June 3 (Bloomberg) — Brazilian President Luiz Inacio Lula da Silva rejected criticism that ethanol production in Latin America's biggest nation has cut food output, blaming higher oil prices and farm subsidies for record food prices.
Analysts and environmentalists have blamed biofuels for part of the increase in costs and food shortages that have sparked riots in more than 30 countries. Diversion of land from food crops to biofuels has contributed 30 percent of the rise, the Washington-based International Food Policy Research has said.
“Biofuels are not the villain menacing food security in poor countries,'' Lula said today at a meeting in Rome of the United Nations Food and Agriculture Organization. “They can play an important role in the economic and social development of developing countries.''
Brazilian cultivation of sugar cane for ethanol accounts for 1 percent of Brazil's 340 million hectares of arable land, Lula said. Plantations haven't encroached on land used for food cultivation or on the Amazon rainforest, he said.
Ethanol from sugar cane gives off 8.3 times more energy than is needed to produce it, while for corn the ratio is 1.5 times, Lula said.
The U.S. imposes a 54-cent-a-gallon tariff on imports of biofuels, including sugar-based ethanol from Brazil.
Corn
“I am not in favor of producing ethanol from corn or other food crops,'' he said. “I doubt that anyone would go hungry to fill up their car's fuel tank.''
U.S. Agriculture Secretary Ed Schafer yesterday defended his government's policy of encouraging corn-based ethanol production.
Ethanol and other biofuels account for only 2 percent to 3 percent of food price inflation, and provide energy and environmental benefits, Schafer said.
The portion of the U.S. corn crop devoted to grain-derived ethanol will rise to 33 percent from 23 percent last year, according to the U.S. Department of Agriculture. Most of the crop is used for animal feed.
Two of the main causes of the surge in food prices are record oil prices and “absurdly protectionist farm policies in rich countries,'' Lula said in his address.
“Subsidies create dependency, break down entire production systems and provoke hunger and poverty. It is high time to do away with them,'' Lula said. “It offends me to see fingers pointed against clean biofuels — fingers tainted with oil and coal.''
