Europe's Overseas Push into Biofuels

Companies are buying tracts of land in Africa, Russia, and Ukraine to produce biofuels in a move that could harm farmers in developing economies

By Leigh Phillips

Massive tracts of land in Africa, Russia and Ukraine are being bought up or leased by richer countries to ensure access to food and for production of biofuels—a development that could result in unrest as locals begin to lose access over their territory.

An area roughly the same size as the amount of farmland in Germany is in play and at a cost of tens of billions of euros.

This phenomenon, a product of the twin food and fuel crises of last year, is threatening local communities whose traditional use of such lands is being undermined by the food and energy security needs of others.

This all comes from a warning issued on Monday (11 May) by the US-based International Food Policy Research Institute (IFPRI), an agricultural research centre funded by an alliance of 64 governments around the world.

A year after the global food crisis that saw food riots and protests spread throughout the developing world—and even to some rich countries—a number of nations have learnt their lesson.

These countries—largely emerging nations such as China, India and the Gulf states—feel they must ensure food security for their people, even at the cost of the food security of other countries.

At the same time, exacerbating the problem is the scramble by mainly European firms for so-called idle or marginal lands on which to grow biofuels.

Stung by the criticism of scientists last year that using farmland for such crops can actually boost carbon emissions and increase food prices, biofuels firms have been scouting about for cheap ‘wasteland'.

"EU policies is certainly contributing to Western biofuels investment," Ruth Meinzen-Dick, one of the report's two authors, told EUobserver,

"When you hear the word ‘wasteland' or ‘unused', it usually does have some use, just not uses that are officially recognised," she added, "whether as a village common or as pastureland, gathering nuts, honey, or for rattan."

The danger is, her report warns, that these companies risk setting off unrest as communities react to the loss of their lands.

Jatropha, palm oil

Details about the deals, the size of land purchased or leased, and the amount invested are often murky and shrouded in secrecy, according to IFPRI, but they highlight a number of agreements.

UK-based Sun Biofuels has secured land in Ethiopia and Mozambique for the cultivation of biofuels produced from jatropha, as well as some 5,500 hectares in Tanzania for the same purpose. Britain's CAMS Group has also purchased 45,000 hectares for jatropha biofuels in Tanzania. The researchers found that another 10,000 hectares have been secured in Nigeria by Trans4mation Agric-tech, also of the UK.

Ethiopia is home to 13,000 hectares secured under a contract farming agreement with Germany's Flora EcoPower for biofuel crop cultivation.

Sweden's Skebab has secured 100,000 hectares in Mozambique for biofuels as well.

Meanwhile in the east, Denmark's Trigon has secured 100,000 hectares from Russia. Sweden's Alpcot Agro has secured 128,000 hectares and Black Earth Farming 331,000 hectares in the country. Landkom, a UK firm, has leased 100,000 hectares in Ukraine.

Food production meanwhile is usually the focus of the land acquisition by emerging economies. The UAE has secured some 378,000 hectares to grow corn, alfalfa, wheat, potatoes and beans, while Saudi Arabia is in the process of gaining access to 500,000 hectares in Tanzania.

Some emerging economies as well are also getting in on the biofuels bonanza. China has secured a whopping 2.8 million hectares in the Democratic Republic of Congo for oil palm and is hoping to access another 2 million hectares in Zambia for jatropha.

All told, the acreage secured through lease or purchase by Asian and European private and public investors amounts to 15-20 million hectares, at a cost of €15-20 billion ($20-30 bn).

By comparison, annual net official development aid by OECD countries amounted to around €90 billion ($120bn) in 2008, €50 billion of which came from the EU.

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