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World Looks to Ethanol to Ease Fossil Fuel Dependency

President Bush leaves this week for a five nation Latin American tour. In Brazil, he is expected to discuss ethanol development with President Luiz Inacio Lula da Silva. Mr. Bush is calling for major increases in the development of so called biofuels to meet growing demands for energy. Paul Sisco reports on what that may mean for the developing world.

In Asia, Europe and the United States, more and more food stuffs are being turned into fuel -- more corn and grains into ethanol, more palm oil and other plant materials into biodiesel. Scientists around the world are stepping up research aimed at turning grains, grasses and agricultural waste products into fuels.

But what does it mean for developing countries?

Lester Brown of the Earth Policy Institute says, "The effect of this enormous diversion of grain into our cars is going to raise food prices throughout the world."

Joachim von Braun of the International Food Policy Research Institute says food prices are rising and could go much higher. "The food prices for grains for breads may go up by 30 to 50 percent and the beans and the oil seeds may go up by 60 to 80 percent, price increases.... and we have about one and half billion people in the world who have one dollar to spend a day, and they spend more than half of that dollar on food, and if that food price goes up by 50 to 80 percent you don't need to calculate much to find out they will be starving, more people will go hungry."

Nevertheless, he says biofuel development can be a win-win for the developing world. "We have to invest heavily in new technology. In order to get more food from scarce land, which the world has, not just the U.S., the U.S. is part of the whole world, more food per drop of water, because water is more and more scarce and climate change makes it scarcer, and we need to draw on more land which we now don't use that can be sustainably used."

Brown adds, "I think there will be niches here and where we'll find opportunities for small farmers to grow oil seed crop for example to produce biodiesel, and make a profit doing it, but I don't think it's going to be the salvation of the developing world by any means because most of the developing world consists of food-importing countries now."

James Morris directs the United Nations World Food Program. He says there is room to develop biofuels and feed a hungry world. "There are millions of acres in Africa, Asia, that still can grow more food. There is more capacity in the United States and South America, and Canada to be more productive. I think we have to understand there is a price to be paid, and we need to be prepared to pay a fair price for energy independence and part of that price can not be the expense of a hungry world."

President Bush's discussions in Brazil on ethanol development coincides with a United Nations initiative meant to spur the production, distribution and the use of biofuels worldwide.