Wednesday, December 12, 2007

[PBN] RSA: Maize excluded as biofuel feedstock upsets Agro Industry


S.Africa biofuel plan upsets Monsanto, maize farmers
Tue 11 Dec 2007, 14:53 GMT
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By Muchena Zigomo

JOHANNESBURG (Reuters) - Monsanto on Tuesday criticised a decision by
South Africa to exclude maize from its biofuels policy, saying it would
hurt farmers and deal a blow to the government's land reform policy.

Monsanto and farmers' umbrella body Grain South Africa have both said
they oppose the decision.

The government cited concerns over food security when it announced its
decision last week to remove maize from the list of crops that could be
used in the initial stage of the long-awaited biofuels strategy.

"The fact that government presently does not support the initiative for
the manufacture of ethanol from maize could possibly hold serious
negative consequences for the maize industry and government's land
reform policy," said Kobus Lindeque, managing director of Monsanto for
sub-Saharan Africa.

"We in the agricultural sector want to say to government that we are
willing to assist with agricultural matters. Big international
agribusinesses invest in the country and its economy, and government
must realise that we are here to stay. For that reason we have to map
the future together."

Monsanto said it had a big stake in the country, having invested
"billions", and was considering further expansion.

Lindeque said using maize for biofuels would allow the government to
settle black farmers on farms through its land reform policy with a big
demand for maize that they could plant.

"Now government wants to put a lid on all this," he said.

South Africa plans to hand 30 percent of all agricultural land to the
black majority by 2014. Under apartheid, the white minority owned most
of South Africa's agricultural land.


The use of maize for biofuels had been seen at one point as part of a
rescue plan for farmers who have in the past seen a surplus harvest push
prices lower. Maize farmers in particular have in previous seasons
struggled to stay profitable as bumper harvests pushed maize prices to
multi-year lows.

Kobus Laubscher, a senior official of Grain South Africa, said the group
had been involved in the formulation of the biofuel industrial strategy
since the very beginning.

"It is therefore with great concern that we take note of the intention
by Cabinet to exclude maize as feedstock."

The sugar sector is seen as a major beneficiary of the new biofuels
policy, with sugarcane and sugar beet to be used to produce bioethanol.
The sector was now awaiting the details of the biofuels policy.

"It's good news that we've got a strategy ... we need to make a start
and grow it from there," Adrian Wynne, an official at the South African
Cane Growers Association, told Reuters.

Illovo Sugar, South Africa's unit of Associated British Foods, said it
was waiting for more clarity before commenting on the policy. The firm
already has plans to invest in bioethanol and is set to build a sugar
mill, ethanol plant and electricity co-generation unit in Mali.

The strategy proposes a 2 percent biofuels production by 2013, which is
a revised target from 4.5 percent target proposed in the draft strategy,
mainly due to concerns such as price increases and the fact that maize
is a staple food for the majority of the poor in the country.

© Reuters 2007. All Rights Reserved.

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