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A year ago, this lush coastal field near Rome was filled with orderly
rows of delicate durum wheat, used to make high quality Italian pasta. Today it
overflows with rapeseed, a tall, gnarled weedlike plant bursting with coarse
yellow flowers that has become a new manna for European farmers: rapeseed can be
turned into biofuel. Lured by generous new subsidies to develop
alternative energy sources—and a measure of concern about the future of the
planet—European farmers are plunging into growing crops that can be turned into
fuels meant to produce fewer emissions than gas or oil when burned. They are
chasing after their counterparts in the Americas who have been cropping for
biofuel for more than five years. "This is a much-needed boost
to our economy, our farms," said Marcello Pini, a farmer, standing in front of
the sea of waving yellow flowers he planted for the first time this year. "Of
course we hope it helps the environment, too." In March, the
European Commission, disappointed by the slow growth of the biofuels industry in
Europe, approved a directive that included a "binding target" requiring member
states to use 10 percent biofuel for transport by 2020—the most ambitious and
specific goal in the world. Most EU states are currently far
from achieving the target, and are introducing new incentives and subsidies to
boost production. As a result, bioenergy crops have now
replaced food as the most profitable crop in a number European countries. In
this part of Italy, for example, the government guarantees the purchase of
biofuel crops at €22 per 100 kilograms, or $13.42 per 100
pounds—nearly twice the €11-to-€12 rate per 100
kilograms of wheat on the open market last year. Better still, European farmers
are allowed to plant biofuel crops on "set-aside" fields, land that EU
agriculture policy would otherwise require them to leave fallow to prevent an
oversupply of food. But an expert panel convened by the UN Food
and Agriculture Organization this month pointed out that the biofuels boom
produces both benefits as well as tradeoff and risks—including higher and wildly
fluctuating global food prices. In some markets grain prices have nearly doubled
because farmers are planting for biofuels. "At a time when
agricultural prices are low, in comes biofuel and improves the lot of farmers
and injects life into rural areas," said Gustavo Best, an expert at the United
Nations Food and Agriculture Organization in Rome. "But as the scale grows and
the demand for biofuel crops seems to be infinite, we're seeing some negative
effects and we need to hold up a yellow light." Josette
Sheeran, the new head of the UN World Food program, which fed nearly 90 million
people in 2006, said that biofuels created new dilemmas for her agency. "An
increase in grain prices impacts us because we are a major procurer of grain for
food. So biofuels are both a challenge and an opportunity." In
Europe, the rapid conversion of fields that once grew wheat or barley to biofuel
oils like rapeseed is already leading to shortages of ingredients for making
pasta and brewing beer, suppliers say. That could translate into higher prices
in supermarkets. "New and increasing demand for bioenergy
production has put high pressure on the whole world grain market," said Claudia
Conti, a spokeswoman for Barilla, one of the largest Italian pasta makers. "Not
only German beer producers, but Mexican tortilla makers have see the cost of
their main raw material growing quickly to historical highs."
For some experts, more worrisome is the potential impact to low-income consumers
from the displacement of food crops by bioenergy plantings. In the developing
world, the shift from growing food to growing more lucrative biofuel crops
destined for richer countries could create serious hunger and damage the
environment in places where wild land is converted to biofuel cultivation, the
FAO expert panel concluded. But officials at the European
Commission say they are pursuing a measured course that will prevent the worst
price and supply problems that have plagued American markets.
"We see in the United States farmers going crazy growing corn for biofuels, but
also producing shortages of food and feed," said Michael Mann, a commission
spokesman. "So we see biofuel as a good opportunity—but it shouldn't be the
be-all and end-all for agriculture." In a recent speech,
Mariann Fischer Boel, the EU agriculture and rural development commissioner,
said that the 10 percent EU target was "not a shot in the dark," but rather
carefully chosen to encourage a level of biofuel industry growth that would not
produce undue hardship for the Continent's poor. Over the next 14 years, she
calculated, it would push up raw material prices for cereal by 3 percent to 6
percent by 2020, while prices for oilseed may rise between 5 percent and 18
percent. But food prices on the shelves would barely change, she said.