Mexico to encourage biodiesel production

MEXICO CITY (Reuters) - Mexico plans to encourage production of biodiesel from crops like beets, yucca root and sorghum after a new biofuel law comes into effect early next year, the country’s agriculture minister said on Tuesday.

“Mexico could develop biodiesel faster than ethanol,” said Agriculture Minister Alberto Cardenas at a news conference.

Ethanol, an alcohol used as an additive in gasoline to reduce emissions, is usually made from corn or sugar.

But competing with the United States, the world’s number one corn producer and Brazil, a leader in sugar-based ethanol will be a challenge for Mexico, where cane is expensive to produce and farmers grow less corn than the country consumes.

“We have to seek out other sources for biofuel to differentiate ourselves from Brazil and the U.S.,” said Cardenas.

The law, passed last week, offers unspecified support to farmers that grow crops for the production of any renewable fuel.

Cardenas said a biodiesel industry would help the country’s poorest farmers, and that none of the crops Mexico currently grows for food would be replaced with biofuel plants.

He did not say how much biofuel Mexico could produce.

Critics say biofuel production hurts the poor as increased demand for crops drives up food prices.

The Mexican government pressured corn flour producers in January to cap rising prices for tortillas, a staple corn pancake, amid street protests.

Reporting by Mica Rosenberg; Editing by Marguerita Choy