The world’s romance with biofuel is over. Food prices are falling as farmers return to staple crops instead of competing with oil companies. And everyone’s blaming it on jatropha.

The collapse of the jatropha industry has been most spectacular in India. Originally seen as a wonder weed, jatropha was planted on almost one million hectares of mainly marginal land. Official policy promoted a vision for compulsory blending of biodiesel with the nation’s fuel supplies, and the Indian Railways confidently predicted that biodiesel from jatropha would supply half their needs in the future. The enthusiasm with which India embraced jatropha was almost evangelical.

But two ‘grey swans’ conspired to scupper this dream. Jatropha is a wild plant, adapting easily to land unsuitable for traditional agriculture. At harvest time, the yield of oil seeds proved wildly erratic, often determined by the micro conditions in each plantation. Even marginal land has cost inputs, and biodiesel production incurs its own costs. Poor harvests lead to real losses and bankrupt farmers.

The partially foreseen double-dip recession was the second ingredient completing this toxic pie. The Credit Crunch was duly followed by the Debt Disaster; as Eurozone troubles escalated, Dollar bonds tottered and the global economy took a massive second contracting breather. All of which sent oil prices tumbling, and made biofuel an unattractive proposition. New oil discoveries off the shores of Namibia, Mozambique and Tanzania pushed crude to new lows.

The real tragedy for India has been that impoverished rural communities saw jatropha as their beacon of hope – a new innovative industry that would lift them out of subsistence existence and enable them to participate in global energy markets. That hope has been dashed, and they are poorer than before, as their meagre investments have withered away. The jatropha plantations lie neglected and desolate, some slashed and burned, as their destitute former managers seek relief in the cities, and from government handouts.

“They promised us a new life, from Jatropha,” mutters a failed ‘biodiesel entrepreneur’. “Now they must help me feed my family!”