28 February 2013

Nigeria: FAO - Small Farmers Sidelined in Biofuel Schemes

A new report released by the United Nations Food and Agriculture Organisation (FAO) has revealed that current biofuel certification schemes are making it difficult for smallholder farmers to participate in export markets.

The detailed report also advocated for a change in the way these schemes are currently managed. Nigeria is presently seeking ways to enhance the productivity of smallholder farmers in the country through agric loans and rural mobile telephony.

"As structured, these schemes would tend to favour big players and provide incentives for scaling up production to absorb certification costs," noted the report, entitled 'Biofuels and the Sustainability Challenge', which was produced by the FAO.

The schemes are a way to certify that biofuels used by companies importing or exporting this type of energy source are produced in a sustainable way without destroying forests and other ecosystems. Certification is also supposed to improve businesses' efficiency, and increase their transparency as well as their awareness of problems in the supply chain.

However, the report found that current certification schemes might exclude small farmers from achieving certification because they are mainly designed for large-scale agro-businesses. The schemes are also voluntary and for the most part are privately-operated, requiring costs and capacities that many smallholders lack.

The schemes can also hinder trade and reduce access to markets for developing countries in particular, the report says. For example, while it is easy for producers in industrialised countries to comply with the demand to provide education opportunities to employed farmers, it could be much more difficult for small-scale producers in developing countries.

Similarly, big companies keep financial records needed for audits while smallholders tend to keep information needed for estimations of greenhouse gas emissions in their head. As a result, many smallholders are not able to obtain certifications.

"Many developing countries express concern that certification schemes can become indirect trade barriers when not managed properly," the report said.

It suggested that to increase certification among small businesses, governments and international organisations in consumer and producer countries need to establish mechanisms that create "an enabling environment."

"Such mechanisms could include national legislation, public procurement policies, tax incentives and tax relief and start-up grants. Financial institutions also have an important role to play to support and enable schemes," the report said.

Local inspectors would also help create this environment by examining on-site conditions, thus lowering the costs for small producers.

While beneficial for the environment, certification schemes must also ensure that they have a positive impact for the economy by ensuring market access and decent wages for workers, the report concluded.

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