Experience with Jatropha in Peru and Honduras CFC/DED pilot project Production of vegetable oils as fuel in replacement of diesel for public transport.

Experience with Jatropha in Peru and Honduras

CFC/DED pilot project “Production of vegetable oils as fuel in replacement of diesel for public transport in Peru and Honduras”

Peter ThoenesFAO - Trade and Markets Division

International Consultation on Pro-poor Jatropha DevelopmentIFAD, Rome, 10-11 April 2008

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1. Project overview2. Key features3. First findings & main challenges

agronomic/technical economic social institutional

4. Conclusions

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1. Project overviewsmall-scale pilot project on the cultivation of jatropha

and rapeseed and the direct utilization of their oils as fuel for local transportation

primary objective: to test technical & economic viability and suitability for smallholder farmers living in marginal areas

budget & funding sources: total cost USD 3.3 million USD 1.7 mill grant Common Fund for

Commodities (CFC) and Government of the Netherlands

USD 1.6 mill counterpart contributions (in kind and cash)

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Project overview (cont’d)

implementing agencies: Deutscher Entwicklungsdienst (DED) national governments, farmers (associations),

entrepreneurs, national research institutes

duration: 3 years (April 2007 – March 2010)

location: Peru (costa, sierra, selva), Honduras

project supervisory body: FAO (IGGOOF)

52. Key features (jatropha

component)

target groups: associations of small, resource-poor farmers working

in marginal areas, distant from main markets small entrepreneurs (processors, bus owners)

operating in the same areas

focus on: small scale and local resources & markets: local

seed crushers, local mini-bus companies, on-site adaptation of bus engines

.... as opposed to large-scale plantations and processing, full mechanization, transportation to distant markets, industrial refining into biodiesel, external investors, export orientation

full compatibility with existing, local farming systems

no direct competition with foodcrops for land simple, easy-to-procure technology (cultivation,

processing)

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Key features (cont’d)

short commodity chain - entire chain from the primary product to the end user

limited number of actors close-by markets local value addition local employment & income

ingeneration reduced dependence on external markets/prices

public-private partnerships - close interaction between

farmer associations/cooperatives small/medium-sized enterprises (SMEs) researchers and extension workers local governments private investors

73. First findings & main challenges

a) agronomic/technicalb) socialc) economicd) institutional

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a) agronomic/technical

first findings : high adaptability & good performance in different

agro-ecological zones grows under marginal/extreme conditions (soil

quality, rainfall) ... ... suitable for otherwise uncultivated or underutilized land

suitable for direct planting (seeds, cuttings) planting density up to 10 000 plants/ha in arid zones: temporary drip irrigation (small-scale;

simple & low cost; resource efficient) yield estimates (using mix of local

landraces/ecotypes): promising, but wide range - depending on seed material

minimum 6-7 t/ha average 9 t/ha most performant 12 t/ha (= 4t oil)

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agronomic/technical (cont’d) very responsive to improved cultivation methods

in particular pruning mulching; bees-assisted pollination; etc.

performs well without chemical fertilizer, pesticides, herbicides

good natural pest resistence (once plant is established)

highly suitable for inter-cropping (variety of staple and cash crops)

regular labour requirements: weed control manual, year-round harvesting post-harvest treatment (depulping)

oil fully suitable as fuel in modified diesel engines

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agronomic/technical (cont’d)

four main challenges :1. trial & error approach, experimental nature ...

need for: NARS driven, systematic on-station/on-farm research networking and exchange between NARS

2. seed shortage (local & improved varieties) ... need for: (i) systematic, integrated seed selection programs,

(ii) identification of traits of economic importance, (iii) breeding and genetic improvement

farmer-managed revolving seed funds national and regional genebanks (general access; safe

exchange; public-private financing; partial cost-recovery) commercial production & distribution of improved seed

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agronomic/technical (cont’d)

3. farmer training in cultivation practices ... need for: collaboration between NARS, national extension

services, local NGO’s

4. labour-saving technological innovations (depending on scale of operations) improved weed control uniform flowering/fruiting machine harvest mechanical depulping

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b) socialfirst findings: farmers are responsive, stimulated & committed compatible with existing farming systems, labour allocation,

etc. farmers associations are not new value of land is reported to have increased in project areasthree main challenges: 1. viability & sustainability of farmer associations to be

proven 2. limited management and commercial skills

provide training 3. farm-labour bottlenecks (depending on size of operations)

closely monitor farm-labour use availability of off-farm labour gradual mechanization

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c) economicfirst findings: (tentative) readily available market ... current demand by far

exceeding supply ! interested, motivated entrepreneurs positive economic returns confirmed for key actors of the

commodity chain: farmers, processors, bus owners based on price assumptions: 150.- USD/t seed and 700.-

USD/t oil including lending (by farmers, processors) and own

investment (by bus owners)main challenges:1. critical role of yield levels (7-12 t/ha) 2. long spell until jatropha reaches full maturity 3. need to guarantee constant supply flow and homogenous

quality4. contractual arrangements to be tested5. access to credit, loan guarantees6. potential competition from other biofuels (... role of gov.

policies!)7. sensitive to price developments of crude oils

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d) institutional

first findings: limited direct interaction with governments weak formal linkages with NARS/extension systems (as

to be expected with pilot project ...) increasing awareness among policy makers in Peru,

Honduras and elsewhere rising interest from NGOs; parallel activities and

exchanges increasing interest from donor community & media ... more dissemination/sensitization work is plannedmain challenges:1. mobilization of government support to NARS & public

extension systems 2. creation of an enabling environment -- call on

governments, donor community, CGIAR-system, others: .../...

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institutional (cont’d)a) action at national level

stimulate private-public collaboration in research (... how?)

regulate seed certification, control and marketing review of land use policies strengthen rural credit (favourable rate, loan guarantees) regulation of domestic fuel market:

adapt biofuel norms & ensure quality control; provide tax incentives regulate fuel distribution and sale; control pricing coherent national energy policy

b) international input policy advice and technical assistance stimulate international cooperation in research on

jatropha facilitate germplasm exchange and seed trade between

countries

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4. Conclusions first promising findings (technical, economic viability) ...

... but results need to be confirmed sound developmental approach (social impact &

resource utilization) considerable potential for replicability scope for expansion into other local uses (rural

electrification in remote areas) need for increased external/international assistance &

coordination room for NGOs key outstanding challenges:

agricultural research seed supply sensitization of policy makers stimulation of public-private partnerships

17Thank you for your attention ... on behalf of the entire project team !

CONTACT:

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