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European Union Directive Is Driving Biofuel Production
EU Renewable Energy Directive targets set to benefit the agriculture industry By Jonathan Turney | Published Jul 01, 2013 Bioethanol as a renewable transport fuel (RTF) is set to become one of the most important markets for British agriculture. The UK currently imports the majority of its high-protein animal feed requirements, making British farmers particularly susceptible to volatile overseas commodity markets. The bio-refining of low-grade UK wheat to bioethanol provides a solution to this, as it produces a high-protein animal feed co-product (dry distillers grains with solubles), thereby reducing the need to import protein substitutes (such as soy) from more ecologically sensitive parts of the world. At the same time, the European Union Renewable Energy Directive (RED), which aims to reduce greenhouse gas emissions, creates a huge market for RTFs. Under the EU mandate, 10 per cent of the total road transport fuel pool must come from blended RTFs by 2020. RTFs such as bioethanol are currently one of only a few commercially viable and technologically proven alternatives to fossil fuels that can realistically address unprecedented climate change. Other fossil fuel alternatives remain a long way from availability and are unlikely to achieve the same market penetration. Electric vehicles, for instance, are only expected to replace approximately 0.1 per cent of road transport fuel by 2020. Likewise, longer-term projections of the effectiveness of hydrogen fuel cells are still unproven, so are unlikely to materially contribute to the emissions-reduction strategy. The UK is well placed to be a global leader in RTF production, with a domestic surplus of low-grade feed wheat – currently exported – required in the bio-refining process and a large domestic market for petroleum. In addition, the UK has a highly skilled workforce, relative to other parts of the world. The northeast of England is particularly well suited for RTF production as it has close proximity to arable land, existing petrochemical infrastructure and a deep-water port on the Humber, all of which provide optimum conditions for the domestic production of RTFs. The UK farming and agriculture industry stands to benefit greatly from this. The high-protein animal feed, which is produced as part of the bio-refining process, can be used directly for feeding UK livestock and negates the need to import other high-protein animal feeds. Concerns have been raised in the past about the benefits and disadvantages of using food in RTF production, the so-called ‘food versus fuel’ argument. This is not relevant here since the bio-refining process actually enhances the food chain rather than erodes it, with the efficient extraction and use of the raw commodity’s constituent components being starch and protein. Moreover, a government review in 2008 also found that RTF policies had less of an impact on food prices for cereal-based RTFs than other feedstocks. Cereal crop prices ranged from a drop in price of 2.6 per cent in the EU to an increase of just 2.6 per cent in southern Africa and Brazil. On the other hand, oilseeds, the feedstock for most biodiesels, were the worst affected, with projected price increases of 50-72 per cent. Away from agriculture, the UK as a whole also stands to gain economically from increased production of RTFs. To meet the RED mandates, the UK will need to install further RTF capacity by 2020. To achieve this, the RTF industry is creating new jobs and reinvigorating manufacturing opportunities in economically deprived parts of the country, and is receiving considerable political support to ensure the UK is not perceived as being the laggard in Europe. Investment in RTFs, therefore, can provide a win-win situation for the agricultural industry, investors and the UK manufacturing industry alike, as the UK continues to work hard to fulfil its Renewable Transport Fuel obligations by 2020. Jonathan Turney is associate director at Future Capital Partners Continue reading
OECD Sees West Africa Agriculture Investment Boost on Population
By Isis Almeida – Jun 27, 2013 Agricultural investment in West Africa , the world’s largest cocoa-producing region, will grow “very significantly” by 2050 as the population expands and people move from rural areas to cities, according to the Organization for Economic Cooperation and Development. West African urbanization is increasing at the fastest rate in the world, Karim Dahou, an executive manager at the OECD’s directorate for financial and enterprise affairs, said today in an interview at a conference in London. Population in West Africa has doubled every 20 years since 1960 and in cities the number of people has tripled, he said. “In West Africa, the natural resources are conducive to huge agricultural output, there’s water, there are a lot of hydro-resources,” Dahou said at the Agriculture Investment Summit. “Our agricultural outlook by 2050 is very optimistic in terms of the growth of the sector globally, and including in Africa.” Investment in West African agriculture will expand as the world tries to meet growing local and global demand, he said. The amount of capital invested per farmer in Africa is “very low,” one sixth of that in Asia and one fourth of that in Latin America , according to Dahou. That’s the reason why yields for many crops in the region are stagnant, he said. Ghana and Nigeria are leading investments in agriculture in the region, he said. Nigeria, which spends $10 billion a year importing wheat, sugar, rice and fish, plans to boost domestic food production by 20 million metric tons by 2015, according to Akinwunmi Adesina, the country’s agriculture minister. Cash crops such as cocoa and coffee in West Africa won’t be under threat as the region tackles food security and may even facilitate access to food as they bring in revenue, Dahou said. There’s enough land available to expand and improve yields for both food and cash crops, he said. “The issue is not really space, it’s intensification,” Dahou said. “That’s what African agriculture, especially West African agriculture, needs.” To contact the reporter on this story: Isis Almeida in London at ialmeida3@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net Continue reading
Governor Corbett’s Budget Makes Solid Investment in Agriculture
HARRISBURG, Pa., July 1, 2013 /PRNewswire via COMTEX/ — Governor Tom Corbett yesterday signed the 2013-14 state budget that increases support for the Department of Agriculture and the economy-driving agriculture industry. “Agriculture is the state’s leading economic driver with more than $67 billion in economic impact,” Corbett said. “Farming in Pennsylvania is a business, a family business that provides jobs for Pennsylvanians and keeps dollars in local communities.” One in seven Pennsylvania jobs are related to agriculture and 97 percent of the more than 62,000 farms are family owned. “Agriculture is a leader in the state and nation,” Agriculture Secretary George Greig said. “Governor Corbett’s budget keeps our farmers farming, with funding for our top veterinary school, agriculture research, protection of our farmland, providing food for Pennsylvanians in need and our county fairs.” The Department of Agriculture budget: — Increases funding for the Veterinary School at the University of Pennsylvania at $28 million for veterinary activities, $261,000 for the school’s Center for Infectious Diseases, and $46 million for agricultural research and extension at Penn State; — Increases support for Pennsylvania’s nation-leading farmland preservation program with $35 million to preserve productive farmland against development; — Ensures critical funding for the State Food Purchase Program at more than $17 million to help fight hunger in Pennsylvanians; — Increases funding for the commonwealth branding program for agriculture commodities with $550,000 for PA Preferred™; — Increases funding for the Farm Show Complex and Expo Center with $4 million; and — Increases funding for county fairs, at $3 million, that attract more than six million visitors each year and showcase the best of local agriculture. “This budget is an investment in agriculture, which is the cornerstone of Pennsylvania’s economy and future,” Corbett said. Media contact: Samantha Elliott Krepps, Agriculture, 717-787-5085 SOURCE Pennsylvania Department of Agriculture Continue reading
