Biofuel mandates to be abolished?
Carmel Cahill, senior counsellor in the OECD’s Trade and Agriculture directorate, said the demand for biofuel is a leading factor for the main commodity crops. “In the long term mandates are a bad policy,” She also said growing populations and income in emerging economies were a main factor in food price rises. The impact of biofuels on food prices “has been very big, because what we’ve seen is that under the influence of policy-driven … mandates, the demand for biofuels rose fast over a relatively short period, so the supply capacities have had trouble keeping up.”
Cahill’s comments on biofuels came two days after EU Climate Commissioner Connie Hedegaard and Energy Commissioner Günther Oettinger vowed to limit crop-based biofuels to 5% of total energy consumption. "It is wrong to believe that we are pushing food-based biofuels. In our upcoming proposal for new legislation, we do exactly the contrary: we limit them to the current consumption level, that is 5% up to 2020," the commissioners said in a joint statement.
Cahill spoke in Brussels as the OECD released a report on agricultural policy . The report shows that while farm support schemes and trade barriers remain, they have been on the gradual decline in both the EU and leading farm producers in the past decade. In the EU, direct payments to growers account for 20% of gross farm income in 2011, well below Norway (60%), Japan (51%) and Iceland (47%), but marginally above the OECD average – 19%. The €182 billion in support to producers in the 34 OECD countries last year was a record low. Discussions on the future CAP are on hold pending agreement on the EU’s 2014-2020 budget. Earlier plans for spending € 436 billion – of which €317.2 billion would fund direct payments to farmers under Pillar 1 of the CAP – now seem uncertain.
