Brazil says biofuel production not to blame for food prices

CEAT Kelani Holdings Managing Director Ravi Dadlani (right) and Lanka Ashok Leyland CEO Umesh Gautham exchange the OEM agreement

SAO PAULO, June 2, 2008 (AFP) – With its prodigious farm exports and its major industry making ethanol from sugarcane, Brazil is seeking to show that in the food versus biofuel debate at least in its case the two can co-exist.

President Luiz Inacio Lula da Silva has challenged critics who claim biofuel production is contributing to high food prices and demand, arguing the problem lies instead in poor agricultural and distribution models.

“It is not ethanol that is causing food prices to rise, because Brazil, which produces more biofuel also produces more food,” he has said.

That view has support among government analysts.

The food crisis “is a problem of wealth distribution, a political problem,” said Giselle Ferreira de Araujo, who works for the state National Council for Scientific and Technological Development.

Renato Maluf, the head of the government’s food safety agency, said the demand driving up food prices is largely coming from China, India and other emerging economies.

But the high price of gas, which has raised transportation costs, as well as poor harvests in some parts of the world, and “speculation on food products” were also to blame, he said.

The United States had helped trig

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