Ethanol Policy Divides Latin America

By Sara Miller LlanaDaniel Cancel | The Christian Science Monitor, April 2, 2007 | Go to article overview

Ethanol Policy Divides Latin America


Sara Miller LlanaDaniel Cancel, The Christian Science Monitor


Venezuelan President Hugo Chavez calls the boom in ethanol the equivalent of starving the poor "to feed automobiles."

Ethanol, which is derived from crops such as corn or sugar, is seen by some as a green alternative, a rising star on the path toward reducing independence on foreign petroleum. But it's not just Mr. Chavez who is questioning whether the benefits outweigh the unintended consequences.

Now poultry industry executives, who have seen the price of feedstock has gone up; Mexican consumers, facing a 60 percent jump in the cost of tortillas; and even environmentalists, who look at the amount of fertilizer that will be needed to grow extra crops, are wondering aloud whether ethanol will help or hurt Latin American economies.

The South American energy summit that concluded in Venezeula this week provided the latest platform for critics. Even though the debate has been cast as another issue in the long line of ideological battles aligning Chavez and Cuban leader Fidel Castro against the US, some analysts say that their point is larger than political: If the price for staple food items rises across the globe because of demand, Latin America will be one of the hardest hit regions.

"I think people worry that rich Americans are trying to fuel cars at the expense of hungry people in poorer countries," says Janet Larsen, director of research at the Earth Policy Institute in Washington. "This increased push for ethanol production could be an incredible foreign policy blunder."

What we are seeing now, she says, is the beginning of a very long debate. Chavez's comments came shortly after harsh op-eds penned by Mr. Castro who, in his first public statements since falling ill last July, resurfaced to call the US proposal "genocidal."

His words follow mass protests in Mexico, after the price of corn tortillas shot up in January.The South American Energy Summit at Margarita Island was the first meeting between Brazil's President Luiz Inacio Lula da Silva since Chavez lambasted the plan after Mr. Bush visited Brazil last month, when Bush and Lula signed a proposal to promote the industry in the region.

For this meeting, Chavez nuanced his position - saying he is not against ethanol production but against the US plan to use corn to produce it.

"We're not against biofuels," he said. "They are viable alternatives, as long as they don't negatively affect the lives of the inhabitants of the region."

For many analysts, it seemed a retraction of his earlier position that is likely to reduce friction - and ensuing divisions - with Brazil, says Rafael Quiros Corradi, an analyst in Caracas.

But it's more than just a political football. …

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