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An institutional analysis of biofuel policies and their social implications: lessons from Brazil, India and Indonesia

This paper examines how developing countries have attempted to promote rural development through biofuel production, what social outcomes those strategies have created and what lessons can be learned. This is done by comparing the contexts of Brazil, India and Indonesia; three countries with important agricultural sectors that have put large-scale biofuel programmes in place. The analysis indicates a disparity between the social discourse and the adopted biofuel policy instruments. Benefits to the rural poor have been limited and far too often they have been left worse off after being incorporated into biofuel production chains under disadvantageous conditions. The paper argues that better outcomes depend on: building upon traditional livelihoods, rather than attempting to replace them; paying attention to the views, needs and interests of the rural poor; and inserting policy provisions that allow smallholders to climb up the value-chain, thus addressing inequality structures.