Bush wouldn’t blame bio-fuels, wants subsidies, export curbs to go

May 2nd, 2008 - 10:54 am ICT by admin  

By Arun Kumar
Washington, May 2 (IANS) President George Bush has asked Congress to approve $770 million in new global food aid, but refused to admit that America’s fad for bio-fuels was a major contributor to an escalating crisis around the world. Instead he again made a pitch for a successful Doha agreement eliminating “market-distorting subsidies for agricultural goods” - a sticking point with the developing world at Doha - and urged countries to lift restrictions on agricultural exports. Many countries have done so to prevent shortages at home.

“We’re also working toward the conclusion of a successful Doha agreement that will reduce and eliminates tariffs and other barriers, as well as market-distorting subsidies for agricultural goods,” he told reporters at the White House Thursday.

“And the reason why getting a Doha Round done is important is it’ll end up reducing the cost of food, importing food; it will make it cheaper for consumers all around the world.

“In other words, we want to change the system to make it easier for people to get less expensive food,” he said urging countries that have instituted restrictions on agricultural exports to lift those restrictions.

“Some countries are preventing needed food from getting to market in the first place, and we call upon them to end those restrictions to help ease suffering for those who aren’t getting food,” Bush said.

He also urged countries to remove barriers to advanced crops developed through biotechnology. “These crops are safe, they’re resistant to drought and disease, and they hold the promise of producing more food for more people.”

If Bush’s request is approved, the US would spend nearly $5 billion for global food aid during the next two years. “We believe in a timeless truth:

To whom much is given, much is expected,” he said.

White House spokesman Tony Fratto said the contribution of biofuels to rising food prices was not as significant as it was made out. The biofuels were unfairly taking a lot of the blame, he suggested insisting, “They’re just one of a handful of reasons for - and not the biggest reason.”

Fratto said “…if we see that it is having a particularly large effect, maybe there would be some reconsidering of our policies,” to ramp up the biofuels in a big way.

As Bush had said the other day “it’s not just an economic decision; there’s a security issue involved also,” Fratto said as it reduced dependency on foreign sources of oil. “I don’t know how you put a dollar figure on that, but our national security is important.”

Suggesting “a lot of other factors are affecting our food prices, he said:

“the biggest impact on price with respect to grains in this country is pretty much limited to corn, — and you’re seeing corn prices rise-and that’s only a portion of most food products.”

On the other hand, “If you go to a developing country, if you go to Mumbai in India and walk into a market, what you’ll see are stacks of flour and rice and milk in large containers,” he said. “These are people who are living on $1 or $2 or $3 a day, and they’re buying commodities.”

And so unlike the US, where people take a lot of processed food, “it is a very acute problem in poor countries that the bulk of their food purchases are commodities with not a whole lot of value-added to them,” Fratto said.

“It just has not had the same explosive effect in this country that you would find in poorer countries.”

However, unlike the White House, members of US Congress say they overreached by pushing ethanol on consumers and will move to roll back federal supports for it - the latest sure signal that Congress’ appetite for corn-based ethanol has collapsed as food and gas prices have shot up, media reports said.

The Washington Times Thursday quoted House Majority Leader Steny H. Hoyer as saying Democrats will use the pending farm bill to reduce the subsidy, while Republicans are looking to go further, rolling back government rules passed just four months ago that require blending ethanol into gasoline.

“The view was to look to alternatives and try to become more dependent on the Midwest than the Middle East. I mean, that was the theory. Obviously, sometimes there are unforeseen or unintended consequences of actions,” Hoyer said.

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