Jorge Perez-Lopez

FOOD VS. FUEL: A FALSE DILEMMA FOR CUBA—A SURVEY OF THE ISSUE Antonio Gayoso The objective of this essay is broadly to assess the and biodiesel. Currently, strong interest in the pro- factors that determine whether the production of duction of biofuels derives from several factors. To biofuels from biomass could be viable in Cuba and wit: whether it could compete with food production. This question is important in view of the significant First, the high price of oil prevalent during the past decreases that have occurred in Cuba’s agricultural few years, as the result of supply limitations agreed and food production during the past several decades. upon by the Organization of Petroleum Exporting Countries (OPEC). In addition, the world is experi- In particular, shortages of staple food products have encing an apparently insatiable demand for hydrocar- characterized the last twenty years and, although bons, spearheaded by countries such as China and famine conditions have never materialized, the coun- India. High oil prices have enhanced the economic try has had to import foodstuffs it used to produce viability of producing biofuels. before. In 2006, according to the Communist Party official newspaper Granma, Cuba commercially im- Second, has been the growing consensus, now sup- ported nearly 85 percent of its food needs. For more ported by scientific evidence, about the impact of hy- than a decade, it has also depended on food dona- drocarbon consumption on climate change. Indeed, tions from the United Nations World Food Program most scientists now believe that continuous and in- (WFP) to feed more than 700,000 families in the five creasing use of hydrocarbons is a major factor in eastern-most provinces. global warming. This impact, if not abated, could In addition, Cuba’s capacity to import the food it have significant negative effects on the world’s ecol- needs, as well as other critical goods, has severely de- ogy, on agricultural productive capacity, and on food teriorated with the collapse of key exports sectors, production in most countries. particularly sugar, and the suspension of large subsi- This last concern is important because, according to dies from the former Soviet Union. Currently, capac- the Food and Agriculture Organization (FAO) of the ity to import food has increased somewhat with the United Nations, there are an estimated 850 million subsidies from Venezuela. A large portion of these people with diets well below internationally-accepted food imports comes from the United States. minimum norms. Widespread decreases in food pro- OVERVIEW duction would make this situation worse. It is impor- The potential dilemma between the production of tant to note, however, that there is consensus on the bio fuels, based on agricultural feedstock, and food fact that poverty—lack of income—and not the lev- production has become a controversial issue for pol- el of available food supply, currently adequate, is the icy makers. In this context, biofuels include ethanol major cause of hunger in the world. 212 Food vs. Fuel: A False Dilemma for Cuba Third, added to the potential impact of global warm- Whether or not it is an issue would depend on a ing, is competition for productive land. A major con- thorough assessment of suitable land availability, cern has been that production of biofuels, based on yields, and technologies available or used in the agricultural feedstock, might divert agricultural land country or, said in simpler terms, economic feasibili- and feedstock into biofuel production, thus decreas- ty of different alternatives, under different policy ing food supply and increasing the price of staples. frameworks and organizational sectoral structures. Recently, the price of both sugar and maize, main in- Only such an assessment would answer the question puts used to produce ethanol, has risen rapidly as de- of whether Cuba has the physical and ecological ca- mand for them by ethanol distillers has increased sig- pacity to produce most of the food it requires while nificantly. This is the core reason for the food vs. also producing feedstock for a biofuel industry. fuel potential dilemma. TECHNOLOGY CONSIDERATIONS Technologies used to produce ethanol from corn Finally, economic and political vulnerability. That is, and cane sugar are well known and relatively straight- the concern, on the part of oil importing countries, forward. In the case of biodiesel, currently derived particularly the United States and the European from oil seeds such as rapeseed, as well as from palm Union (EU), that continuous dependency on oil oil and soybeans, the technology is also simple but from a few, often strongly adversarial and unstable more costly, on a per unit basis, than that used for producers, is not politically advisable and could lead ethanol. For both ethanol and biodiesel production, to political instability. even with oil at $70 a barrel, production is not cost competitive with hydrocarbons in most countries. These preoccupations have resulted in government Thus, in all countries, except currently in Brazil, policies that emphasize the production of alternative there is significant protection via tariffs or subsidies. fuels, mainly ethanol and biodiesel, which could de- As the price of oil inches its way to $100 per barrel, crease the demand for hydrocarbons. These actions however, cost ratios will change in favor of biofuels. have also led to governments’ decisions to set man- datory levels of use of these alternative fuels in the Ethanol can also be produced from a wide variety of short to medium term. Additional attention has been other feedstock. These include prairie grasses, re- placed on research on the direct uses of biomass for newable biomass and residues from forestry and ag- the production of energy, a practice that has been ex- ricultural cropland, and even municipal wastes. Many tensively followed by the world’s peasantry in their of these agriculture-based sources grow on marginal households and by many countries in some of their lands, not suitable for food crops. Therefore, their industries. use as feedstock would not divert land from food production. However, the technology necessary for These issues and factors are important for Cuba. The producing cellulose-based ethanol from these sourc- country does not produce but one-half of the oil re- es is still under development. According to rough es- quired to meet its current energy needs, even for an timates by the U.S. Energy Information Administra- economy at a depressed level of activity. Cuba, how- tion, the capital costs associated with cellulosic ever, has had long—albeit limited—experience in ethanol production are several times greater than the production of ethanol from sugar and of its use those for conventional ethanol production. as a supplement for gasoline, as well as in the direct LOCATION OF CURRENT BIOFUEL use of biomass (sugar cane bagasse) to produce ener- PRODUCTION gy in the sugar mills’ boilers. Because of the dismal Brazil and the United States are the world’s largest status of the island’s agriculture and food sector, the producers of ethanol, the first relying on sugar cane, food vs. fuel dilemma could be real for Cuba, should and the second mostly on maize, a basic food and there be a policy shift to emphasize ethanol produc- feedstuff. According to a recent World Bank study tion from sugar cane and other feeddstock. on trade and biofuels, prepared by its Energy Sector 213 Cuba in Transition • ASCE 2007 Management Assistance Program (ESMAP), only iesel feedstock. Furthermore, fears abound about de- Brazil’s ethanol program has attained economic sus- forestation in the Amazon and in the Indonesian for- tainability, as the country, after two decades, no lon- ests, in order to plant soybeans and oil palm, because ger uses subsidies or protection to support growth of that shift would increase the environmental and eco- the industry. Certain tax incentives, favoring the use logical costs of producing biofuels. of gasohol or pure ethanol as transportation fuels, re- main though. IS THE THREAT AGAINST FOOD PRODUCTION TRULY SERIOUS? Close to 50% of the sugar Brazil produces goes into According to a study by the UN Foundation, as well ethanol production. Parallel to this, its automotive as the FAO (OECD and FAO, Agricultural Outlook, industry has developed a variety of cars and trucks 2007–2016), there are sufficient land areas worldwide that can use a wide range of combinations of ethanol to increase production of feedstock for biofuels and gasoline. Ethanol now accounts for more than without significantly affecting the adequacy of the 40% of Brazil’s ethanol/gasoline sales. food supply. The development of cost effective cel- In addition to sugar cane, ethanol can be produced lulosic ethanol technology would decrease pressure from other food stock such as maize, sugar beets, on cropland, as agricultural residues could then be- wheat, cassava, and other starches. Sugar, however, come major feedstock to the industry. For instance, seems to be the most cost effective raw material. In agricultural residue from maize areas could be the the United States, ethanol production originates source of ethanol without affecting the use of maize mostly from maize. This crop is heavily protected by grain for food and feed. a tariff on ethanol imports, without which ethanol By way of illustration, in the United States, there are production from maize would be unprofitable. It is about 400 million acres under cultivation. These ar- because of this tariff, and the government-mandated eas consistently produce surplus food crops. Howev- use of ethanol as a supplement to gasoline, that the er, it is estimated that one half of nation’s 2.26 billion industry subsists and grows. acres have some potential for biomass production. In Biodiesel production, concentrated in the EU and addition, most researchers believe that increases in based mostly on rapeseed oil, is still far from com- food crop yields will continue that will make feasible mercial viability and remains heavily underwritten by to feed more people from a given area cropped.

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