Policy recommendations

  • The European Union must ensure that its Energy Policy will not harm the food security of the urban and rural poor in developing countries, whose daily survival is threatened by substantially higher food prices. It should draw up a strategy to ensure the urban and rural poor are compensated for higher food prices before installing mandatory levels of biofuels;
  • The European Union should abolish its domestic subsidies and import tariffs for biofuels, in order to allow developing countries to profit from the trade opportunities biofuels offer;
  • The European Union should draw up comprehensive sustainability criteria for biofuels, including more ambitious standards for greenhouse-gas reduction a slight decrease of emissions as compared to fossil fuels is simply not enough and the protection of biodiversity and carbon-rich ecosystems;
  • The European Commission should include social criteria in its review of the Biofuels Directive to guarantee that the rural populations who live off marginal lands and forests are not hurt by expanding agricultural production;
  • The European Union should stimulate local processing and the use of sustainable biofuels in developing countries. Small-scale farmer cooperatives should be stimulated to prevent the benefits from biofuel production from only falling into the hands of large-plantation owners.

Case: Biofuels

22-08-2008 Written question MEP Muscardini: Prices of agricultural products and biofuels

22 August 2008

In a written question to the Commission, MEP Cristina Muscardini (UEN) asks the Commission how and why the production of biofuels is contributing to the rise of prices of agricultural products. She also inquires how the EU could tackle this problem and could help to stabilize the prices of agricultural products such as rice, maize and soya.

In her question she refers to a World Bank report, which states that farm prices are not expected to decrease until at least 2015, which would in turn lead to an unbearable situation for large sections of the world population, as they will not be able to pay more for products of primary need. Besides, Mrs. Muscardini asks the Commission whether the crisis in food prices could be integrated into the fight against poverty, which is one of the Millennium Development goals (MDGs).

The production of biofuels has increased tremendously due to a combination of high oil prices, energy security concerns and the fear of global climate change. More and more crops such as sugar cane, maize and wheat are converted into ethanol, and rapeseed and palm oil into biodiesel. In addition, the production of biofuels in the EU is highly subsidized, which of course also contributes to a further increase in production.  This increase in biofuels production has led to higher demands for these agricultural products. As a result, prices have increased as well, and thus poverty is increasing, as the population living below the poverty line cannot buy the same amount of food for the same price.

Fair Politics EU recommends the European Union to ensure that its Energy policy does not harm the food security of the urban and rural population in developing countries. Besides, it urges the  Commission to include, amongst others, strict and well-defined social criteria in its Biofuels directive, this in order to guarantee that the rural populations are not hurt by the expanding agricultural production.

Fair Politics EU monitors the efforts of the MEPs to address policy coherence regarding development in their daily work. The question addressed to the Commission by MEP Cristina Muscardini deals with the incoherence between the biofuels directive as part of the EU’s energy policy and the fight against poverty as part of the EU’s development policy and the MDGs. For this reason MEP Muscardini is granted a coherence star.

Full question of Mrs. Cristina Muscardini can be read below

WRITTEN QUESTION  E-4566/08

by Cristina Muscardini

to the Commission

Subject: Prices of agricultural products and biofuels

Date: 7 August 2008

The rise in rice, maize and soya prices are now making these products unbearably expensive for large sections of the population. As far as we can remember, these are the highest percentage increases that have ever taken place in such a short period of time. The trend seems to be unstoppable and a World Bank report has predicted that farm prices will not fall until at least 2015. Some of the figures relating to the food crisis suggest that these increases are due to the exponential rise in biofuel production (ethanol and biodiesel), the increase in meat consumption in China (which has doubled one-and-a-half times in the space of one year), rising oil prices and rising food costs in various developing countries.

Given the above, the Commission is asked to answer the following:

1.Why and how is biofuel production contributing to the increase in the international prices of agricultural products?2.How can the EU tackle this problem to help stabilise prices?3.To what extent is speculation responsible for the increase in the prices of raw materials?4.Does it consider that the World Bank's request for USD 500 million to tackle the food emergency can meet the objective?5.In what way can the fight against poverty be integrated into action to eradicate the causes that have led to huge increases in farm prices, which are in turn responsible for rising poverty?

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