :: social justice :: jobs :: rural development :: China ::
"The government will continue to support the industry. But it should not take away the land from grains production," he said.
"We will only support converting part of our grains into ethanol as long as it does not threaten the grain supply."
Liu said the southern region of Guangxi, the country's largest cassava grower, would build fuel ethanol facilities for 1.0 million tonnes in the coming five years.
NDRC will permit state-owned grain trader COFCO to build a 200,000 tonnes per year (tpy) cassava ethanol plant in the region, Liu said.
COFCO's Vice President Yu Xubo told the conference it was seeking opportunities to set up non-grain ethanol plants in five provinces, including the one in Guangxi.
"The biofuel industry will boost the sales of farm products and increase incomes of farmers, which make up 80 percent of the country's population," Yu said.
Tianguan Group, one of the four government-sponsored fuel ethanol producers, said it would start building one of its five new ethanol plants this year. The 100,000-tpy plant in central Hubei province will use early rice as feedstock.
Article continues
China has the advantage of having a tradition of strong top-down planning resulting in the classic Five Year Plans first introduced by Chairman Mao. These dirigist plans can move the entire country more or less into a single given direction, en masse. In the case of implementing biofuels targets or fighting climate change, this tradition certainly offers advantages over free market mechanisms. Moreover, for a country like China, where rural-urban migration and the growing inequality between urban and rural citizens is becoming a major problem, resulting in some 87,000 (violent) social conflicts per year [*.pdf], reviving the agricultural sector is absolutely crucial. China itself has always recognized this: the future of the country's social fabric depends on helping the hundreds of millions of farmers that do not share in the economic benefits of the country's rapid growth. The biofuels strategy is a way to contribute to this goal.
Liu Qun from the National Development and Reform Commission (NDRC), the country's top planning body preparing the Eleventh Five Year Plan of the People's Republic, told a biofuel conference that annual fuel ethanol output should top 3 million tonnes by 2010, up from 1 million tonnes last year. 3 million tonnes per year of ethanol roughly equals an output of 40,000 barrels of oil equivalent per day. Some industry officials have said China was already producing about 5 million tonnes of ethanol, including fuel ethanol, this year, as record-high crude oil prices and a US deficit in the biofuel have triggered an investment boom in the sector. Unofficially, China may thus be producing 8 million tonnes of ethanol by 2010 (roughly 120,000 barrels of oil equivalent).
Officially, fuel ethanol should make up more than 5 percent of the country's gasoline consumption, compared with less then 2 percent now, the division chief from NDRC said at the conference organised by BBI International from the United States. Liu said the government would continue providing financial support for the industry, such as tax breaks or subsidies.
China now has four government-sponsored fuel ethanol plants with total annual capacity of 1.02 million tonnes. Beijing provides subsidies of about 1,300 yuan (€115 / US$163) per tonne of ethanol to the four plants this year. They are also exempted from a 5.0 percent consumption tax and 17 percent value-added tax.
The plants use corn or wheat as feedstocks for fuel ethanol, blended into gasoline in nine provinces, such as Jilin, Henan, Anhui and Heilongjiang. Liu said Beijing would expand the ethanol-blending areas to the central and western parts of the country.
Liu said in future Beijing would encourage the use of non-food raw materials, such as cassava, sweet sorghum and agriculture residues, as feedstocks:
ethanol :: biodiesel :: biofuels :: sustainability :: cassava :: sorghum :: social justice :: jobs :: rural development :: China ::
"The government will continue to support the industry. But it should not take away the land from grains production," he said.
"We will only support converting part of our grains into ethanol as long as it does not threaten the grain supply."
Liu said the southern region of Guangxi, the country's largest cassava grower, would build fuel ethanol facilities for 1.0 million tonnes in the coming five years.
NDRC will permit state-owned grain trader COFCO to build a 200,000 tonnes per year (tpy) cassava ethanol plant in the region, Liu said.
COFCO's Vice President Yu Xubo told the conference it was seeking opportunities to set up non-grain ethanol plants in five provinces, including the one in Guangxi.
"The biofuel industry will boost the sales of farm products and increase incomes of farmers, which make up 80 percent of the country's population," Yu said.
Tianguan Group, one of the four government-sponsored fuel ethanol producers, said it would start building one of its five new ethanol plants this year. The 100,000-tpy plant in central Hubei province will use early rice as feedstock.
Article continues
Friday, September 15, 2006
Land prices in Africa
But a word of caution first: even though land will become a very valuable resource in the future global bio-economy, the biofuels opportunity can not result in 'land grabs' for a series of very clear reasons:
- virtually all governments in the global South have designed strong policies aimed at land reform. This is a major social issue in the developing world with a lot of political clout, and the trend is towards more social justice and towards land redistribution
- rural communities in the developing world are increasingly becoming aware of the value of their land and of that of publicly owned hectarages; their dealings with outside forces (both the state and the private sector) are now highly organised; both the media and civil society are very active when it comes to the land question
- investing in land means investing in people; investments in land in Africa are absolutely crucial in order to boost agricultural production, and governments in the South now generally welcome foreign investments because they bring badly needed expertise and capital; but at the same time the law and civil society is now strong enough to remind the private sector of its obligations towards the communities they are working with
- virtually all governments in the South have clear mechanisms to combat land speculation
- more fundamentally, all social sustainability studies analysing large-scale agricultural projects (or any other activity in the 'extractive industries') clearly indicate that only mutually beneficial relations between small landholders/local communities and the private sector withstand the test of time; quick land grabs always result in failure; the creation of such durable and equitable relations is absolutely crucial to the very survival of any company willing to engage in the agricultural sector in the South; the risk of social conflicts arising over land issues is simply too great; companies taking themselves seriously are now well aware of this fact and have experienced first hand that 'social sustainability' is not an empty concept
- the cultural complexities of the local traditions and customary laws surrounding land ownership, land titles, land inheritance and land as a social good, must firmly be understood first by anyone attempting to invest in Africa or anywhere else in the South; land is a 'social construct' first, and only a material and private good second. Those who do not understand this, will experience failure. It would therefor not be unwise to hire a social anthropologist or two to study these deeply rooted local cultural and social constructions and their meanings before any investment is actually made; again the cost of understanding these cultural values is negligeable compared to those potentially resulting from social conflict
Below we present a series of data we compiled, indicating estimated land prices, the total amount of arable land available, the land base per agricapita (hectares), and the most suitable energy crops for the country as a whole, in order of suitability.It should be stressed that the development of an international index of comparative land costs is something many people demand, but that so far has not been undertaken. Indeed, the literature search undertaken as part of our analysis discovered only one study that has attempted to estimate average land prices in the past. It is on this study - the World Bank Global Approach to Environmental Analyses (GAEA) - that we based the land price estimates. The GAEA study attempts to build on earlier World Bank work that suggested that national land prices would be roughly equal to a multiple of per capita income. Estimates of land value calculated in this way were then adjusted to incorporate broader factors, such as proportions of pasture, cropland, forestland and arid land in the total land area, to arrive at indicative national land prices. In short, the land price data are very rough and only useful for broad comparative purposes. The tables do include data for all Sub-Saharan African countries though:
biomass :: bioenergy :: biofuels :: energy :: social sustainability :: land :: land reform :: plantations :: Africa
It should be noted that the values presented in the tables are likely to bear little relationship to current commercial market prices for land in any particular year. Rather, the values are presented mainly for comparative purposes. Countries shown to have very high land values in GAEA would also be expected to have very high commercial land values. Similarly, countries estimated to have mid-range and low land values in GAEA would also be expected to have lower commercial land values.
The prices below can be compared with those in Northern Europe and the United States, where, on average, one hectare of land approximately costs €22,000 / US$30,000.
Screencaps:
The sources for the data we used to compile our database:
On land availability
- The FAO's TerraStat database.
On land prices
- World Bank: Global approach to environmental analyses (GAEA), World Bank, 1999
- The GAEA data on land prices can also be found here: FAO Forestry Policy and Planning Division, Rome: Christopher Brown, Forestry Officer (Plantations), The global outlook for future wood supply from forest plantations, Chapter III: Rates of return and profitability - Working Paper No: GFPOS/WP/03, February 2000
On energy crops
-The FAO Land and Water Development Division's database of Land Suitability Maps for Rainfed Cropping.
-The Global Agro-Ecological Zones databases on land resources.
-The proprietary interactive and global Biofuels Atlas, under development by a consultancy firm one of our members has access to.
Article continues
posted by Biopact team at 3:35 PM 0 comments links to this post