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Renewable fuels will revolutionize agriculture, says U.S. official

20 February 2007,

NAIROBI: Growing demand for clean fuels distilled from plants will likely revolutionize agriculture in both rich and poor countries, a top U.S. agriculture official said Monday during a trade mission to East Africa.

Michael Yost, the head of the U.S. foreign agriculture service, said African and American farmers both stood to profit from the growing demand for grains that can be converted to ethanol or biodiesel, two clean burning substitutes for gasoline and normal diesel fuel.

"The advent of renewable energy is global," he said in an exclusive interview. "I think it could be the biggest paradigm shift we have seen in a long, long time in agriculture."

Farmers who produce grains, sugar and plant oils all stand to benefit from the growing demand for biofuels and the higher prices that will surely follow, said Yost, who serves as a top official in the U.S. Department of Agriculture.

Yost spoke during an interview on the sidelines of the U.S.-East Africa Region Agribusiness Trade and Investment Mission. The conference brought together U.S. and East African business people to look for investment, trade and partnership opportunities.

Kenya's minister for trade, Mukhisa Kituyi, told the conference that African governments recognize that agriculture is their strongest industry. He said Africa wanted to move from producing raw materials to processed goods.

Kituyi also said the economics and politics of global trade in cereals has been turned upside down by the rising price of oil, global warming and new interest in biofuels produced from grain.

"The fact that there is now an insatiable market in converting cereals into biodiesel not only escalates the prices of cereals around the world, but threatens to take food out of vulnerable mouths," he said. "A new opportunity has been created."

He said if managed properly, African farmers could see a greater market for their goods and less competition from farmers in developing countries.

Yost said he was confident that the global market would answer the growing demand, but acknowledged that food aid for the needy could become more expensive in the future. He said donor governments would always make funds available to buy food for those who need it.

Some U.S. agricultural companies already do business in Africa, Yost said, but that investment stood to grow in the years to come and that was why the mission, which included 15 U.S. companies, was in Kenya.

"They are looking to see what is the potential here and what is the atmosphere here," he said.
Concerned about global climate change and dependence on Middle East oil, U.S. and European leaders have set high targets for increasing the use of biofuels. Some experts question whether farmers in those regions can meet the demand, possibly creating a market for African farmers.

Yost said in less than a year the U.S. government has been able to drop all trade-distorting subsidies for grains and oil seeds because of the increased demand for biofuels.

"We've had discussion today with different African agribusiness's and they are looking for technology, they are looking for know-how," he said. "With the rising demand for renewable energy, I see it raising prices and raising interest, raising the investment potential around the world, everywhere."
© The Canadian Press 2007

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