Greens on the table or fuel in the tank?

As a result of government promotion of biofuels, in recent years there has been a marked rise in demand for crops like oilseed rape, wheat and maize and this trend looks set to continue in the future. These developments also affect vegetable processors like HAK (Neerlands Glorie Conserven BV), as demand for energy crops also means greater demand for farmland. Based on net impact calculations, it is concluded that a doubling of the grain price would lead to a 50-90% increase in the price of vegetable crops like peas, beans and spinach. According to forecasts by OECD/FAO and others, in the longer term there should be only minimal effects on the price of these crops. Policies on biofuels are still evolving, creating a dynamic market with numer-ous uncertainties. Prices are also affected by the oil price and by how global agriculture responds to changing circumstances. In addition, a growing num-ber of countries are setting sustainability standards for biofuels, which in many cases are designed to reduce pressure on land resources as well as competi-tion with food production. Given this trend and the tumultuous pricing devel-opments of 2007, it is not currently possible to make any solid predictions for the longer term.

Report

Authors CE

Geert Bergsma
Bettina Kampman

Delft, December 2008