Discussing the outcome of a meeting of grain industry participants, Lemmer said that if a grain surplus was produced this year, the Cabinet might reconsider the appeal of Grain South Africa to include maize as a biofuels feedstock.
The meeting served as a forum for information to be freely exchanged and give representatives a better understanding of the unin-tentional consequences of bio-fuels strategy decisions.
Lemmer said that informing policymakers about develop-ments and research in the industry was essential for mak- ing a decision that is economi-cally beneficial to South Africa.
The meeting was attended by representatives of the Pre-sidency, the Cosatu federation, the Food and Allied Workers Union (Fawu), the Free State provincial government, and Grain South Africa.
Government, Cosatu and the Free State provincial government do not support the use of grain as a biofuels crop. Their concern is that food availability and affordability will be affected by the use of some of the grain stock as a fuel feedstock.
Fawu said that its concern is the affordability of grain-based foods, as the price of grain is listed on the future pricing system. Its concern is that the South African Futures Exchange listed grain price will increase if government lists grain as a biofuel feedcrop, as the per-ceived market demand will increase.
A further concern of Fawu is that a market for grain as a biofuel feedstock would affect the amount of grain stored in silos, which serves as a safety net in the case of crop failure. The union said that it would need policies and assurances to be in place to ensure that food needs would always be fully catered for before fuel production.
Grain South Africa said that it understands this concern and that nine-million tons of grain would need to be set aside each year for consumption. It suggested that this would be possible if grain production is expanded to previous levels, citing evidence that South African grain production was lowered through price maintenance measures and not as a response to shrinking market demand.
It said that this expansion is possible if two-million hect- ares of unused com-mercial production land is used together with another two-million hectares of under-developed land. It added that food security would improve because of the increased grain supply an expanded grain market would provide.
Fawu expressed concern about future climatic condi-tions supporting such an expansion in grain production and suggested sorghum as a prefer-able alternative to grain as it has a lower risk of crop failure if there is not sufficient rainfall.
Grain South Africa felt that free market principles should promote the development of such a sorghum industry. It felt that considering sorghum as an alternative biofuel feedcrop might lessen any risk to food security.
Cosatu concluded that it was open to further discussion on this issue and felt that it had a better understanding of grain producers’ concerns.