Increasing use of gasohol will soon put the world's automobile owners in direct competition with the poor and hungry for use of limited grain supplies, Worldwatch said yesterday.

In one of its regular papers on issues, the foundation-backed independent research organization predicted that farmers will have a choice of growing crops for food or for fuel. "They are likely to produce whichever is more profitable," the study said.

Lester R. Brown, Worldwatch president and author of the report, said that with dwindling global stocks of petroleum, demand for alcohol fuel is just about limitless.

Although alcohol can be distilled from any carbon -- including wood chips, cornstalks, paper or garbage as well as grains -- the most advanced, economical and efficient technologies use sugar-based crops including cane, sorghum and manioc or casava root, Brown wrote.

In Brazil, where the government has sworn to be self-sufficient in automobile fuel before the year 2000 through alcohol from sugar cane, half the current cropland will have to be used. Although the government insists that fuel crops will be grown only on previously unused land, there will be competition for capital, water, fertilizer, roads, credit and technical and managerial talent, Brown noted.

"The assumption that energy crops will not compete with food crops may be both naive and risky," he said.

President Carter's proposal to produce 2 billion gallons of ethanol (grain alcohol) by 1985 will require 800 million bushels of corn or its equivalent, cutting U.S. grain exports by as much as 20 percent from 1980 levels, Brown continued.

That will drastically reduce the amount of grain available for food in other countries, just when world food production appears to be entering a decline. World population continues to grow at a steady 70 persons per year and food prices will inevitably rise as a result, Brown predicted.

Grain prices will rise especially fast since distillers will be able to bid proportionately higher prices as petroleum costs go up. Brown estimated that distillers would be able to pay as much as $5 per bushel for corn (it now cost about $2.60) when gasoline prices reach $2 per gallon.

"In the absence of government intervention . . . affluent motorists will be able to bid food resources away from the world's poor," Brown said. Since decision-makers in most countries tend to own the world's 315 million cars, "the expanding production of fuel crops will underline the vast disparities in income within and among societies as perhaps nothing else has ever done."

Brown said a ban on most automatic transmissions in new cars would save as much gasoline as the U.S. gasohol program would yield by 1985. An American gas guzzler that gets 15 miles per gallon would require 14,000 pounds of grain each if it burned nothing but alcohol, and 1,460 pounds if it burned gasohol -- 10 percent alcohol and 90 percent gasoline.