Ethanol was selling for 30 cents less a gallon than gasoline this month in the Chicago wholesale market, even before refiners deducted the federal tax subsidy. Drivers in parts of Minnesota were paying $1.59 for a gallon of E85, compared with $1.99 for regular gasoline.

"If this doesn't scream that we need something more to make the oil companies buy this product, I don't know what does," said Monte Shaw, spokesman for the Renewable Fuels Association.

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A provision in the Senate energy bill requires U.S. refiners and importers to double use of ethanol and other agriculture-derived fuels by 2012. It is supported by farm-state senators, consumer groups, several labor unions and environmental organizations. But the American Petroleum Institute, representing major oil companies, is fighting to keep it out of the final bill.

The United States imposes a stiff tariff on imported ethanol. But over the past 12 months, 160 million gallons of the Brazilian product still entered the country. The U.S. agribusiness giant Cargill Inc., the third-largest U.S. ethanol refiner, announced plans last year to refine Brazilian ethanol in El Salvador and export it to the United States duty-free under provisions of the Caribbean Basin Initiative.

The tariff is a sore point with Rodrigues, Brazil's agriculture minister. In 1948, his father acquired a bankrupt coffee plantation not far from the Sao Martinho sugar refinery, about a three-hour drive from Sao Paulo. Now he grows sugar cane on 7 square miles of rolling countryside.

"If the U.S. and Brazil would open their markets, they will contribute to democracy and peace," he told a group of visitors to his farm last month.

CONTINUED : 'No country can beat us'

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