Jatropha biofuels: UK investors sell controversial crop as 'green'

UK fund managers are selling investments in jatropha plantations as a wallet-swelling, planet-saving financial bonanza. But the reality for poor farmers is very different

A number of UK-based investment companies are marketing a controversial biofuel crop as an 'ethical investment' despite it being linked to conflicts over land, food security and growing hunger in developing countries, the Ecologist has learned.

Onyx World, BluSky Investments, Viceroy Invest and Sustain Investments have been criticised by environmental and anti-poverty campaigners for selling investments in jatropha because of increasing concerns over the crop's impact on poor communities.

Miracle fuel?

Jatropha, a bushy shrub which grows in Africa, Latin America and south-east Asia, is being touted as a 'miracle' biofuel because the plants' seeds contain a potentially valuable, non-edible, vegetable oil that can be used for biodiesel.

The investment companies are selling jatropha as the new 'green oil' and claim it has the potential to alleviate poverty and improve livelihoods in developing countries. One of the plants' biggest benefits, the companies claim, is that it thrives on low grade, marginal land, and in semi-arid areas with poor soils, thus not competing with food production.   

But, according to campaigners, the supposed benefits of jatropha are largely unproven, and the experiences of many farmers encouraged to plant the crop do not tally with the claims of the biofuel industry or its investors. Yields have fallen short of predictions, say farmers, and good agricultural land has been given over to jatropha, threatening food security. Promised incomes have also failed to materialise, it is claimed, because of poor demand for jatropha seeds.

Get rich and save the planet

Onyx World Ltd, based in Colchester, offers investors returns of up to 93 per cent annually if they buy into jatropha. The company's investment brochure, titled 'Money really does grow on trees', claims that jatropha benefits local communities by improving farming practices, stimulating local economies, preserving family units and allowing the use of marginal land.

The environment benefits, Onyx World claims, because jatropha is a carbon neutral fuel source, a replacement for fossil fuels, reduces global warming and does not displace food crops.

Sustain Investments and BluSky make similar claims. Viceroy Invest says investors will be 'helping to eradicate third world poverty and creating employment, whilst also saving the planet from greenhouse gases'.

Snake oil

The Ecologist's findings come as a new report by ActionAid links the expansion of industrial biofuels, derived from crops including jatropha, palm oil, soya and sugar cane, to rising food prices and increasing global hunger. 
 
Meredith Alexander, head of trade and corporates at ActionAid, told the Ecologist: 'ActionAid deals with the harsh realities of a billion people going hungry now and the threat that climate change will make matters even worse. Like snake oil salesmen of old, propagandists for jatropha oil have a list of miraculous claims a mile long, but no matter what they say, jatropha is not a solution to climate change and actually makes hunger worse.'

Friends of the Earth’s Kenneth Richter, said: 'The positive spin about jatropha made by investment companies doesn't marry up with the experiences of farmers growing the crop. This so-called biofuel wonder crop is failing farmers and failing the environment. Companies should stop investing in jatropha until they have properly assessed its social and environmental impact.'

Almuth Ernsting, from Biofuel Watch, said that the claims made by the investment companies were 'highly dubious' and conflicted with evidence collated by NGOs.

Displacing food crops

Although there is no suggestion the investment companies are directly involved in bad practice or wrongdoing, campaigners say the speedy and unregulated nature of the 'jatropha rush' raises doubts that that the crop is being grown in a sustainable or ethical manner.   

ActionAid says that in Tanzania the crop is being targeted at areas with good rainfall, fertile soils and well developed infrastructure – ideal locations for food cultivation – rather than marginal land.

In Senegal and Swaziland the group says evidence suggests the plant will only survive with irrigation systems, contradicting industry claims that jatropha grows well with limited water usage. A Friends of the Earth investigation in Swaziland raised similar concerns about jatropha's apparent ability to grow on land with poor soil and without regular watering.

Food security threatened

The Friends of the Earth study also highlighted allegations that farmers were encouraged to sign contracts they did not properly understand, and which couldn't be terminated for several years, locking the contractor into jatropha production regardless of the crop's productivity. 

Charities say food security in many parts of Africa is being compromised because land for food is being used for crops destined for biofuels, and that this is linked to local rises in food prices:
'I and the  community expected to increase our cash income and revenues by working on the plantation,' Mamadou Bah, a farmer from Senegal, told ActionAid researchers. 'Our food is insufficient because we gave away our land. We have to fight for our rights and find alternatives to fill the gap in food and livelihoods.'      

A similar story was uncovered in Ghana, where shea trees, traditionally used to make shea butter that is used in cosmetics and soaps and for cooking, have been destroyed to plant jatropha. 

'The shea nuts I am able to pick during the year help me to have my children in school, to buy cloth and also to supplement the household’s food needs when the harvest from my husband’s farm runs out,' Sanatu Yaw told researchers. 'But this year I could not get much because of the trees that have been cut. Now they have destroyed the trees so we have lost a good source of income forever, yet we have not been paid anything in compensation.'

Uprooting jatropha plants

In Assam and Megahalaya in north-eastern India, where farmers have been encouraged to grow jatropha on a contract basis, many claim not to be receiving an adequate income, or no income at all – largely because of poor yields and a lack of demand for seeds:   

'Until now we have had no income from the jatropha plantation,' farmer Parindra Gohain said. 'They told me it would be two years before we would have income, but it is already three years. People are a little down now because the whole project is already four years running and there is no income. I still hope that I will get profit otherwise I will pull up the plants.'

Raju Sona, another farmer said: 'No one will buy jatropha. People said if you have a plantation then surely you have a good market, but we didn’t see such good market. When I got the message that there was no market, I got discouraged....I felt very bad. I expected profit. I threw [the seeds] away. They were no use to me. I destroyed the plants because of lack of market. The thing is that we have land, but if I use it for jatropha and I don’t get good production after spending money, it will be a great loss for me.' 

The Indian government plans to cultivate jatropha on millions of hectares of land as part of its intensive drive to generate energy. Critics say efforts should be focussed on tackling the country's chronic hunger problem. 

Early claims misleading

Onyx World and Viceroy Invest are both agents for Carbon Credited Farming (CCF) Plc, a London-based company specialising in developing renewable fuel and energy sources.

Although its focus is currently on jatropha, CCF has global interests in genetics, forestry, fertiliser and pesticides. The company says it is currently in the process of securing 70 years of genetics for oil palm which will increase the yields from most Asian oil palm plantations.  

CCF states it is committed to best practices in its farming operations, engages in holistic agricultural techniques and permaculture, and is working to develop not-for-profit and charitable giving programmes.

Jeff Reeves, of CCF's global operations team, said that the company was aware of the criticisms of biofuels, including jatropha, and acknowledged that there have been problems associated with the crop in a number of regions, including India and several African nations.

He cited land evictions in India and people being forced to grow jatropha in Burma as particularly problematic. 

'In many cases it is government policy and people that are to blame, rather than jatropha itself,' he told the Ecologist. 'Well managed, jatropha and other biofuel crops can work, but there has been countries where [poor management] has meant this is not the case.'

Reeves said that misleading claims about jatropha, made following early trials and describing it as a 'wonderweed....  able to grow in deserts', were to blame for a lot of the hostility the crop is now facing.

He said he would examine some of the claims being made by investment companies offering jatropha cultivated by CCF.

Onyx World referred the Ecologist's enquiries to CCF. Viceroy Invest, Sustain Investments and BluSky declined to comment.

Some names have been changed. Andrew Wasley is a journalist with investigative agency Ecostorm

A study regarding the Tanzania Biofuel situation (PDF, 1,5 MB)