VZCZCXYZ0015
RR RUEHWEB

DE RUEHLP #2030 2052314
ZNR UUUUU ZZH
R 242314Z JUL 07
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC 4442
INFO RUEHAC/AMEMBASSY ASUNCION 6952
RUEHBO/AMEMBASSY BOGOTA 4306
RUEHBR/AMEMBASSY BRASILIA 8192
RUEHBU/AMEMBASSY BUENOS AIRES 5436
RUEHCV/AMEMBASSY CARACAS 2663
RUEHMD/AMEMBASSY MADRID 3549
RUEHPE/AMEMBASSY LIMA 2838
RUEHMN/AMEMBASSY MONTEVIDEO 4742
RUEHQT/AMEMBASSY QUITO 5297
RUEHSG/AMEMBASSY SANTIAGO 9904
RUMIAAA/USCINCSO MIAMI FL
RUEHUB/USINT HAVANA 0430
RHEHNSC/NSC WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL

UNCLAS LA PAZ 002030 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL EAGR ECON BL BR
SUBJECT: EVO MORALES' WAR ON BIOFUELS 
 
 
¶1.  (U) Recent food shortages, increased food prices, and 
rising inflation in Bolivia have prompted President Evo 
Morales to strike out verbally at biofuels.  In recent weeks, 
President Morales' anti-biofuel statements have become 
heated, echoing those of his political allies Fidel Castro 
and Hugo Chavez. These comments have also placed President 
Morales at odds with President Lula de Silva of Brasil, who 
is a defender of biofuels.  Other GOB officials have added 
additional accusations against biofuels.  The Minister of 
Planning announced July 24 that Bolivia would import more 
food and attributed food shortages to three factors:  the 
"international tendency" to use food products for biofuels, 
climate change, and Bolivia's historic lack of 
self-sufficiency in food.  (Note:  GOB officials have blamed 
global warming for other domestic problems, including the 
flooding of 2006, when President Morales linked the flooding 
to global climate change and U.S. energy policies. End note.) 
 
¶2.  (U) In recent public statements, President Morales 
alleged rice shortages in Bolivia are linked to use of rice 
for biofuels, stating:  "rice traders informed us that 
Brazilian entrepreneurs are in Santa Cruz to collect all rice 
production...in order to produce biodiesel...which will 
create rice shortages." (Note: rice is not used in biofuel 
production.  End note.)  The president of the Agricultural 
Chamber of the East (CAO) Mauricio Roca declared that 
Bolivian rice production is sufficient for the domestic 
market. Despite this reassurance, President Morales announced 
that all Bolivian small farmers (campesinos) should sow an 
additional 1.5 hectares of rice, to supplement the internal 
market and for family use.  President Morales has also warned 
of sugar scarcities, although the Bolivian Institute for 
External Trade, a private organization, ruled out a possible 
sugar shortage, saying that in fact there is a surplus of 
150,000 tons this year, higher than most years: Gary 
Rodriguez, director of the Institute, lamented that "they are 
giving him (Morales) such misinformation." 
 
¶3.  (SBU) President Morales has blamed biofuels for the 
increase in domestic food prices (he has also, somewhat 
muddle-headedly, stated that there is no inflation in 
Bolivia, just rising prices.)  Bread-makers in Bolivia 
recently protested for the right to raise their prices, and 
the GOB announced that it would begin subsidizing the 
importation of wheat.  On July 22, President Morales charged 
that the USG no longer provides wheat donations to Bolivia, 
stating: "In Bolivia since 2005, there are no United States 
or Canadian donations (of wheat). Why are there no donations 
of wheat? They are not producing wheat, because wheat cannot 
be used for biofuels: they set aside fields for corn or for 
sugar cane which go to biofuel (production)."  (Note:  In 
fact, U.S. wheat donations continue under the PL-480 
program.)  Commenting on the increase in prices, President 
Morales said, "There is another external factor which I 
really fear and all Bolivians must prepare to confront: the 
so-called biodiesel or biofuel."  President Morales went on 
to add that, "It is not possible that our products be used 
for American scrap instead of for human beings." 
 
¶4.  (SBU) Comment:  President Morales' attacks on the 
free-market system are bearing bitter fruit: inflation, 
higher food prices, and shortages of gasoline and liquefied 
natural gas.  It appears his advisors, and the President 
himself, would prefer to blame external factors rather than 
bear the blame themselves, and biofuels make a convenient 
target.  We expect President Morales to continue to make hay 
out of the biofuels issue and to blame the U.S. and its 
"policies that create food shortages" in Bolivia and beyond. 
End comment. 
GOLDBERG