The rapid growth of Philippines’s economy has led to an increase in demand for energy which has raised concerns in the country about the national energy security. Philippines imported 100 million barrels of oil in 2004 which satisfies 36.6 percent of its energy requirements. It is expected that the oil import requirements of the country would reach 120 million barrels in 2013. Annually, the country needs approximately 500 million liters of ethanol for the production, which means the country requires 25 ethanol plants to produce annual output of 20 million litres. The country’s first ethanol plant with that production capacity, San Carlos Bioenergy Inc., was built in San Carlos city. Given to the energy security concerns of the nation, the replacement of oil by using bioethanol as a fuel has significantly increased and hence the expansion of agricultural production on arable land is needed.
The Biofuels Act in the Philippines was adopted in 2007. The main thrusts of the law intend to reduce importing fossil fuels with its erratic price fluctuations by providing a local supply of alternative and renewable energy, reduce greenhouse gas emissions, and cut the carbon dioxide emissions believing to cause the global warming. Therefore, the Department of Agriculture was assigned to promote the cultivation of biofuel feedstock and to balance the food and fuel requirements.
Increasing energy efficiency and developing sustainable energy sources are the key approaches to address the climate change. The biofuels emerged as an alternative to fossil fuels to promote as a cleaner source of energy. However, the biofuels productions have also triggered controversy for soaring the prices of food. Therefore, the key issue raises in this case is an increase in food prices. This means that an increase in the demand for feedstock to produce bioethanol would bring about a large increase in the prices of agricultural products (CBO, 2009). The World Bank has found that 75 percent of an increase in price was due to biofuels (Stefan, 2008). The biofuel crops would need thousands of hectares of arable land and hence will reduce cropping foods and cause the food shortages. The effects transforming crops into biofuels are catastrophic (FAO, 2008).
Two alternative options are recommended to ease an increase pressure on food prices. The Philippines’s government should firstly restricting on bioethanol process products exports, and secondly, encouraging further expansion of biofuel industry in the country.
Firstly, to ease an increasing pressure on food prices, the government should reduce necessary exported bioethanol processed products. This means that if there is a lack of bioethanol processed resources, it would push the prices up. The feedstock prices would increase and hence the food prices would also increase (Huanguang et al., 2008). The country requires adequate bioethanol resources to produce as planned and particularly meet the local market while the feedstock for biofuel production expanded dramatically in the country. Therefore, with limit of bioethanol resources, the government should consider carefully for exporting the bioethanol processed products such as sugarcane, sugar beets, corn and other crops to the foreign countries. In addition, the expansion of biofuel would lead to further pressure on food security. Hence, a careful and rigorous assessment of the effects of promoting biofuels in the Philippines should be conducted to alleviate the possible negative impacts of biofuel on food security and to ensure both food security and energy security in the country. However, the food price is an issue of a global nature which has complex causes and impacts at the international level (OECD, 2008). So, it is uncertain whether this option would ease the pressure on food prices and food security. Although this uncertainty, the government should advance its bioethanol industry in a sustainable way and focus more on the productivity which enhanced further investments.
Secondly, to secure the biofuel market and decrease in food prices, the government should encourage further expansions of biofuel industry which promotes alternative energy sources and support further economic growth in the country. The biofuels development is considered for the fastest growing market for agricultural products and would create great opportunity (Vineet et al., p.2). However, it could endanger the food security (Hartmut, 2008). The government has provided other incentives to encourage the biofuel expansion such as value added tax, production incentives, and direct subsidies. According to the Philippines’ plan for the expansion of bioethanol, it is expected that the annual production of 120 million barrels of bioethanol will be reached by 2013. This means that when the country could secure the supply of biofuels for its market, the food prices would accordingly go down. However, it also depends on the international market, particularly the United States (US), Brazil and other major countries which could also impact on the international agriculture prices. According to Prakash, the global biofuel production could expand from 50 to 250 billion litres by 2025. This expansion would offer remarkable opportunities for the poor (2007, p.2). In addition, the bioethanol program could provide the rural households an increase in their farming incomes. For instance, the rural households could provide their access to land and sell their agricultural products in the market as the bioethanol program is further expanded. Therefore, encouraging further expansions of biofuel development would provide better opportunity for its economic development growth, help to secure the food prices, and sustain the environments.
Although, both alternative options above have their own advantages, option two is recommended because it is better for addressing the key issue. The government should further expand the development of bioethanol program in order to improve its national energy security, stimulate agricultural development, and importantly decrease the food prices. The use of bioethanol as a fuel has significantly increased worldwide since its benefits, safety, and availability. It significantly reduces harmful exhaust emissions and carbon monoxide levels. The greater the number of biofuel suppliers, the lower the risk dependency (Neff, 1997). In addition, the biofuels could stimulate rural economic growth through providing employment and creating demand for goods and services (Vineet et al., 2008). Given these benefits, it is also important to contribute to the environmental sustainability and sustainable energy sources (IAASTD, 2008).
Finally, given to the benefits of bioethanol would protect the environment, improve the energy security, and enhance the agricultural productivity in the country; the expansion of the bioethanol programs should be enhanced.
The Biofuels Act in the Philippines was adopted in 2007. The main thrusts of the law intend to reduce importing fossil fuels with its erratic price fluctuations by providing a local supply of alternative and renewable energy, reduce greenhouse gas emissions, and cut the carbon dioxide emissions believing to cause the global warming. Therefore, the Department of Agriculture was assigned to promote the cultivation of biofuel feedstock and to balance the food and fuel requirements.
Increasing energy efficiency and developing sustainable energy sources are the key approaches to address the climate change. The biofuels emerged as an alternative to fossil fuels to promote as a cleaner source of energy. However, the biofuels productions have also triggered controversy for soaring the prices of food. Therefore, the key issue raises in this case is an increase in food prices. This means that an increase in the demand for feedstock to produce bioethanol would bring about a large increase in the prices of agricultural products (CBO, 2009). The World Bank has found that 75 percent of an increase in price was due to biofuels (Stefan, 2008). The biofuel crops would need thousands of hectares of arable land and hence will reduce cropping foods and cause the food shortages. The effects transforming crops into biofuels are catastrophic (FAO, 2008).
Two alternative options are recommended to ease an increase pressure on food prices. The Philippines’s government should firstly restricting on bioethanol process products exports, and secondly, encouraging further expansion of biofuel industry in the country.
Firstly, to ease an increasing pressure on food prices, the government should reduce necessary exported bioethanol processed products. This means that if there is a lack of bioethanol processed resources, it would push the prices up. The feedstock prices would increase and hence the food prices would also increase (Huanguang et al., 2008). The country requires adequate bioethanol resources to produce as planned and particularly meet the local market while the feedstock for biofuel production expanded dramatically in the country. Therefore, with limit of bioethanol resources, the government should consider carefully for exporting the bioethanol processed products such as sugarcane, sugar beets, corn and other crops to the foreign countries. In addition, the expansion of biofuel would lead to further pressure on food security. Hence, a careful and rigorous assessment of the effects of promoting biofuels in the Philippines should be conducted to alleviate the possible negative impacts of biofuel on food security and to ensure both food security and energy security in the country. However, the food price is an issue of a global nature which has complex causes and impacts at the international level (OECD, 2008). So, it is uncertain whether this option would ease the pressure on food prices and food security. Although this uncertainty, the government should advance its bioethanol industry in a sustainable way and focus more on the productivity which enhanced further investments.
Secondly, to secure the biofuel market and decrease in food prices, the government should encourage further expansions of biofuel industry which promotes alternative energy sources and support further economic growth in the country. The biofuels development is considered for the fastest growing market for agricultural products and would create great opportunity (Vineet et al., p.2). However, it could endanger the food security (Hartmut, 2008). The government has provided other incentives to encourage the biofuel expansion such as value added tax, production incentives, and direct subsidies. According to the Philippines’ plan for the expansion of bioethanol, it is expected that the annual production of 120 million barrels of bioethanol will be reached by 2013. This means that when the country could secure the supply of biofuels for its market, the food prices would accordingly go down. However, it also depends on the international market, particularly the United States (US), Brazil and other major countries which could also impact on the international agriculture prices. According to Prakash, the global biofuel production could expand from 50 to 250 billion litres by 2025. This expansion would offer remarkable opportunities for the poor (2007, p.2). In addition, the bioethanol program could provide the rural households an increase in their farming incomes. For instance, the rural households could provide their access to land and sell their agricultural products in the market as the bioethanol program is further expanded. Therefore, encouraging further expansions of biofuel development would provide better opportunity for its economic development growth, help to secure the food prices, and sustain the environments.
Although, both alternative options above have their own advantages, option two is recommended because it is better for addressing the key issue. The government should further expand the development of bioethanol program in order to improve its national energy security, stimulate agricultural development, and importantly decrease the food prices. The use of bioethanol as a fuel has significantly increased worldwide since its benefits, safety, and availability. It significantly reduces harmful exhaust emissions and carbon monoxide levels. The greater the number of biofuel suppliers, the lower the risk dependency (Neff, 1997). In addition, the biofuels could stimulate rural economic growth through providing employment and creating demand for goods and services (Vineet et al., 2008). Given these benefits, it is also important to contribute to the environmental sustainability and sustainable energy sources (IAASTD, 2008).
Finally, given to the benefits of bioethanol would protect the environment, improve the energy security, and enhance the agricultural productivity in the country; the expansion of the bioethanol programs should be enhanced.
(By Bong Angkeara)
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