ROME -- World Bank President Robert Zoellick suggested today the United States "at a minimum" lift its tariff on Brazilian ethanol, which otherwise would be cheaper than U.S.-produced ethanol. But he added that the biofuels boom is a contributing factor, not the primary cause, of higher global food prices, and said he supports the new generation of cellulosic ethanol. "It would be a shame if [biofuels] became the dominant issue," said Zoellick, who previously served as U.S. trade representative. "We shouldn't be anti-biofuels." Zoellick made his comments in an interview with CongressDaily at the U.N. Food and Agriculture Organization conference on climate change, bioenergy and food. Many critics have charged that biofuels are behind the food price crisis, and the topic has dominated the conference. FAO Director General Jacques Diouf used the event to criticize corn-based ethanol, calling it "incomprehensible" that up to $12 billion in U.S. subsidies are used to divert 100 million tons of cereals from human consumption "mostly to satisfy a thirst for fuels for vehicles."
In remarks delivered at the conference today, however, Agriculture Secretary Schafer defended biofuels, saying they can "increase energy security, foster economic development, especially in rural areas, and reduce greenhouse gas emissions without weighing heavily on food prices." He added that the United States "is firmly committed to the sustainable production and use of biofuels both domestically and globally." For his part, Zoellick said the conference should focus on how to provide money for poor people affected by rising food prices, making seeds available to farmers quickly and ending export bans that developing countries have placed on rice and other commodities to avoid increases in domestic food prices and possible civil unrest in their own countries.
Brazilian President Luiz Inacio Lula da Silva defended his country's ethanol program, which is based on sugar rather than corn, but added that he is not in favor of corn-based ethanol. "Some people compare ethanol to cholesterol," he said. "There is good ethanol and bad ethanol. Good ethanol helps clean up the planet and is competitive. Bad ethanol comes with the fat of subsidies."Schafer said last week he was disappointed that Congress did not provide authority in the farm bill to purchase one quarter of U.S. food aid in other countries but said he considered a provision creating a $60 million pilot program for food aid overseas purchase a good step. The pilot program is part of the trade title not included in the parchment version of the farm bill President Bush vetoed. Schafer also emphasized that the Bush administration has committed $5 billion to food aid and agriculture in developing countries over the next two years and that the United States also believes in "the free flow of food and the safe technologies that produce that food."
This article appears in the June 7, 2008, edition of National Journal Daily PM Update.