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Sunday, April 13, 2008

Lula Ignácio da Silva: Biofuels not the cause of increases in food prices

[BLOGGER'S NOTE: hmmm, does this guy really know what he is talking about?]

THE HAGUE, Netherlands (AP) -- Brazil's president insisted Thursday that crops used for ethanol are not responsible for driving up food prices, and said Haiti -- where food riots have erupted recently -- could benefit from a biofuel industry.


Brazilian leader Luiz Inacio Lula da Silva, left, visits Dutch Prime Minister Jan Peter Balkenende on Thursday.

Luiz Inacio Lula da Silva was speaking after meeting Dutch Prime Minister Jan Peter Balkenende at the start of a two-day state visit during which he hopes to boost Dutch investment in Brazil's biofuel industry.

Ministers from both countries were signing an agreement to intensify cooperation on biofuels Friday.

While biofuels produced from plants such as sugar cane are promoted as an environmentally friendly alternative to fossil fuels, they also have come under fire for elbowing out traditional food crops in developing countries because they are more profitable.

There also are fears that tracts of Brazil's rain forests could be felled to make way for biofuels or other crops because of the pressure to increase farmland.

The U.N. Food and Agricultural Organization says world food prices have gone up by 45 percent in the last nine months, and noted serious shortages of rice, wheat and corn. FAO Director-General Jacques Diouf said in India on Wednesday the demand for biofuels was one of several factors in the price surge.

Ethanol production "can be the hope for a development model for many countries, particularly in Africa, Latin America and Asia," Lula da Silva told reporters.

"Just look at Haiti today. We can see how many benefits we can take to Haiti if rich and emerging countries like Brazil can make partnerships to invest in third countries and produce [biofuels] there."

Brazil, which claims to be the world's main producer of ethanol from sugar cane, wants ethanol included in a U.S.-European Union plan within the World Trade Organization to cut import taxes on climate-friendly products such as solar panels and wind turbines.

For Brazil, which would reap billions of dollars in revenue from widespread ethanol liberalization, getting its fuel accepted as a cheap, eco-friendly alternative to fossil fuels has become a priority.

While business has boomed amid soaring oil prices and global warming concerns, the Latin American country says exports are still being held back by high U.S. and European tariffs. It notes that petroleum products, such as gasoline, face no tariffs.

Lula da Silva said food prices are rising because more of the world's poor are earning enough to buy more and better food, and because people are living longer.

"There is ... no relation with biofuels," he said.

Balkenende, however, said energy demand is influencing inflation.

He appealed for development of an international energy strategy to ensure the world can meet the soaring demand from booming markets such as China and India.

"We have to talk about biofuels; we have to talk about sustainability and we have to talk about renewables," he said.

Speaking earlier this year, Brazil's foreign minister also said there was no competition in his country between food and ethanol.

Sugar cane for ethanol amounts to less than 1 percent of Brazilian territory and 3 percent of its farmland, Foreign Minister Celso Amorim said in an AP interview. "So there is no problem."

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