Cabinet Should unveil SA’S long- awaited biofuel strategy this month, according to government biofuel task team leader Sandile Tyatya. “We’ve finalised our position, met with the ministers, incorporated their comments and will forward the document to Cabinet shortly,” he said. “I’m putting my head on the block this time.”
Agricultural commodity groups, farmers’ unions, technology suppliers and biofuel entrepreneurs have been frustrated by endless delays in releasing the strategy. Many have pinned their hopes on biofuel to revive SA’s stagnant agricultural economy, creating new opportunities for black farmers and new jobs in marginalised rural areas. Until there is clarity on the levels of state support and incentives the industry will enjoy, investors won’t be inclined to put up the billions needed to build biofuel plants and establish grower estates to secure a feedstock supply.
In 2005 Cabinet approved the creation of a strategy incentivising the establishment of an SA biofuel industry. The task team was expected to release its strategy in May, but fears that biofuel is pushing up food prices caused more delays. The task team’s ministerial meetings were apparently dominated by discussions on food prices. “Food security is a big concern for all ministers,” conceded R eserve Bank governor Tito Mboweni recently questioned the wisdom of using maize, staple food, for producing ethanol when biofuel production had fuelled global food inflation. This led biofuel promoters, including Southern African Biofuels Association chairperson and senior Absa official Andrew Makenete, Grain chairperson Neels Ferreira and Agricultural Business Chamber CEO John Purchase, to brief Mboweni on the benefits of biofuel for rural economies. hey pointed out farmers could increase maize production substantially without affecting food cropland. biofuel industry would increase local demand for maize in an industry plagued by surpluses. greater maize supply pool and stabilised prices would actually increase food security.
Officials denied food security concerns have paralysed the establishment of a biofuel industry. “Government wants to make a considered decision that will create the right investment framework, without leading to food price increases,” said agriculture department land use and soil management director Bonga Msomi. He said food price inflation concerns had prompted government’s policy of only supporting food crop cultivation as biofuel feedstock. “About 40% of households are food insecure. If agricultural land is released for nonfood feedstock it’s very difficult to intervene afterwards. That’s why jatropha is out.” ritics say government is worried about the political fallout of rising food prices and has no coherent policy. “We must stop thinking the only issue is producing food at a price the poor can afford,” said Bothaville-based Biofuels Industry Development MD and former research manager at Grain Fanie Brink. “cause of famine in Africa is political mismanagement.” – Stephan Hofstätter