Growing concern over biofuel policies
Americans griping about the higher cost of food might want to take a
look at what’s happening in places like Kenya or Sri Lanka.
Food prices in those countries rose 25 percent during the past year,
more than four times the inflation U.S. consumers saw, according to a
new report by the United Nation’s Food and Agriculture Organisation. In
Botswana, food prices are up 18 percent.
It’s those kinds of price increases that alarm aid organisations and
economists. They say that food is becoming unaffordable for the world’s
poorest people, who already spend 50 percent to 70 percent of their
income on simple meals.
These price increases are also feeding the growing concerns worldwide
about U.S. and European biofuel policies. The organisation’s report,
issued in advance of a conference on food security this week in Rome,
warns that 22 nations are especially threatened by rising food prices.
One is Kenya, where nearly one-third of the population is
undernourished and the price of corn has nearly doubled to more than $7
a bushel in the past year. Corn meal is used to make a mash or porridge
known as ugali, a staple of the Kenyan diet.
“When that (corn) is affected, everybody in Kenya is affected,” said
Njoroge Maina, an agricultural adviser for CARE, a U.S.-based aid group.
In the United States, the rising price of corn induced farmers to grow
more of the crop, but in Kenya that hasn’t happened.
The government last week estimated that production in the country’s
key grain-growing region would fall more than 20 percent this year.
Part of the problem is the violence that disrupted the nation after
its recent elections, but the soaring price of fertilizer and fuel also
is a factor, Maina said. Farmers planted less acreage and they used less
fertilizer on what they did plant, he said. The nation’s grain reserves
are due to run out in August, forcing the nation to rely on imports, he
said.
“Even while the price of the commodity has gone high, the common man
may not benefit because of reduced production,” said Maina, referring to
farmers. U.S. ethanol producers and farm groups say biofuel production
is being unfairly blamed for global increases in food costs.
These groups see the Grocery Manufacturers Association, a
Washington-based trade group that represents companies such as General
Mills and Kraft, behind the international concerns that are being raised
about ethanol and food prices.
“Some of the international organizations that have looked at this are
just looking at the talking points from (the grocery association),” said
Bob Dinneen, president of the Renewable Fuels Association.
Economists with the International Food Policy Research Institute, a
Washington-based analyst funded by governments and foundations, agree
that biofuel production is only one of several factors behind the recent
food price increases.
Demand for food has grown because of growing populations and income
in countries such as China and India. Droughts reduced wheat production
last year. Export bans have driven up the price of foods, such as rice.
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