Policy Innovations Digital Magazine (2006-2016): Commentary: Agrofuels Favor Business over Farmers

Agrofuel development has arrived on the global stage. Just this year, the number of declarations, dollars, and development plans devoted to agrofuels is unparalleled. An idea that languished for decades has become the darling of politicians, business, financiers, and the media.

Agrofuels, also known as biofuels, have been touted as the solution to the most pressing problems facing U.S. society and the planet. Promoters claim they reduce greenhouse gas emissions, stave off the end of industrial growth based on fossil fuels, are sustainable and renewable, increase energy security, and help farmers.

But a closer look reveals that in many ways the rosy future envisioned by agrofuel promoters looks like the worst of the past.

Scientists and ecologists still debate the pros and cons of agrofuels. Even the terminology is controversial. "Biofuels" would seem to imply fuels that originate in natural biological processes, and are used to supply normal social needs. Yet the massive use of land for monocropping genetically modified biomass is neither natural nor Earth-friendly.

The term agrofuels also speaks to how biofuels are produced. The prefix "agro" makes explicit the fact that they compete for land and resources with other agricultural products, especially food. As such, the surge in agrofuel production presents a threat to the global food supply, to hunger alleviation, and to the aspirations of nations to feed and employ their populations—their ability to attain food sovereignty. Small farmers and farm organizations around the world have come out against converting land to agrofuel crop production.

Studies contradict one another on whether net energy generation is positive or negative, whether greenhouse gas emissions and pollution increase or decrease, and how costs and energy efficiency sort out. Yet, the political consensus has been swift. In a few years, an alliance of the world's most politically powerful forces has emerged to promote biofuels.

In his 2007 State of the Union Address, President George W. Bush set the goal of substituting 20 percent of gasoline with agrofuels in ten years. Business is equally enthusiastic. Four highly globalized sectors come together in advancing agrofuel research, investment, and production: agribusiness, oil, automobiles, and biotech.

Since the beginning of agrofuel production, agribusiness companies including ADM, Cargill, Bunge, and Dreyfus have jumped on the bandwagon. With government subsidies flowing liberally and huge profits to be made across the globe, agrofuels are more attractive now than ever. Cargill owns an increasing number of ethanol refineries and contracts or owns sugarcane plantations in Brazil.

Oil companies look to agrofuels to prolong their life and diversify their business. Likewise the automotive industry can maintain or increase sales as people are obliged to buy new cars adapted to ethanol use. Genetically modified (GM) varieties of corn and sugarcane adapted to ethanol production are in widespread use. In fact, since 90 percent of U.S. ethanol comes from corn and most of the U.S. corn crop is genetically modified, ethanol has earned itself the nickname of "Monsanto moonshine"— Monsanto Corporation being the leader in GM corn as well as other genetically modified crops.

With promoters like these, one fact becomes obvious: The agrofuel revolution is anything but revolutionary. Transition to agrofuel use exemplifies reforming a system in order to perpetuate it.

Changes in land use under the agrofuel strategy will transform landscapes and lives throughout the Western hemisphere. The first casualty of the reorganization of agricultural production is the small farmer. Cargill, one of the largest owners of ethanol production in Brazil, is expanding its operations in the South while continuing to protect its corn interests in the North through U.S. government import tariffs on ethanol. As monocropping by agribusiness for biofuels requires huge tracts of land, small food farmers who have long resisted international market control of land and resources are becoming an endangered species in areas affected by the agrofuels boom.

On closer inspection, the green in agrofuel development looks more like dollars than plants. When ethanol becomes big business, farmers themselves are pushed even further to the fringes. In 2003, about half of ethanol refineries in the United States were farmer-owned. Today, 80 percent are held by absentee owners, and new construction will further reduce the share held by farmers. Investor demands will dictate a preference for the construction of low-cost ethanol refineries over more environment-friendly alternatives.

Although farmers throughout the hemisphere have benefited from higher corn prices, George Naylor of the National Family Farm Coalition warns that the short-term gains will be paid for dearly in the near future, and that family farmers will be the ones who pay. At a recent international conference on agrofuels in Mexico City, Naylor predicted that higher prices will not hold as farmers cultivate more acreage, and that farmers who converted to agrofuel crops could end up losing their farms. In Brazil, the price for sugarcane has already begun a downward trend.

The question is whether agrofuel production should be opposed outright or pushed toward socially and environmentally sustainable options. The problem is in the pushing. Given the tremendous power of the interests behind agrofuels, the application of the model will invariably favor earnings over environment, and investment returns over human rights. In this context, the chances that local communities and small farmers will benefit from the boom evaporate faster than alcohol.

In the absence of scientific consensus and legislation to protect farmers, workers, consumers, the environment, and the food supply, the full-steam-ahead plans for agrofuel development cannot be justified.

Laura Carlsen is the director of the Americas Policy Program in Mexico City.