Brazilian President Luiz Inacio Lula da Silva says the poorest countries in the world could prosper in the biofuel industry, which produces fuel from crops such as corn and grain.

Speaking to a conference on biofuels in Brussels Thursday, Mr. da Silva said that lowering trade tariffs to stimulate trade with developing countries would help them to alleviate poverty.

European Union Trade Commissioner Peter Mandelson said earlier that Europe should be willing to import a large part of its biofuel resources if those supplies are cheaper and cleaner than EU-produced fuel.

However, the EU is also examining the potential environmental drawbacks of the industry.  External Relations Commissioner Benita Ferrero-Waldner said poorly managed production of the fuel can increase greenhouse gas emissions, which are blamed for climate change.

On Wednesday, the United Nations Food and Agriculture Organization, along with the Organization for Economic Cooperation and Development, issued a report saying that growing demand for biofuels will likely raise prices on farm commodities.  As a result, the cost of food is likely to rise, particularly in poorer countries.

Some information for this report was provided by AFP, AP and Reuters.