Hunger Grains: Are EU policies undermining progress on development?

An earlier version of this piece appeared in the October issue of the Government Gazette

Today we fear EU ambassadors will agree a really bad deal on EU biofuel reform. In 2009 EU governments agreed that by 2020 10% of the energy used in transport would have to come from renewable sources. This target will almost exclusively be met by using food-based biofuels and has  prompted a surge in investment, much of it via land grabs: data from ActionAid show that in sub-Saharan Africa six million hectares of land are now under the control of European companies planning to cash in on the policy windfall.

But as evidence piles up, it is becoming increasingly clear that what may have started as a well-intentioned policy to try to make our transport fuelsBIOFUEL CARTOON greener has turned out to be disastrous for global hunger. By 2020, EU biofuel targets could push up the price of vegetable oils by up to 36%, maize by 22%, wheat by 13% and oilseeds by up to 20%. It also turns out that many biofuels are harmful to the environment – leading to deforestation and greenhouse gas release.

There has been some recognition that biofuel policies are having negative impacts and need to be reformed. In October last year, the European Commission proposed amending the EU’s Renewable Energy Directive by introducing a 5% limit for counting food crop-based biofuels towards the 10% target, improving sustainability criteria and promoting the use of advanced biofuels (which don’t harm food production). But since then the biofuel lobby has swung into action, and in the proposal for discussion today, the 5% cap has been watered up to 7%, complete with loopholes such as allowing statistical transfers (biofuel laundering) between states.

The EU decision really matters: for the moment the biofuel market in Europe is driven by mandates not markets – no biofuels can compete with oil without support. The EU should at the very least remove all mandates, subsidies and tax incentives, but it’s created a vested interest intent on preventing that happening. If the ambassadors sign today as expected, EU energy ministers meeting on 12 December will still have the option to make changes rather than rubber stamping the deal.

This is all the more depressing because in recent years, there has been much to celebrate in terms of the role of agriculture in development. An intellectual turning of the tide has recognised that improving small farmer production is often the most effective way to turn growth into poverty reduction, and more research brainpower has been invested in how to ensure that farming lifts people out of poverty (rather than traps them in it). For a useful synthesis of a recent Oxfam-hosted online debate, see here.

That intellectual shift has been mirrored in public policy, with initiatives such as the Comprehensive Africa Agriculture Development Programme (CAADP), and aid from traditional donors rising from $2.3 in 2002 to $5.3bn in 2011 (and that does not include a rising amount of agricultural aid from new donors like China and Brazil).

land grabs logoBiofuels illustrate a real lack of policy coherence with this renewed focus on agriculture, as do land grabs.

Land grabs, more neutrally known as ‘large scale land acquisitions’, are big business. ‘Buy land. They’re not making it any more,’ joked Mark Twain, and around the world, a lot of investors are taking his advice to heart. In the past decade an area of land eight times the size of the UK has been sold off. More than 30 per cent of Liberia’s land has been handed out.

That might be a good thing if the investment went to small farmers, and boosted food production. Oxfam estimates this land could feed a billion people, equivalent to the number of people who go to bed hungry each night. But that is not happening. From around the world come stories of small farmers being expelled, often at dead of night, to make way for foreign investors in what are often decidedly dodgy deals: land grabs and bad governance go hand in hand.

Instead of food, land is either left idle as a speculative access (a particularly criminal waste), or, in two thirds of cases, turned over to export crops.

The growing evidence and some effective campaigning have overcome initial denials of the problem. In April, World Bank president Dr Jim Yong Kim acknowledged that ‘The World Bank Group shares concerns about the risks associated with large-scale land acquisitions’. In June, the G8 followed suit with the Lough Erne declaration, saying ‘land transactions should be transparent, respecting the property rights of local communities”.

Such good intentions face significant obstacles – a new era of high food prices has pushed up land values. That means big returns for speculators, and money talks, in politics as well as in economics. But so do public protest, champions inside the corridors of power and clear research evidence of the negative impacts of the land grab tsunami. With so much at stake, the struggle for land is likely to be a core element in development for the foreseeable future.

As for the biofuels decision, Oxfam’s campaigners and lobbyists are hard at work to prevent a bad agreement on 12 December – I’ll keep you posted.

Update: my spies tell me the EU meeting didn’t reach a decision and booted the can down the road to the 12 December meeting. I know, hard to credit, isn’t it?

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3 Responses to “Hunger Grains: Are EU policies undermining progress on development?”
  1. Thanks for an interesting blogpost! This is one of the reasons why strengthening land rights should be put on top of the agenda, isn’t it Duncan?

    As you mention, sustainability criteria for biofuels, but also the UN/ FAO Guidelines on Land Tenure:

    “3 Legal recognition and allocation of tenure rights and duties:
    This part addresses the governance of tenure with regard to the legal recognition of tenure rights of indigenous peoples and other communities with customary tenure systems, as well as of informal tenure rights; and the initial allocation of tenure rights to land, fisheries and forests that are owned or controlled by the public sector. (…)
    4 Transfers and other changes to tenure rights and duties:
    This part addresses the governance of tenure when existing rights and associated duties are transferred or reallocated through markets, transactions in tenure rights as a result of investments, land consolidation and other readjustment approaches, restitution, redistributive reforms or expropriation.”

    Strengthening organisations working for national and local implementation and enforcement? And here is a suggestion from Olivier De Schutter:

    “Export credit agencies, for example, should make their support conditional upon full compliance with the guidelines, and in the future, the rights of investors under investment treaties should be made conditional upon the investors acting in accordance with the guidelines.”

    It’s also important to remember the potential of small scale farming in developing countries. According to the UN/ FAO Statistical Yearbook 2013:

    “From the perspective of aggregate agriculture, the lack of access to enough food faced by part of the world’s population creates a gap with the potential food demand that would materialize if access was adequate and there was effective market demand. This gap is likely to remain a feature of global food and agriculture for the foreseeable future, but the more it is reduced, the greater the incentive for agriculture to respond by making use of untapped production potentials. This is the case of certain developing areas where resources such as land and water are available.”

    I also think this short text from Rob Bailey, Oxfam, 2010 is worth reading again:

    “Because whether Oxfam was drawing attention to the corrosive impact of dumping on food producers in 2005, or the calamitous effects of spiralling food prices on food consumers in 2008, its policy prescriptions remained the same:
    – increase investment in developing country agriculture;
    – dismantle trade distorting subsidies in the North;
    – increase social protection to protect poor food consumers.”

  2. Hi Duncan,

    I enjoyed your post and agree with most of what you’re saying, but I think the ‘good intentions’ argument is a bit of a let-off to be honest.

    If policy makers didn’t want corporate interests to dominate this agenda at the expense of social and environmental concerns they shouldn’t have funded industry representatives to develop the policies and provide the evidence.

    I wrote a post on this issue my blog a few days ago. Here’s the link for anyone that’s interested:

  3. Boadi

    It IS very ironical and calous of EU and policies to hipocrytically acquire millions of hactares of sub sahara African lands;in for Biofuel production, denying locals of lands meant for feeding themselves; Biofuel does not feed the poeple. EU knows!!
    Same locals EU on one hand, claims, are Hungry. Sub sahara countries leaders should also realise this cunning tactics and seriously protect lands from EU polices directed to this inhuman attitude towards Africa. I advice EU desist from genocidal acts around the globe. Africultural lands are meant food not food used for Biofuel. We stand behind Oxfam against colonial Power greed and genocide.