Wednesday, May 7, 2008

Just in from Washington

AFBF: Food Fix Needs to be Thoughtful, Comprehensive

WASHINGTON, D.C., May 7, 2008 – The American Farm Bureau Federation today said there is no short-term fix for the complex global food situation. In a statement on global food prices submitted to Congress, AFBF said there are many factors causing an increase in food prices around the world that must be addressed with thoughtful and comprehensive measures.

Escalating energy prices, demand and weather are but a few culprits for rising food prices, said AFBF. The organization also said the overall food price issue is much larger than the U.S. “It is global and requires global solutions,” said the organization.

AFBF cited a February 2008 report by the United Nations’ Food and Agriculture Organization that “identifies the rising cost of energy, increased worldwide demand, weather impacts on crop production, lower stocks levels, and the production of biofuels and the operation of financial markets as part of the current global food situation. This has resulted in world price increases of 80 percent for some products from 2005 to 2008,” said AFBF in its statement.

Domestically, said AFBF, the spiraling cost of natural gas and crude oil are having a major impact on production costs for farmers, ranchers and the entire food production chain. “Action must be taken to reduce our reliance on foreign sources of oil,” said AFBF. “Development of domestic oil and gas reserves, a continued commitment to biofuels and development of renewable resources must be part of the solution.”

Because of the renewable fuels standard (RFS), gas prices have already been lowered by as much as 15 percent according to AFBF and other studies, saving the consumer roughly 50 cents per gallon.

The organization also said other remedies are needed, such as investments in agricultural research and infrastructure, which play a critical role increasing agricultural production. Globally, countries should be discouraged from placing embargos on exports, which only result in escalating prices, and markets must be given time to adjust to growing demand and be allowed to stabilize.

Short-term solutions, such as food aid, agricultural assistance and efforts to calm markets, could help through the difficult time, but, says AFBF, “The situation we face today has been building over a long period. It will not be resolved by politically expedient solutions but must be addressed in a thoughtful and comprehensive manner.”

Long-term, said AFBF, there also needs to be more objective and open-minded approaches to agriculture productivity around the world. “Deciding to forgo technologies that can significantly improve yields, reduce pesticide needs and provide for greater output puts a major cost on developing and other economies.”

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