Brazil, Indonesia sign biofuel agreement: Report

Brazil and Indonesia Thursday signed a biofuels agreement that will open the way for the Asian nation to start producing ethanol, Brazil's Agriculture Ministry said.

The agreement for Brazil to provide Indonesia with technical help to produce ethanol from sugarcane was signed in Jakarta by Indonesian Agriculture Minister Anton Apriyantono and his Brazilian counterpart, Luis Carlos Guedes, a ministry statement said as quoted by AP.

Indonesia is trying to reduce dependancy on oil while revitalizing its agricultural sector. In addition to making ethanol from sugarcane, the Asian nation also wants to produce it from manioc.

The statement said Indonesia has set aside 2.2 million hectares (5.4 million acres) of land for the two crops, has earmarked US$1.42 billion (euro1.07 billion) to subsidize local farmers and has signed agreements with Indonesian and foreign companies that will pump another US$12.4 billion (euro9.38 million) into the sector.

Brazil, the planet's No. 2 producer of ethanol after the United States produces some 16.7 million liters (4.41 gallons) of ethanol a year, and hopes to increase that figure to 23.3 million liters (6.16 gallons) in four years. (*)