Government wants to relax biofuels ban

Government seeks to relax maize biofuels ban  
October 11, 2010

By Asha Speckman (BusinessReport)

The government is in talks with the Competition Commission to relax a policy that forbids farmers from selling surplus maize crops for biofuels production.

The government wanted farmers to be allowed to pool their maize and sell it in international markets, Minister of Agriculture, Forestry and Fisheries Tina Joemat-Pettersson said at the conclusion of the annual Agri SA congress over the weekend.

Joemat-Pettersson said that the agricultural industry was burdened with surplus maize in excess of 3 million tons, which had driven down grain prices and threatened job security in the sector. She said her department had assisted in lobbying the Minister of Trade and Industry, Rob Davies, and the Minister of Economic Development, Ebrahim Patel.

"The softening of the approach of the Competition Commission towards the maize industry is an indication of the fact that we have presented a solid argument for the pooling of maize. The industry is not on its own. We need to do everything as government to assist with moving maize. We could have shrugged our shoulders.

"I support the idea that food crops should not be used for biofuels. However, we are now faced with a situation where we have a surplus of maize. It now becomes necessary for us as a country to reposition our decision," she said.

Joemat-Pettersson said her department was also arguing for a change of South Africa's biofuels strategy.

"It needs to be modified to the current reality. We could make the argument for future use of maize for biofuel and future use of sugar for ethanol."

She said this matter would be brought before Dipuo Peters, the Minister of Energy, as soon as possible. "It isn't an instant solution. It's not going to happen within this year. It would require revision of the biofuels strategy."

The DA said it regarded this reconsideration as a victory. The DA's David Ross, a member of parliament and the deputy spokesman for energy, said in a statement that Joemat-Pettersson was to be "commended for putting aside party differences" and adopting proposals the DA had mooted last month.

The party, together with Grain SA, would meet the Department of Energy on October 12 to "look at the nuts and bolts of bringing the ban to an end", Ross said.

Johan Pienaar, the deputy executive director of Agri SA, said that in addition to maize concerns, the organisation would approach the Department of Trade and Industry to review the grain import policy. "We see the production of wheat declining because an import tariff is not in place. We will take this up further with the department in collaboration with the minister."

Joemat-Pettersson said her department was also engaging banks to be sympathetic to the debt situation of farmers, particularly maize farmers while also searching for appropriate vehicles, nationally and internationally, for developmental finance for smallholder and emerging farmers. Agri SA's three-day congress, which closed at the weekend, |focused on land reform, social and labour issues and competitiveness.

Pienaar said among the resolutions made at the congress was one to lobby for implementation of an import tariff on wheat, the absence of which was the cause for declining local production of wheat.

The forum is also developing its own code of conduct with regard to labour issues. This is in the process of being finalised and will be subjected to legal input.