Peru’s president says ethanol creating serious food price increases; green lights ethanol project for Peru

In Peru, Peruvian president Alan Garcia said that Peru is a victim of the ethanol industry, which he said increased food prices. “It’s creating very serious problems for countries that have to import these products. We believe there are alternative energies that do not put the world’s food in danger,” said Garcia. Meanwhile, his government gave the green light to a Maple Energy ethanol project in the Peru.

Maple Energy said it intends to raise $20 million through a private placement to finance ethanol development and oil exploration projects in Peru. Proceeds from the financing, the company said, would be used to acquire an additional 3.1 percent of Aguaytia Energy and finance its proposed ethanol plant.

Peru has been a test site for the U.N. Food and Agriculture Organization’s decision-support tool to assist countries in planning their entry into biofuels production. The analytical framework allows government to assess biomass potential; biomass production costs; the economic bioenergy potential; macro-economic consequences; national and household-level impact and consequences on food security. The tool will be tested in Peru, Thailand and Tanzania – before it is is made available to the international community at large.

Top FAO official Jeff Tschirley, recently said “FAO strongly feels that food security and environmental considerations must be fully addressed before making investments or policy decisions, and we are actively working to ensure this happens. However, a moratorium that ignores the potential of biofuels to support rural development and assist the economies of developing countries would not, in our view, be a constructive approach to this topic.”

He said that the description of biofuels as a “crime against humanity” by Dr. Jean Ziegler, UN Special Rapporteur on The Right to Food, was regrettable.

In a recent report addressing the food vs. fuel debate, Informa Economics released a 20-year study exonerating ethanol for having a serous impact on food price rises.

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