SAN FRANCISCO (MarketWatch) -- An increasingly bitter public debate over the role that corn-based ethanol has played in driving up food prices is pitting some of the nation's biggest food manufacturers against each other, with hefty U.S. subsidies and mounting commodity costs at stake.

In the past week, meat and poultry producer Tyson Foods Inc. TSN, -1.33% and Pilgrim's Pride Corp. PPC, -1.79% , the largest U.S. chicken producer, have lambasted a national standard requiring a certain portion of the nation's transportation fuel come from renewable fuels. They say the standard, which has driven up demand for corn used in ethanol, is the reason why food prices have shot up globally.

Archer Daniels Midland Co. ADM, -1.11% , the nation's largest ethanol manufacturer, and smaller Pacific Ethanol Inc. PEIX, +18.55% have defended the gasoline alternative, saying critics are grossly overstating the link between ethanol demand and higher food prices.

"The debate has left the realm of academia and moved into the realm of rough-and-tumble national discussion," said Mark McMinimy, a biofuels analyst at the Stanford Group, a brokerage and wealth manager that follows public policy issues.

"There's a search to find out who's to blame for higher food prices," he added.

Food inflation scapegoat

At issue is the Renewable Fuel Standard, a mandate to increase the volume of renewable fuels blended into gasoline to 7.5 billion gallons by 2012. It was created by 2005 U.S. energy legislation and expanded in last year's energy bill. Blenders of ethanol also get a 51-cent tax credit for every gallon of ethanol they blend.

Most commodities analysts agree that these requirements and financial incentives are one reason farmers planted more corn last year than they had in over six decades. They say ethanol has indeed played a role pushing up corn prices to record highs above $6 a bushel this year.

But most analysts, including senior officials at the U.S. Department of Agriculture, also cite a variety of factors for the run-up in corn and other grains -- including the high price of petroleum, a weak dollar that makes dollar-denominated commodities more pricey, droughts and increasing demand from emerging markets countries for meat and poultry.

Just over two weeks ago, Texas A&M University provided yet more fuel for debate with a study that found higher energy costs, not corn prices, are largely to blame for changes in the agriculture industry.

"This research supports the hypothesis that corn prices have had little to do with rising food costs," it said.

Consternation over higher global food prices reached a fever pitch earlier this month at the World Bank and G7 meetings, with senior officials from some developing nations blaming the United States for supporting biofuels at the expense of the world's poor. Rice prices have gained about 50% in the past year, corn futures have vaulted over 60% and soybean contracts have surged a little less than 80%.

'Misguided'

Some of ethanol's biggest advocates will make their case on Wednesday. The heads of the National Farmers Union, the National Corn Growers Association and the Renewable Fuels Association plan to hold an afternoon press conference in Washington, D.C. to "present the facts" on food price increases.

For Tyson CEO Richard Bond, those facts can be summed up in three words: higher feed costs. Tyson said Monday it anticipates the costs of soybean and corn costs will increase $600 million this year. Since 2006, its outlays on these grains have doubled.

Tyson is raising prices, but not fast enough to keep up with higher input costs, and "it's going to get much worse if we continue down this path of diverting corn to ethanol production," said Bond in a conference call to discuss fiscal second-quarter earnings Monday.

"Congress must put an end to our misguided ethanol policy now," he said.

But Patricia Woertz, the CEO of Archer Daniels Midland, on Tuesday called the attack on biofuels "misguided" and blamed surging food prices on a tight energy supply. See full story

"Retreat from biofuels is just an empty gesture," she said. "That won't fill anybody's stomach and won't fill anybody's gas tanks."

Texas' governor, meanwhile, is trying to get the Environmental Protection Agency to grant the state a partial waiver from complying with the mandate to combine a certain portion of transportation fuel with ethanol. The state is also arguing that the Renewable Fuels Standard is responsible for higher food and feed prices.

Sen. Kay Bailey Hutchison, R-Texas, is getting ready to release a letter signed by at least 20 senators urging the EPA to issue regulations for states to apply for waivers from the ethanol mandate, said Hutchinson spokesman Matt Mackowiak.

Those waivers may be tough to grant, said Stanford Group's McMinimy. Under the 2005 legislation, the EPA, in consultation with the Agriculture Department and Energy Department, can allow states to reduce their production of renewable fuels if they can prove implementing the requirement "would severely harm the economy or environment" or if there is an inadequate domestic supply.

"It doesn't sound like something to be taken lightly," McMinimy said.