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  • International Development Funding. National and international development institutions can provide financial and technical support for small- scale biofuel initiatives for rural energy provision and poverty alleviation.

  • Technical and Materials Assistance. Governments, civil society, and others can provide assistance to small landholders in obtaining materials (energy crops seeds and seedlings), know-how, and market access.

  • Appropriate Fiscal Policies. Governments can implement policies that allow

for local approaches to be developed.

Government action to assure markets for biofuels and for energy crops (e.g. mandates, preferential purchasing, etc.) helps give producers the confidence to adopt new crops and crop management systems. In addition to providing markets for their products, ensuring fair prices for farmers is also essential to improving rural livelihoods.


Encouraging Sustainable Trade in Biofuels

For the dozens of nations that are just beginning to develop biofuel industries, many decisions will have to be made, including the type, scale, and orientation (i.e. for domestic consumption, for export, or both) of production. Policies will need to be designed appropriately based on domestic economic and resource situations, and with the rapid pace of biofuels development, they will need to be put in place soon. Decision makers will also need to factor in the impacts that the policies of other nations (e.g. the EU biofuels initiative) and international trade policies (e.g. continuing trade liberalization negotiations) will have on their own biofuel and biofuel feedstock markets. In general biofuels trade restrictions should be removed over time, respecting the fact the countries with nascent industries will want to protect them.

Integrated planning is necessary at the national level so that short-term or sectoral interests do not take precedence over strategic national priorities. For instance, market incentives at the microeconomic level might encourage biofuel exports. But when other factors—such as national employment needs, domestic energy and security needs, trade balance, food security and land use concerns, the condition of domestic transport and export infrastructure, and GHG reduction obligations—are taken into consideration, exports might not make sense at that point in time. In many nations where displacing a modest amount of petroleum could make a significant difference, production for domestic use should take precedence over export. Alternatively the value of biofuels as an export commodity to earn foreign exchange may be preferable in other instances. National leaders will need to weigh these factors for their countries.

Well-established markets such as the United States and the EU have enormous fuel needs and growing energy security concerns. Due to policy initiatives actively promoting the use of biofuels, markets in these countries are large enough to accommodate both domestic production and imports (and the more rapidly biofuel- compatible transport infrastructure is phased in, the faster their biofuels markets will

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