Poor maize crop could dent South Africa biofuel hopes

27 July 2007, Genetics News
URL: http://www.checkbiotech.org/green_News_Genetics.aspx?infoId=15191

Two seasons ago, when a bumper harvest pushed South African maize prices to four-year lows, it seemed like a good idea to plough all that excess maize into biofuels -- energy tapped from crops like sugar and maize.

But for the second year in a row, South Africa faces a season of slim pickings after a drought slashed maize production, raising doubts about how a country with such a poor farming climate can produce crops to meet the government's ambitious green energy targets.

The projected harvest of 7.05 million tonnes for 2006/07 -- although higher than last season's 6.61 million -- is almost one million tonnes short of annual demand and some local market players fear it could be far smaller.

South Africa wants biofuels to contribute up to 75 percent of renewable energy needs by 2013 and create thousands of jobs -- not only to join the global clean energy drive but to help its struggling farming sector grow the market for its produce.

South Africa has in the past frequently produced more than enough maize to make it a net exporter but this season it may actually need to import white maize to stave off a shortage.

"They were very positive to use maize as a source for biofuel when prices were low and the rand was weak but now the maize price is high and the rand is much stronger, which means that ratio is much less favourable than a year or two ago," said Theo Kleynhans, professor in agricultural economics at the University of Stellenbosch.

"It means that maize as the main source of biofuels is not viable."

Woeful climate

Sixty-five percent of South Africa receives less than 500 mm (about 19 inches) of rain per year, which is widely viewed as the minimum requirement for decent dry-land farming, according to government figures.

Roughly a fifth of the country, mostly the arid west which makes up a big chunk of the grain belt, receives less than 200 mm of rainfall. And local farmers have been slow to counter such a woeful climate.

Jannie de Villiers, executive director of South Africa's National Chamber of Milling, is optimistic new technology and drought resistant crops can make up for the rain shortfall.

But he acknowledges that such measures are years away and that South Africa lags far behind countries like Brazil and Argentina, which have made agriculture the backbone of their economies with the help of technology.

"I wish we could have looked at it from a regional perspective. Then it would make sense," de Villiers told Reuters, suggesting a regional biofuels industry would be viable if it included the more ideal climates of Zambia and Malawi.

These countries could soon overtake South Africa as southern Africa's top food producer, given better agricultural conditions and government support for their industries, analysts say.

Kleynhans, who has conducted research on the topic, said South Africans would be better off investing in drought resistant crops as a source of biofuel in marginal areas, leaving prime land open for more essential vegetation.

As for the goal of biofuels meeting 75 percent of renewable energy needs by 2013, he said: "There's a lot of technology we'll have to develop before we can get nearer to these targets."

But Nico Hawkins, manager for industrial services at farmers' union Grain SA, said he fancied the chances of a successful biofuels programme based on South Africa's record as a maize nation.

"I think it's wrong to look in the short-term ... If you look at our average yields, we do produce surplus maize for exports to our neighbours," he said.

"We say the development of a biofuels industry creates a bigger market for local maize and that's a good thing."