Manual OECD-FAO Agricultural Outlook: 2006-2015

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Interim report projections and reality checks A major point made in the IR was that the growth of demand in developing countries and the world for both cereals excluding their use for biofuels, which was not accounted for in the IR and meat would gradually decelerate. However, as noted, in the debate on the recent food price surges up to mid, it was often stated or rather assumed, given that food consumption data were scarce that the spurt in demand for meat and the associated demand for feed cereals in developing countries, particularly China and India, were a major factor explaining why cereals prices surged.

The first question is therefore whether the predicted deceleration is actually happening. Attention should then turn to examining 5. It would be more correct to state that increases in demand in the developing countries represent the major component of global demand growth, but this is nothing new. This phenomenon was present even when prices were not rising, and often when they were falling. Cereals Table 1. Figure 1. USA maize for ethanol data 3 World excl. Consumption, developing countries: A gradual slowdown in the growth of cereals consumption all uses, not only food in the developing countries was projected — to 1.

This is happening. Therefore, for this criterion, the IR projections seem to be on the right track. Will they continue to be so in the future?

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The IR projections seem to be on the right track for this criterion too. USA maize ethanol 1. USA maize 0. Growth did rebound, to 1. However, much of the rebound was due to the growing use of grains for biofuels overwhelmingly maize for ethanol in the United States of America 6 and the associated price rises. Without these, the rebound was a much more modest 0. That it was lower than projected can be interpreted as reflecting the fact that not all use of maize for ethanol represented additional consumption: part of it was matched by reductions in, mainly, the use of grain for livestock feed following the higher prices, hence the lower than projected growth of consumption for food and feed see section on Biofuels: significance for the long-term outlook.

Again, it is implicit that the growth of biofuels will squeeze out some of the IR-projected consumption for food and, predominantly, feed. Overall, therefore, the IR projections for developed countries excluding biofuels use seem to be on track. Consumption, world totals: The sum of the two country groups — developed and developing — shows that for the world as a whole consumption growth was higher 1. However, it was lower 1. Use of maize for fuel alcohol in the United States of America had reached 91 million tonnes in www. This is the only source with data of cereals use for biofuels extending back to Conclusion: By and large, the trajectories of actual consumption to , for the world as a whole and separately for developing and developed countries excluding the biofuels component , follow the IR projection paths fairly closely Figure 1.

It would therefore be possible to use the existing IR projections at least for these large country aggregates and the world as a whole and add one or more alternative views of future use of cereals for biofuels this topic is addressed later in this chapter, with deeper coverage in Chapters 2 and 3. Production and net imports, developing countries: The interface between production historical data and the projections is not as neat as those for consumption, given fluctuations caused by both weather and policies.

Data for developing countries production are plotted in Figure 1. This was one of the factors that presaged the price spikes in subsequent years Alexandratos, During this period, almost all the increases in consumption were met by stocks drawdown. The role of China was particularly important in developments during this period: China started running down the huge stocks it had accumulated in the s, with closing stocks of million tonnes in 84 percent of annual consumption , falling to million tonnes by 40 percent of consumption.

These problems prompted policy reforms to reduce stocks, including some relaxation of the policies that obliged farmers to produce cereals OECD, 37; USDA, Indeed, part of the increased production went to rebuilding stocks Figure 1. IR 2 1 1 million tonnes million tonnes 1 Cons. It is important to note that in both periods, changes in net imports played a minor role as contributors to changes in aggregate consumption. They fluctuated in the range of 91 million tonnes to million tonnes The IR had projected that net imports would play a larger role as contributors to the growth of consumption in developing countries.

If developments in the first half of the current decade are a harbinger of things to come, there may be need for radical rethinking of how the future of developing countries is viewed in terms of growing dependence on imported cereals. As already noted, consumption growth in the developing countries is largely on the projected path. Therefore, if projected imports must be lower, the production projections must be revised upwards. This raises the question: Is the IR projection of 1.

Before jumping to conclusions, there is need to take a closer look at the production increases and examine whether the acceleration of growth is likely to prove durable or is the result of extraordinary circumstances. This requires looking at the data for individual countries. Annex 1. For several of these countries the spurt in growth of the last few years represented recoveries from troughs in the preceding years. Such growth rates are certainly not very informative for judging long-term growth prospects.

Change in stocks Change in net imp.

OECD-FAO Agricultural Outlook: : Highlights (eBook, ) [lufitahade.gq]

The key issue is, of course, whether this would affect in any significant way the aggregates for all developing countries and the prospects for growth of their net cereal imports. It has also been noted that consumption in developing countries is somewhat lower than that in the IR. China and India have the potential to influence decisively the cereal trade prospects of the developing countries. The two countries together were net importers in the past, but became net exporters after , reaching peak net exports of 26 million tonnes in , which declined to 4 to 6 million tonnes per annum in the four years to A few years ago, these two giants were seen as turning into net importers again over the medium term.

The latest cereals production forecast for for the developing countries indicates virtually no increase over that of FAO, Food Outlook, June Thus, all China is really a net importer of cereals, both at present and in the projections. In conclusion, the net trade position of the developing countries, being the difference between the much larger numbers of production and consumption, remains sensitive to even small variations of these two larger numbers.

As noted, such views tend to change over time. Many people seem to be mesmerized by the hugeness and high economic growth rates of China and its apparently voracious appetite for livestock products and food in general. This perception may be accurate for some time for things such as energy and metals, but is much less so for food: the income elasticity of the demand for food tends to decline rather rapidly, being limited as it were by the elasticity of the human stomach.

The IR projection of the status of China and India as modest net importers by reflected the dominant view of a few years ago. There is no compelling reason for changing the long-term projections just now, but the matter should certainly be kept under constant review. Production, developed countries: The IR had projected an acceleration of developed country production not accounting for the effects of biofuels in the first projection sub-period to 0.

The advent of the additional demand for biofuels led to production increases that were even faster than projected in the IR 1. The latter By the end of this decade, China could import more than ten times as much wheat, coarse grains and rice as in the recent past. Looking ahead in world food and agriculture are projected to increase by slightly more than percent, with almost all of the increase occurring in developed countries. If it is assumed that all cereals used for biofuels come from home production in the developed countries, when they are excluded, production in becomes million tonnes versus the million tonnes in the IR.

Production, world: For the world as a whole the sum of developed and developing countries , the IR projection is 2 million tonnes for If it were not for biofuels, the IR projection of 3 million tonnes for would not be in need of major revision. However, the advent of biofuels requires at least speculation on possible upwards revisions, perhaps to some 3 million tonnes, as discussed in the section on Biofuels: significance for the long-term outlook.

Meat Consumption, developing countries: The IR emphasized that the fast growth of meat consumption in the developing countries in the s and s reflected predominantly developments in China and a few other countries e. It projected that such growth was bound to slow as these countries reached medium to high levels of per capita consumption. Other developing countries would experience faster growth than in the past, but that would not be sufficient to sustain the growth of consumption in the developing countries and the world as a whole at the high rates of the preceding two decades.

Is this forecast slowdown happening? Table 1.

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Consumption, developed countries: In contrast, meat consumption in developed countries has been growing faster than anticipated in the IR. This contrasts with the IR projections of 83 kg for and 95 kg in The overshooting is wholly due to the strong rebound of consumption in transition countries the former Soviet Union and Eastern Europe in the early years of the projection period after the slump of the s.

Clearly, this must be taken into account in any further discussion of livestock sector prospects. The key issue therefore remains whether or not the developing countries, with their growing weight in world population and meat consumption, are likely to make faster progress than projected from Consumption, world: The growth of world meat consumption has been slowing, from 3.

The IR projects 2. Overall, therefore, the IR projections of world meat consumption can be considered an acceptable longer-term outlook in the light of developments to date, at least in global totals. The commentary on consumption magnitudes therefore also applies to those of production.

It projected that such growth would continue for some time FAO, Tables 2. It also highlighted the growing weight of non-food uses of oils in industry paints, detergents, lubricants, oleochemicals in general and, increasingly, biodiesel. It projected that world consumption for both food and non-food uses would continue to grow at high rates, although not as high as those of the recent past. As the historical data on non-food uses included biodiesel, the IR projections must be considered as containing an allowance for biodiesel, albeit of unknown magnitude.

Straightforward comparisons of quantities such as those shown earlier for cereals cannot be made for vegetable oils. They do not cover other oils and oilseeds coconut, groundnut, sesame, cottonseed, olive, etc. Comparisons of the consumption growth rates are shown in Figure 1. However, the latter include an allowance for biodiesel. By and large, therefore, the IR projections can be considered an acceptable basis for generating a long-term outlook for the sector after adding one or more alternatives for biodiesel use of vegetable oils.

The IR projections indicate a growing export orientation for the vegetable oil sector in developing countries a growing share of total production going to exports , and a growing import dependence in developed countries a growing share of consumption coming from net imports from developing countries, Figure 1. Developed countries are increasing their net imports of oils from 8. At the same time, they continue to be net exporters of oilseeds, predominantly soybeans from the United States of America, to the tune of This is higher than the IR projection for , of 7.

The difference can be attributed to higher oil and oilseed imports following growth of the biodiesel industry in developed countries. Source: FAO, Biofuels: significance for the long-term outlook The potential for using crops to produce biofuels had its moment of glory during the recent price surges of both energy and food commodities. At one extreme, biofuels were vilified as causing the food price surges and, occasionally, as destroying the environment and land and water resources. At the other extreme, The debate subsided with the collapse of oil prices.

These days, headlines are usually concerned with the woes of the biofuels industry following its rapid expansion during the boom years. The industry is now largely kept alive by mandates and subsidies, with the possible exception of sugar ethanol, mainly in Brazil.

However, the issue is not dead. High energy prices are likely to return IEA, ; Stevens, ; McKinsey Global Institute, , and the geopolitical causes driving the quest for energy security are not going away. Add the strength of the farm and biofuel industry lobbies, the continuing relevance of environmental concerns and the prospects for technological change in converting biomass to liquid fuels, and the debate can be expected to reignite.

There is therefore need for one or more projection alternatives to account for biofuel effects. Such projections are not easily made. Currently, biofuel projections are commonly an integral part of most food and agriculture projections. In this area, the latest attempts that contain to varying degrees sufficient detail of the biofuels modules are all medium-term ten years , not long-term.

The last of these provides the most detail, so it is used to illustrate the orders of magnitude involved; Figures 1. World production of ethanol is projected to increase by slightly more than percent from to , with the United States of America, Brazil and the EU27 as the major players. Both Brazil and the EU are projected to increase their shares in the world total.

The IIASA work Chapter 3 , which contains long-term biofuels projections, was not available at the time of writing this chapter. Biodiesel production is seen as growing even faster than ethanol, by percent in the ten-year period. The EU will continue to hold top place, with 42 percent of world production down from the current 50 percent. This reflects the mandate for having a 20 percent biofuels blend in gasoline and diesel by The key issue is what all this may imply for food security and nutrition. Would food consumption be lower with the use of food crops for biofuel production than it would be without it?

It is difficult to provide a concrete answer to this question without running counterfactual scenarios, which is not practicable at the moment. It is not just a question of whether world food and feed consumption would be lower because of the price rises caused by, mainly, biofuels. The IR had projected that net imports would play a larger role as contributors to the growth of consumption in developing countries. If developments in the first half of the current decade are a harbinger of things to come, there may be need for radical rethinking of how the future of developing countries is viewed in terms of growing dependence on imported cereals.

As already noted, consumption growth in the developing countries is largely on the projected path. Therefore, if projected imports must be lower, the production projections must be revised upwards. This raises the question: Is the IR projection of 1. Before jumping to conclusions, there is need to take a closer look at the production increases and examine whether the acceleration of growth is likely to prove durable or is the result of extraordinary circumstances.

This requires looking at the data for individual countries. Annex 1. For several of these countries the spurt in growth of the last few years represented recoveries from troughs in the preceding years. Such growth rates are certainly not very informative for judging long-term growth prospects. Change in stocks Change in net imp. The key issue is, of course, whether this would affect in any significant way the aggregates for all developing countries and the prospects for growth of their net cereal imports. It has also been noted that consumption in developing countries is somewhat lower than that in the IR.

China and India have the potential to influence decisively the cereal trade prospects of the developing countries.

The two countries together were net importers in the past, but became net exporters after , reaching peak net exports of 26 million tonnes in , which declined to 4 to 6 million tonnes per annum in the four years to A few years ago, these two giants were seen as turning into net importers again over the medium term. The latest cereals production forecast for for the developing countries indicates virtually no increase over that of FAO, Food Outlook, June Thus, all China is really a net importer of cereals, both at present and in the projections.

In conclusion, the net trade position of the developing countries, being the difference between the much larger numbers of production and consumption, remains sensitive to even small variations of these two larger numbers. As noted, such views tend to change over time. Many people seem to be mesmerized by the hugeness and high economic growth rates of China and its apparently voracious appetite for livestock products and food in general.

This perception may be accurate for some time for things such as energy and metals, but is much less so for food: the income elasticity of the demand for food tends to decline rather rapidly, being limited as it were by the elasticity of the human stomach. The IR projection of the status of China and India as modest net importers by reflected the dominant view of a few years ago. There is no compelling reason for changing the long-term projections just now, but the matter should certainly be kept under constant review. Production, developed countries: The IR had projected an acceleration of developed country production not accounting for the effects of biofuels in the first projection sub-period to 0.

The advent of the additional demand for biofuels led to production increases that were even faster than projected in the IR 1. The latter By the end of this decade, China could import more than ten times as much wheat, coarse grains and rice as in the recent past. Looking ahead in world food and agriculture are projected to increase by slightly more than percent, with almost all of the increase occurring in developed countries.

If it is assumed that all cereals used for biofuels come from home production in the developed countries, when they are excluded, production in becomes million tonnes versus the million tonnes in the IR. Production, world: For the world as a whole the sum of developed and developing countries , the IR projection is 2 million tonnes for If it were not for biofuels, the IR projection of 3 million tonnes for would not be in need of major revision.

However, the advent of biofuels requires at least speculation on possible upwards revisions, perhaps to some 3 million tonnes, as discussed in the section on Biofuels: significance for the long-term outlook. Meat Consumption, developing countries: The IR emphasized that the fast growth of meat consumption in the developing countries in the s and s reflected predominantly developments in China and a few other countries e. It projected that such growth was bound to slow as these countries reached medium to high levels of per capita consumption.

Other developing countries would experience faster growth than in the past, but that would not be sufficient to sustain the growth of consumption in the developing countries and the world as a whole at the high rates of the preceding two decades. Is this forecast slowdown happening? Table 1.

Consumption, developed countries: In contrast, meat consumption in developed countries has been growing faster than anticipated in the IR. This contrasts with the IR projections of 83 kg for and 95 kg in The overshooting is wholly due to the strong rebound of consumption in transition countries the former Soviet Union and Eastern Europe in the early years of the projection period after the slump of the s. Clearly, this must be taken into account in any further discussion of livestock sector prospects. The key issue therefore remains whether or not the developing countries, with their growing weight in world population and meat consumption, are likely to make faster progress than projected from Consumption, world: The growth of world meat consumption has been slowing, from 3.

The IR projects 2. Overall, therefore, the IR projections of world meat consumption can be considered an acceptable longer-term outlook in the light of developments to date, at least in global totals. The commentary on consumption magnitudes therefore also applies to those of production. It projected that such growth would continue for some time FAO, Tables 2. It also highlighted the growing weight of non-food uses of oils in industry paints, detergents, lubricants, oleochemicals in general and, increasingly, biodiesel.


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It projected that world consumption for both food and non-food uses would continue to grow at high rates, although not as high as those of the recent past. As the historical data on non-food uses included biodiesel, the IR projections must be considered as containing an allowance for biodiesel, albeit of unknown magnitude. Straightforward comparisons of quantities such as those shown earlier for cereals cannot be made for vegetable oils. They do not cover other oils and oilseeds coconut, groundnut, sesame, cottonseed, olive, etc.

Comparisons of the consumption growth rates are shown in Figure 1. However, the latter include an allowance for biodiesel. By and large, therefore, the IR projections can be considered an acceptable basis for generating a long-term outlook for the sector after adding one or more alternatives for biodiesel use of vegetable oils.

The IR projections indicate a growing export orientation for the vegetable oil sector in developing countries a growing share of total production going to exports , and a growing import dependence in developed countries a growing share of consumption coming from net imports from developing countries, Figure 1. Developed countries are increasing their net imports of oils from 8.

At the same time, they continue to be net exporters of oilseeds, predominantly soybeans from the United States of America, to the tune of This is higher than the IR projection for , of 7. The difference can be attributed to higher oil and oilseed imports following growth of the biodiesel industry in developed countries. Source: FAO, Biofuels: significance for the long-term outlook The potential for using crops to produce biofuels had its moment of glory during the recent price surges of both energy and food commodities.

OECD-FAO Agricultural Outlook: 2006-2015

At one extreme, biofuels were vilified as causing the food price surges and, occasionally, as destroying the environment and land and water resources. At the other extreme, The debate subsided with the collapse of oil prices. These days, headlines are usually concerned with the woes of the biofuels industry following its rapid expansion during the boom years.

The industry is now largely kept alive by mandates and subsidies, with the possible exception of sugar ethanol, mainly in Brazil. However, the issue is not dead. High energy prices are likely to return IEA, ; Stevens, ; McKinsey Global Institute, , and the geopolitical causes driving the quest for energy security are not going away. Add the strength of the farm and biofuel industry lobbies, the continuing relevance of environmental concerns and the prospects for technological change in converting biomass to liquid fuels, and the debate can be expected to reignite.

There is therefore need for one or more projection alternatives to account for biofuel effects. Such projections are not easily made. Currently, biofuel projections are commonly an integral part of most food and agriculture projections. In this area, the latest attempts that contain to varying degrees sufficient detail of the biofuels modules are all medium-term ten years , not long-term. The last of these provides the most detail, so it is used to illustrate the orders of magnitude involved; Figures 1. World production of ethanol is projected to increase by slightly more than percent from to , with the United States of America, Brazil and the EU27 as the major players.

Both Brazil and the EU are projected to increase their shares in the world total. The IIASA work Chapter 3 , which contains long-term biofuels projections, was not available at the time of writing this chapter. Biodiesel production is seen as growing even faster than ethanol, by percent in the ten-year period. The EU will continue to hold top place, with 42 percent of world production down from the current 50 percent. This reflects the mandate for having a 20 percent biofuels blend in gasoline and diesel by The key issue is what all this may imply for food security and nutrition.

Would food consumption be lower with the use of food crops for biofuel production than it would be without it? It is difficult to provide a concrete answer to this question without running counterfactual scenarios, which is not practicable at the moment. It is not just a question of whether world food and feed consumption would be lower because of the price rises caused by, mainly, biofuels. However, food security and nutrition issues are related to the food consumption in countries where large proportions of the population are undernourished or just above the threshold for undernourished in terms of minimum daily energy requirements [MDERs] — see section on Food consumption and nutrition in developing countries.

In such countries, food price rises could aggravate the situation of those below the threshold and push some of those above it into the class of undernourished. None of the ten-year projection studies offers scenarios with and without biofuels. As seen in Table 1. Has this led to a reduction in per capita consumption? The CBS data can be used to figure out only how per capita consumption of cereals for all uses evolved over the last few years. The relevant question is whether or not per capita consumption is less than it would have been in the absence of the price surges.

It is also noted that the number but not the percentage of population undernourished may increase even when per capita consumption does not decline, or even increases a little. This can happen because of population growth. As noted, the risk of the nutritional situation deteriorating in the wake of price surges is highest and most relevant in countries with low food consumption levels and significant proportions of their populations undernourished. To shed light on this, Figure 1.

Again, it is seen that no country group suffered a decline. On the contrary, per capita consumption increased in all groups. This is not equivalent to saying that the diversion of grain to biofuels and the associated price rises had no impact on the numbers undernourished: it is possible that were it not for biofuels, the per capita consumption of cereals would have improved by more than shown in Figures 1.

As noted, the IIASA analysis suggests that in the projection period to , some two-thirds of the cereals going to biofuels could come from increased production, and the balance from reduced consumption of food and, mainly, feed. Even without resorting to feedstocks of non-food crop biomass second- generation biofuels , by-products e. The increases in biofuel production will therefore require less than proportional increases in feedstocks from cereals and the major edible vegetable oils Figure 1.

Nevertheless, in the projections, growing shares of world cereals and vegetable oils consumption will be for biofuels, as shown in Figure 1. What about projections beyond ? Assuming that two- thirds of this additional demand would come from increased production as in the estimate in IIASA, , the original projection of 3 million tonnes in Table 1.

These are all speculative ballpark numbers and are offered to provide some orders of magnitude. If they turn out to be approximately correct, world agriculture could perhaps cope with the problem without incurring significantly higher stress over that implied by the need to increase cereals production by some million tonnes projected in the IR, in terms of the required land-irrigation- yield configurations shown in Chapter 6. The investment frenzy that underpinned expansion of the biofuels industry during the recent price surges for petroleum is telling.

It may happen again, and the energy sector must be seen as competing with the food sector for supplies when it is profitable for it to do so. The latest McKinsey 63 report forecasts an annual biofuels growth rate of The latest United States Government energy outlook to EIA, has world biofuels growth rates in the range of 10 percent low oil price case to 14 percent high oil price case per annum from to Annual growth declines drastically in the subsequent decade, to between 3.

In conclusion, food-fuel competition is likely to continue into the future. Any analysis must address the eventuality of such competition intensifying, with adverse effects on the food security of some countries and population segments: if this happens, the purchasing power of those demanding more energy could easily overwhelm that of the poor demanding food see further discussion in Schmidhuber, ; Alexandratos, Further declines were projected for and , with the World Food Summit target of halving the numbers undernourished by being within sight shortly after Is this still the case?

What do the more recent data show? As noted, the latest food consumption data from FBS go to Of course, it is quite possible for the number undernourished to increase because of population growth, if the increase in per capita calorie intake is small, as is the case here see previous paragraph and Table 1. However, the question arises: Do the most recent estimates indicate a real reversal of the trend towards gradual and slow declines in the numbers of undernourished, or is this just data noise?

To understand what is happening, it should be noted that the data for per capita consumption, population, MDERs the threshold for classifying people as undernourished and the measure of inequality the coefficient of variation [CV] have all been revised rather drastically. These are the key data and parameters used to estimate undernourishment. Such declines cannot but take a heavy toll of the estimates of undernourished, ceteris paribus.

Furthermore, EU feedstock based biofuels play a key role in keeping the agricultural value of lands. The situation in the EU when dealing with the biofuels dimension cannot be compared to other major economies. There are a number of unique factors at play. The overall agricultural area of the EU is declining [16] and is expected to continue to do so Hart et al, Farmland abandonment is a persisting phenomenon in a number of areas, especially in remote and intermediate areas, despite the compensation policy put in place since the s via the Common Agricultural Policy, with tools such as Less Favored Area payments or coupled payments.

Over the period —, EU agricultural land in the EU has declined by more than 1 million ha per year Urban areas have continued to expand over this time, with the most reliable estimates suggesting that , hectares of agricultural land are built on every year. When it comes to arable crops production, the area cultivated has reduced slightly since This trend continued also in the last 3 years almost 1,5 Mha since Areas in cereals cultivation have decreased on average by 1 Mha since , while the specific area dedicated to maize has remained stable in the last years, while the area on soft wheat has increased by around 1Mha between and balancing the decrease of the barley lands.

Oilseeds remain relatively stable with the decrease of the sunflower area being compensated by an increase in rapeseed hectares. Figure Total cereals balance sheet in the EU, million tonnes. As shown in the Table above, the market for arable crops has been marked by several consecutive years of record supply especially from [19]. EU cereals production is expected to grow further, to around million t by , despite the problems faced in some EU regions in As the Table above shows, around 8 mio t of cereals were processed in for bio-ethanol 2.

Later on, domestic consumption grew over the medium term, mainly driven by the rapid growth in bioethanol use.

Producing Fuel and Feeds – a matter of security and sustainability for Europe

What appears quite clearly is that p roduction of biofuels complements food demand: the increased production of bioethanol had no impact on the availability of cereals for human or animal feed consumption but instead, production of biofuels is vital for the animal feed co-production. U wheat production has increased over the years, despite the decreases in and in Furthermore, the drop in , contradicted previous estimates.

Overall areas in cereals have decreased on average by 1 Mha since It should be noted that domestic wheat consumption is almost equally spread between feed and food uses. During this period, the EU production has experienced increased competition from imported maize the Ukraine notably , putting pressure on the European maize sector in terms of prices. Facing such competition, the European sector has been able to maintain its area and invest in productivity mainly thanks to the ethanol sector, which sources locally grown maize.

Without this new intra-EU demand, a net drop of European maize production would likely have been experienced, in particular in areas facing deficit of competitiveness and remoteness principally in the EU The latest estimates of the EU maize harvest show a significant decrease compared to the prospects from the summer. Adverse climate conditions throughout the months of May and June this year, as indicated in the Short Term Outlook for EU arable crops, dairy and meat markets — Autumn [21] had a significant impact both on cereal yields and quality.

Taking into account the objectives of the reform of the European sugar policy in , the decision taken by the EU to open more its market to imports of sugar from LDCs, and the EU commitment to the WTO to limit its exports to world markets following WTO panel , the limit of the loss of sugar beet areas in the EU and the correlative safeguard of rural economies in the sugar beet regions have resulted from the development of the production of more sugar beet bioethanol.

Oilseeds production. Figure Total oilseed grains and beans market balance in the EU, million tonnes. EU oilseed production, after the relatively low and harvests with It is relevant to note that vegetable oil is mainly used in the food industry and to produce biodiesel. Oilseed meals are an important protein-rich animal feed ingredient that the EU has to import massively to answer demands of its livestock sector.

In the EU context, oilseed demand specifically is mostly driven by feed use and the oilseed meal demand of EU markets. The targets set out in the Renewable Energy Directive for the mandatory use of biofuels in the EU by , these have encouraged the use of vegetable oils in the EU, and as a result of this, domestic oilseed production has grown in recent years. In recent years the use of waste or faux waste oils used cooking oils and tallow has increased, because biodiesel produced from waste oils benefits from double counting under the Renewable Energy and ILUC Directives.

Biodiesel produced locally using European feedstocks relies primarily on rapeseed. As the Figure above shows, since , rapeseed production in the EU has increased substantially. As also FAOstat estimates confirm, European rapeseed oil production has almost doubled from to , an increase of 4.

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This has been allowed by the accelerating introduction of biodiesel in the same period. In particular, over the past decade, domestic oilseed production has been characterised by a large expansion of the rapeseed area, which is due mainly to biodiesel demand, and also by demand for protein meal. Summary of the main findings concerning biofuels and agricultural production in the EU. Biofuels development in the EU over the last decade has occurred in a context of a general decrease of the total European agricultural area.

Considering the decisions taken formally by the EU on CAP and trade policy, the European production of biofuels equally for locally sourced bioethanol and biodiesel and its development has had no negative impact on supply available either for the European or the world food markets. In fact, the development of European wheat, maize and beet based bioethanol and of European rapeseed biofuel has generated the production of by-products for the livestock sector allowing the EU to substantially reduce its dependence on imports of feed meals soya notably and increasing correspondingly the availability of agricultural products on the world markets as developed in the next section of this report.

Considering the European rural economy, the development of European sourced biofuels has been the single most immediate, available, efficient and concrete answer to the challenges underlined at the European level by the three main European institutions, i. Finally, it is important to reiterate that global biofuel demand can hold at current levels, and could also grow.

A balanced development of the biofuels industry has the capacity to provide a stable demand for EU agriculture in areas, where productivity gaps are present. Along with this, it could respond at the same time to the sustainability expectations of society. Developing synergies between EU sustainable biofuels with agricultural production, could represent a way to counterbalance agricultural markets risks, while contributing to climate change adaptation and mitigation efforts. In particular, the cultivation of crop-based feedstock for biofuels, notably on marginal lands, should be promoted as a way to minimise the risk of loss of agricultural land in the EU while increasing European and global food security thanks to co-production of extra rich protein meals.

Furthermore, utilising agricultural land in this way, would create an additional and most importantly, a stable income source for hundreds of thousands of European farmers. However, from a more global point of view, issues and concerns related to UCO Used Cooking Oil of which a growing part is being imported should be tackled properly, since UCO outside the EU is generally not a waste and is used for both feed and fuel. Biodiesel production based on European rapeseed has built its development on the increase of EU rapeseed production, while EU oilseeds area has remained quite stable see Table A11 in Annex.

As a result and concerning rapeseed protein meal, the production has doubled between and today. Specifically, 9. While the rapeseed oil is used to produce biodiesel, its by-product protein is available as a new supply for the EU livestock sector. This increase of availability of vegetable protein in the EU has consequently a direct impact on the production of feed materials for use as animal feeds, thus reducing their imports. A recent report developed by the European Parliament estimates that the deficiency of protein crops in the EU amounts to 20 million tonnes [24].

Soybean meal imports declined, especially from peak level, as a result of increased vegetable protein meal production within the EU which allowed to avoid imports each year of nearly 10 million tonnes of rich protein meal, reducing the EU deficiency by one third. While food consumption of rapeseed oil has been steady for decades, and oilseed output is also unchanged from 30 years ago, the development of an increasing European supply of protein meal has been made possible by finding alternative outlets for oil.

It is evident therefore that feed meal production, biofuel production from European vegetable oils and cereals are key and today the only quantitative option for improving and securing the availability of higher volumes of vegetable protein produced locally and used as animal feed source, limiting imports. The EU biofuels industry processing rapeseed and cereals now produces approximately 13 million tons annually of high protein meals that otherwise would be imported from the Americas.

It should be underscored that every liter of biodiesel produced from palm oil or UCO instead of from rapeseed means a lost kilogram of EU protein meal production. In that respect, Europe should have the ability to produce enough feed proteins and to reduce drastically the reliance on imported feed materials. For every tonne of cereals used by the industry as much animal feed is produced as ethanol. In bioethanol companies produced 5. This 3. On average, 2. The same applies for sugar beet. Vinasse can be used as a rich non-mineral based fertiliser, animal feed or a source of biogas production, whereas, pulp can be used for animal feed or biogas production.

Through the added value of domestically co-produced ethanol and animal feed, 1 hectare of sugar beet or wheat cultivated for EU ethanol production can free up to 1. This has the hugely positive consequence of limiting deforestation across the globe. Whereas in , the most advanced ethanol biorefineries in Europe produced only animal feed and ethanol, today they produce ethanol, animal feed, vegetable oil, nutraceutical products, various products for human food, bio-electricity, fertilizer and other products.

As stated previously, the development of European wheat, maize and beet based bioethanol and of European rapeseed biofuel results in the production of substantial valuable co-products being to the European livestock sectors. All the arguments stated above should amply answer the food security concerns related to conventional biofuels production within the European Union. In , the soaring prices of agricultural markets — in the wake of oil and other raw materials concerned — led to l arge price volatility see Figure below.

Until biofuels were presented by the media and the public authorities as the solution to energy problems, and actors in agribusiness were regularly blamed for their delay in making the necessary investments. During the rise of the food prices, the rising demand of biofuels was pointed to by some experts as well as organisations as one of the main causes.

Agricultural commodities make only a small proportion of the overall production costs of processed foods [28]. Price volatility in agricultural markets is mainly influenced by higher transportation costs, high inputs costs and the cost of energy, among the others, as stated by Von Witzke and Noleppa study. In particular, considering EU production of biofuels, it has had almost no impact on the evolution of prices of basic agricultural commodities as price developments were primarily correlated to changes in world prices.

On the contrary, the damping effect of the biofuels sector and its benefit in animal feed are recognised. This does not mean that biofuels have no impact on food prices, but a direct causation between the factors cannot be established. The debate in this regard, should be shifted from simplistic patterns to a more objective basis. At the end of the problematic and volatile conditions seemed to have returned: a slowdown in global growth, a sharp fall in oil prices, and agricultural markets facing a general decline.

All products were affected and farm incomes fell sharply worldwide. This was amplified in Europe by elements affecting the livestock sector following the abolition of milk quotas and the Russian embargo on imports of pork and poultry, as well as the production of major crops cereals, oilseeds, sugar which were also struggling. In this context, European sourced biofuels help in limiting the adverse effects of the food markets U-turn, offering some economic stability.

The European Union established a biofuels support policy in with the aim of lowering CO 2 emissions in the transport sector. In this way, varying objectives were expected to be achieved:.