Biotech execs say biofuels no threat to food supply

By Mark Weinraub

CHICAGO (Reuters) - New technologies can boost production of environment-friendly biofuels without threatening the world's food supplies, industry leaders said at a trade conference on Monday.

The biofuels industry has been demonized by higher food prices, the biotech industry executives said in interviews on the sidelines of the fifth annual World Congress on Industrial Biotechnology and Bioprocessing.

"You have to look at what all the factors are that go into rising food prices," said Steve Fabijanski, president and chief executive of Agrisoma Biosciences Inc, a Canadian company that engineers oilseeds with oil content that is tailored for biodiesel manufacturers.

Commodity costs are only one component of higher prices at the grocery store. Other factors, such as soaring crude oil prices and fertilizer costs that cut into farmers' profits, also contribute.

Additionally, growing worldwide demand for meat could cause some food shortages if higher percentages of corn, wheat and soy are used to feed livestock.

Agrisoma's crops, which are specifically tailored for biodiesel refiners, also produce an oil byproduct that can be used as animal feed, Fabijanski said.

GROWING BACKLASH

There has been growing criticism against government mandates on the use of corn to make ethanol because of the resultant rise in food prices.

The U.S. government has projected that nearly 25 percent of the U.S. corn crop will be used for ethanol this year, up from 20 percent last year and roughly up 14 percent two years ago.

Texas Gov. Rick Perry last week asked the U.S. government to cut "skyrocketing" food prices by waiving half of the renewable fuel standard for ethanol made from grain.

In the Midwest -- the so-called Corn Belt of the United States -- Missouri is considering rolling back a mandate supporting ethanol production amid growing outrage over rising prices for food and livestock feed.

"They missed the fact that it has been biotechnology that has expanded the productivity of farmers by 30 percent," said James Greenwood, president and chief of executive of the Biotechnology Industry Organization.

Developments in cellulose technology, which produces ethanol from non-food sources, are ready to be used in refining plants now, said Tjerk de Ruiter, chief executive officer of Genencor.

Genencor, a unit of Denmark's Danisco A/S (DCO.CO), is developing a system that uses enzymes to break down cellulosic materials in the production of biofuels. But Genencor's process, which can be used on leftovers of agricultural products such as corn, still needs to be tested on a large scale to see if it is profitable.

"It needs to be produced in plants (that can process) up to 1 million gallons, de Ruiter said. "That will truly tell us what the efficiencies are."

(Reporting by Mark Weinraub; Editing by Marguerita Choy)