UN summit: Corn on table or in tank?

[June 05, 2008]  ROME (AP) -- Corn on your table or in your tank? The merits of increasing biofuel production in the middle of a crisis over skyrocketing food prices was being hotly debated at a United Nations summit, but the top U.S. delegate said Wednesday that consensus on the issue was possible.

U.S. Agriculture Secretary Ed Schafer said on the second day of the three-day gathering of world leaders, U.N. food agencies, development banks and business representatives that progress was being made on determining the role of biofuels in food price hikes.

"It looks as though consensus on this important issue is in reach," Schafer said in a statement.

He told reporters that he thought some "acceptable" language, apparently a compromise, on biofuels would be in the final summit document on Thursday.

"Not the U.S., but many countries are unhappy with the declaration," he said at a briefing, without identifying which ones. "I don't know the specific language on biofuels. We talked about the impact biofuel has on food prices, we think it is a factor but certainly not the largest contributing factor."

A draft of the final declaration, which was being discussed late into the night on Wednesday appeared to seek a balance between contrasting positions on biofuels that have driven much of the summit.

It said it was "essential" to address the "challenges and opportunities" posed by biofuels, adding that "in-depth studies are necessary to ensure that production and use of biofuels is sustainable."

The United States and Brazil, two growing biofuel-makers, differ over which food makes for better fuel -- corn, sugar, seed oil, plant matter are among the possibilities -- and few seem to agree on just how much the biofuel craze impacts growing world hunger.

U.N. Secretary-General Ban Ki-Moon at a summit news conference called for guidelines on biofuel production.

Most countries and international organizations meeting at the Rome-based U.N. Food and Agriculture Organization cite a combination of causes for the price hikes: rising energy costs, more demand for meat and dairy products from some booming developing countries, trade restrictions, speculation as well as the increased demand for biofuels.

"There is agreement that the international community needs to talk about it. Biofuels are not taking the food out of the mouths of people, but we need to make sure that balance is struck," said John Holmes, the U.N. humanitarian chief and coordinator of the U.N. task force on food price crisis.

Discussion of whether to scale back or push ahead with the introduction of biofuels -- used to reduce the use of petroleum-based products and believed to be less polluting -- and which crops are better suited to produce the fuel weighs on attempts to come up with a global strategy to solve the crisis.

Early in the summit, Brazil's President Luiz Inacio Lula da Silva praised his own country's long-standing approach of making ethanol from sugar cane and criticized corn-based ethanol, which is being subsidized in the United States.

The United States insist biofuels have a small, 2-3 percent impact on this year's price hikes, but other nations believe the effect is more serious when looking at single crops.

While biofuels have little or no impact on the price increases of rice and wheat, they contribute strongly to the hikes of maize and seed oil, which is used in Europe to make biodiesel, said Jonathan Lingham, an agriculture expert with the British delegation.

"If you are poor and you eat maize, then you have a problem," he said. "We need a more cautious approach. Biofuels are not the silver bullet we were hoping for."

Despite the debate on the extent of the impact of biofuel on food security, participants in the summit agree that it is a factor and measures must be taken, said Hafez Ghanem, FAO assistant director general.

"If you put three economists in a room you'll get four different theories on the role of biofuels, but we all agree that they have an effect," Ghanem said at a briefing for reporters after delegates took part in a roundatable discussion on the causes and solutions of the crisis.

"The world has enough resources and the right technology to produce enough crops to meet the demand for food and biofuel," he said.

Another big grain producer is Canada, which said Wednesday it is aiming to achieve a biofuel use goal that is the environmental equivalent of "taking 1 million cars off the road while 95 percent of Canadian cropland will continue to produce safe, healthy food."

[Associated Press; By ARIEL DAVID]

Associated Press writer Frances D'Emilio contributed to this report.

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