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11 May, 2009
About a year ago, the nominal prices of soybeans, corn and wheat on international markets reach historic highs of USD600, USD300 and USD500 per tonne and the cost of food derived from these primary products increased at a staggering pace. At the same time, the barrel of crude oil was breaking historic threshold reaching USD149.-. This significant event took countless analysts to predict a world with crude oil at USD 200 a barrel. The high prices of oilseeds, grains and petroleum, which were the largest in history in real terms, had immediate repercussions on the entire agro-production chain, increasing the costs of production, transport, distribution and consumer prices of food. Not many analysts and recognized international organizations foresee a food crisis and attributed to the production of biofuels such increase in prices and a potential food crisis worldwide. Meanwhile, it was argued that Argentina, one of the world’s major food producer, either by internal policy or barriers to trade, was unable to increase the exportable supply of grains and food that would have otherwise helped to alleviate this “potential food crisis”. The origins and causes of the crisis have left uncovered that the prices of grain and oilseed were mainly influenced by the high prices of oil and its derivatives, due to the productive dependence than those have on these, but at the same time, these commodities and particularly oil (or derivatives) were the reflection of a speculative bubble of unknown dimensions fueled by the abundant global liquidity, excessive transfer of risk in a context of low interest rates, the creation of sophisticated instruments for their coverage, not regulations or inadequate supervision of certain actors in the financial and commodities markets and the belief that economic cycles were a thing of the past. This bubble was in correlation with a cheap dollar, validating the belief that expensive oil and food increasingly scarce had come to stay. Of course, one can not ignore that the Chinese eat more soy, that supply has grown less than the demand in specific cases and that climatic factors have affected agricultural production in different areas of the world. However, it has been clearly shown that biofuels in the ongoing development of its production, were only marginally affected in most cases. The dynamics of prices of primary products and commodities and, more importantly, the cost of oil and their derivatives, together with structural factors of supply and demand, are the drivers of these prices. There has been discussion about the costs and benefits of producing biofuels. Reason indicates that the private and social benefits of such fuel is clearly positive. And its production can be sustainable in an environmental viewpoint, strengthening agricultural value chains, which generate more foreign exchange by exports, which reduce the energy dependency of fossil fuels (Brazil) in its overall energy balance is positive not necessarily diminish the food supply. However, if it is granted that biofuels entails net benefits to society as a whole, what should be the premisses and bases for a policy that favors the development of the sector in Argentina, with clear comparative advantages? A sectoral policy must coordinate very well action between areas of state to avoid overlapping in the allocation of public resources and to recognize these factors are assumed: 1) Biofuels can not replace fossil fuels, but in the margin. 2) The development of the industry can not be subject to the vagaries of oil prices, as the experience of Brazilian long-term shows. 3) The world, the EU in particular, will be importers of biofuels in a few years and Argentina could provide large volumes of biodiesel (Europe to tariff subsidized exports by the U.S.). 4) The internal market must be served and promoted by improving the law 26,093 to to reach a development like Brazil. 5) The investments are capital intensive and require predictability as any investment, from any source. Again, improving the regulatory framework is indispensable. 6) The retentions over the exports of biofuels should have variable aliquots, but now, back to levels prior to 2008 (5% to 20% today). 7) SMEs should have a place in the chain, encouraging them to form partnerships to obtain leading-edge technology and overcome the typical problems of scale. 8-We must invest in the long term by promoting scientific and technical research for the development in the sector, in new technologies like crop improvement to diversify the sources of raw materials. 9) Channels should be created for long-term financing at competitive conditions, as the BNDES in Brazil does. 10) The expansion of agricultural zones should be planned and cultural practices monitored, to be sustainable on technical, economic, environmental and social. Today’s biofuel industry sector is going through a period of turbulence and is not alien to the context of international crisis. Failure to provide the basis for achieving diversification of the energy matrix will make impossible to grow in a rational and sustained long-term rates, while our environment will suffer serious damage. Claudio Molina. Executive Director of the Argentine Association of Biofuels and Hydrogen. Source: ClarÃn Rural / Diario ClarÃn Deje un comentario |
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