Africa needs more investment in farming to cope with soaring food prices due in part to growing biofuel production in the West, but it could profit from rising demand for alternative energy, an IMF official has said.
The explosion of biofuels production from food crops, subsidised by some Western countries as a less environmentally damaging alternative to fossil fuels, has contributed to a surge in food prices with grains and other crops at record highs.
"The priorities for Africa are adapting to this new situation," said Charles Collyns, deputy director of the International Monetary Fund research department. "The reality is that food prices are going to be higher going forward than they have been in the past. This creates both problems and opportunities," he said.
African governments should focus more on developing farming, which not only provides food but helps improve incomes in rural areas where many of Africa's poor live, Collyns said. "It's important to build up infrastructure, to build up institutions to allow these people to participate in the global economy, to take benefit from the higher prices that are coming from agricultural goods to produce new products, both for domestic consumption but also for export," he said.Collyns criticised Western governments who subsidise biofuels production, saying some operations did not significantly reduce emissions of greenhouse gases, and hurt poor countries by contributing to food price rises.
"In the IMF we are also worried about the impacts of policies to produce biofuels. A third of the increased demand for grains in recent years is coming from the use of grains for biofuels. This is very inefficient because in fact there are other ways of producing biofuels ... using lower-tier agricultural crops," he said.
With adequate investment, African countries could benefit from new biofuels technologies by growing sugar or possibly the jatropha plant, Collyns said.
He urged Western governments to open up their markets to biofuels imports rather than subsidising domestic production.
Reuters
