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Chavez Threatens to Block U.S.-Brazil Ethanol Deal

The Venezuelan president says a biofuel boom would be "genocidal," spawning high food prices and world hunger.

The U.S. and Brazil are planning to cooperate to promote ethanol as a cleaner burning alternative to gasoline, but Venezuelan Hugo Chavez sees things a little differently.

"Substituting the consumption of gasoline with ethanol, produced from corn - it's true madness," the Venezuelan president said in a speech on Tuesday. Chavez and Fidel Castro have expressed concern that ethanol production will drive up food prices and cause hunger and poverty, with Chavez calling the Bush administration's renewable fuels plan "genocidal."

Now Chavez says he will take action to derail a U.S.-Brazil ethanol deal, "just as we overthrew the Free Trade Area of the Americas."

"We are working on an alternative proposal," he says, although he has not said what it would entail.

Although Chavez's intentions are ostensibly based on preventing biofuel production from driving up food prices and keeping the U.S. from stirring up conflict in Latin America, Venezuela's position as a major oil exporter could also inform his position. Chavez says that "Latin America should not worry about its energy supply, because all the oil and fuel it needs is here in Venezuela."

Although Brazil's president has already signed a memorandum of understanding with the U.S. on ethanol, Chavez insists that "we will never fight with Brazil. About this we are very clear: our enemy is the U.S. empire."

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