Bush now blames Indian middle class for rising food prices

May 3rd, 2008 - 10:30 am ICT by admin  

By Arun Kumar
Washington, May 3 (IANS) US President George Bush has joined his top diplomat in suggesting that the growing prosperity of India’s large middle class is contributing to rising food prices around the world. “…the more prosperous the world is, the more opportunity there is,” he said commenting on the economy during a visit Friday to World Wide Technology, Inc. in Maryland Heights, Missouri. “It also, however, increases demand.”

“So, for example, just as an interesting thought for you, there are 350 million people in India who are classified as middle class. That’s bigger than America. Their middle class is larger than our entire population.

“And when you start getting wealth, you start demanding better nutrition and better food. And so demand is high, and that causes the price to go up,” said Bush joining his top diplomat Condoleezza Rice in suggesting India’s role in the world food crisis.

Secretary of State Condoleezza Rice had also said last week that apparent improvement in the diets of people in China and India and resultant export caps among the reasons for the skyrocketing prices of grain worldwide.

Listing some causes for what the World Food Programme director, Josette Sheeran, has described as “a silent tsunami”, she had said: “Now, some of that is not so much declining production as apparently improvement in the diets of people, for instance, in China and India, and then pressures to keep food inside the country.”

But unlike Rice who acknowledged that biofuels may be a contributory factor, Bush would not agree that America’s new found love for corn-based ethanol was causing the prices of food to go up.

“As you know, I’m a ethanol person,” he said. “I believe, as I told you, the interim step to getting away from oil and gas is to go to ethanol and battery technologies for your automobiles.”

“I think it makes sense for America to be growing energy. I’d much rather be paying our farmers when we go to the gas pump than paying some nation that may not like us,” Bush said.

As nearly all of ethanol now is produced from corn, the price of corn is real high now, he said. “And so people say, well, it’s your renewable fuels policy that is causing the price of food to go up.”

“I’ve looked at this issue a lot. Actually, the reason why food prices are high now is because, one, energy costs are high. And if you’re a farmer, you’re going to pass on your cost of energy in the product you sell; otherwise you go broke,” Bush said.

“And when you’re paying more for your diesel, paying more for your fertiliser because it’s got a lot of natural gas in it-in other words, when your basic costs are going up, so does the cost of food,” he offered.

Bush also blamed “weather-related problems” for the crisis. “Some of the major producers of food have had drought. That’s what happens. Weather patterns change. And so there’s a lot of reasons why the price of food is high.”

“And no question that ethanol has had a part of it, but I simply do not subscribe to the notion that it is the main cost-driver for your food going up,” Bush said.

America is by far the most generous nation when it comes to helping the hungry, he said. “No contest. We’re an unbelievably compassionate nation.

“And so I asked Congress to put some more money out. It will be over-it’s about $5 billion, over a two-year period of time, of food. Keep in mind, we’re spending about $19 billion here at home.”

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