SOUTH AFRICA: Biofuel making staple food more expensive

The rush to produce biofuels, driven by the threat of global warming and higher oil prices, is exerting price pressure on staple foods in South Africa, according to a report by the Regional Hunger and Vulnerability Programme (RHVP), a nongovernmental organisation that highlights food security concerns.

The report, ‘Biofuel production and the threat to South Africa’s food security’, said the development of alternatives to fossil fuels, of which South Africa is set to become one of the continent’s leaders, will result “in a highly unequal contest between the poor having to compete for the basics on which they live, and the rich who want to burn it to run their cars.”
South Africa was the first Southern African Development Community member to respond to the organisation’s call to make the region more self reliant in energy production, and Cabinet released a draft strategy last year proposing the blending of biofuel with their fossil fuel equivalents and the integration of the production of the alternative fuels’ into its economic strategy to achieve a six percent growth rate.

The economic plan, the Accelerated Shared Growth Initiative (AsgiSA), intends to merge the formal and informal economies and envisages the biofuels sector would create 55,000 new jobs in the rural areas.

Although the government’s economic strategy does not specifically focus on the crops to be used in biofuel production, it “mentions sugar and maize as two energy crops that could be used to make ethanol,” the RHVP report said, because of recent surplus production of the crops.

A recent report by the National Agricultural Marketing Council said although food price inflation had dropped from 9.45 percent to 7.88 percent in the year ending December 2006, staple food prices, such as maize and sugar, rose 28 percent and 12.6 percent respectively.

This was a result, according to the RHVP report, of the “higher (energy) cost of producing it and because the surpluses which have had the effect of depressing the world price of grain have been removed from the market to be converted to motor fuel.”

The emphasis on biofuels production, with plans afoot to build eight maize-to-ethanol production plants in the central province of the Free State, has coincided with the worst drought in 40 years. Initial predictions by analysts are that the 2007 maize harvest will be seven million tonnes, one million tonnes below South Africa’s required annual consumption needs.

Richard Lee, the World Food Programme regional spokesman, said the combination of increasing demand for food from increasingly wealthy Asian countries and the demand for biofuel, meant the world was “moving into a period without (crop) surplus.”

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