April 21, 2008 / 8:09 PM / 11 years ago

Peru's Garcia urges food, not biofuel, growth

LIMA, April 21 (Reuters) - A global increase in biofuel production is putting food out of reach for poor people in places like Peru, President Alan Garcia said on Monday, as he urged developed countries to grow more food.

Garcia, whose popularity has tanked to an all-time low on rising food prices, said Peru is a victim of ethanol and other biodiesels, which compete for land with food crops and have contributed to the rise in prices for wheat, corn and soy.

Over the last few months, food prices in Peru have surged faster than the Andean country’s general rate of inflation, which jumped 1.04 percent last month.

In the 12 months through March, inflation hit 5.5 percent.

“It’s creating very serious problems for countries that have to import these (food) products. We believe there are alternative energies that do not put the world’s food in danger,” said Garcia, echoing recent food-versus-fuel debates that question the social benefit of biofuels.

This month, Garcia’s approval rating sank to 26 percent — the lowest since he took office in 2006 — and 57 percent of those polled said rising prices were the main reason behind their disapproval.

In an effort to ease the crisis of rising food prices, Peru’s government has begun to hand out food to the poorest of the poor in Lima, the capital.

It has also slashed tariffs and raised interest rates this year to try to curb inflation, which rose 4 percent last year.

The central bank’s annual inflation target is 2 percent, plus or minus one percentage point.

The bank has said inflation should close near 3 percent this year, but many analysts say it will likely be higher. (Reporting by Maria Luisa Palomino; Writing by Dana Ford; Editing by Marguerita Choy)

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