Rising Demand for Renewable Energy
Michael Yost, the head of the U.S. foreign agriculture service, said African and U.S. 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 interview. “I think it could be the biggest paradigm shift we have seen in a long, long time in agriculture.”
Kenya’s minister for trade, Mukhisa Kituyi, told the U.S.-East Africa Region Agribusiness Trade and Investment Mission conference that African governments recognize that agriculture is their strongest industry and that Africa wanted to move from producing raw materials to processed goods.
Kituya 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.
U.S. and European leaders are concerned about global climate change and dependence on Middle East oil, and 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’ 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.”