[Congressional Record Volume 154, Number 59 (Tuesday, April 15, 2008)]
[House]
[Pages H2325-H2326]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE REAL CULPRIT FOR RISING FOOD PRICES
The SPEAKER pro tempore. Under a previous order of the House, the
gentlewoman from Ohio (Ms. Kaptur) is recognized for 5 minutes.
Ms. KAPTUR. Madam Speaker, the world is beginning to understand what
my constituents have known for far too long, higher food prices and
higher
[[Page H2326]]
commodity prices are destroying prosperity for millions and millions of
people here at home and abroad. Whether there is a hungry person in
Toledo, Ohio or in Haiti, the rising costs of basic food are really
placing the world's marginalized and poor in even a tighter squeeze.
Getting in the front of devastation that higher commodity prices can
cause is a challenge to all of us. While I am pleased that the leaders
of the International Monetary Fund and the World Bank have called for
half a billion dollars more to feed the poor of the world, I'm deeply
troubled that these leaders have pointed to the same tired rhetoric in
diagnosing the cause of these rising prices. It's been very interesting
for me to hear them say they're blaming higher food prices on the
production of ethanol and biodiesel in agricultural America, which is
actually a new value-added market for our farmers. It's actually a new
market that's taking land that is just laying fallow for years, where
we have paid commodity payments and gotten nothing, now we are
beginning to reuse some of that land again.
The real culprit for rising food prices is rising oil prices. Our
world is facing a crisis precipitated by the greater competition for
dwindling supplies of world energy that has caused all the prices of
basic goods to skyrocket. But instead of dealing with that reality of
how oil is embedded in every aspect of life in this country and
globally, they're trying to blame this on the new developing market of
renewable energy.
Yes, under current technology biofuels consume some food stocks for
the production of fuel. Corn has been utilized by some ethanol
producers, for example. But to claim that biofuels are the cause of
rising food prices, that's disingenuous at best. Look to the rising oil
prices at over $113 a barrel, and this oil-dependent economy must
become energy independent here at home again. And renewable fuels based
in agriculture are a part of the solution for this country in the
world.
Take a look at the rising cost of fertilizer that can be directly
attributed to the increasing cost of natural gas and smaller crop
sizes. According to the recent Texas A&M Agriculture and Food Policy
Center analysis, rising fertilizer costs have led to a $3 million acre
reduction in planted corn in the 2006, 2007 crop year.
Let's look at another major cause globally of why food prices are
going up: Drought. World food production has gone down because in
Australia and eastern Europe, and because of poor weather in Canada and
western Europe and Ukraine, we've seen overall production reduced. With
such world stocks for wheat at 30-year lows, buyers are turning to the
United States for supplies. Has the IMF offered suggestions to these
nations for dealing with the drought that global warming is causing?
No. They're just blaming America's farmers.
Higher incomes around the world are boosting demand for processed
foods in countries such as India and China. And this higher demand has
skyrocketed the need for products produced across the supply chain.
Now, has the IMF sought to better manage the uncontrolled growth in
developing countries? No. They're just blaming America's farmers.
{time} 1915
With the U.S. dollar in free fall, American agricultural goods have
become extremely attractive internationally and have placed great
demand on foodstuff production domestically. With greater competition
for food, with more U.S. exports, our weak dollar due to terrible
economic policies here at home has decreased the power of Americans to
purchase food produced right here in our country. Has the IMF
identified the weak dollar as the challenge to millions of Americans
faced with food shortages? Of course not. They just blame the U.S.
farmer and the new developing market of biofuels.
With the price of oil reaching over $110 a barrel, the world's
addiction to oil is driving up the production costs of agricultural
products. How much do you think it costs to haul a truckload of bell
peppers from Salinas Valley in California to Cleveland, Ohio?
I cannot accept IMF's wanton attack on the investment in rural
America. If we follow their formula, we would not be growing any food
domestically. If we were following IMF's advice, we would not be
developing the infrastructure and capacity to produce our own renewable
energy here at home and help lead the world in a real energy-
independent transformation of this country.
Madam Speaker, Americans simply must commit to cutting off our oil
addiction and restoring energy independence here at home.
[From IMF Survey Magazine, Apr. 10, 2008]
Food Price Rises Threaten Efforts To Cut Poverty--Strauss-Kahn
Higher food prices have particularly adverse effect on the
poor.
Projections show nearly all African countries suffering
food price shocks.
IMF Spring Meetings to discuss global strategy on food
price crisis.
A rise in food prices of 48 percent since end-2006 is a
huge increase that may undermine gains the international
community has made in reducing proverty, IMF Managing
Director Dominique Strauss-Kahn warned.
He told an April 10 news conference in Washington that
policy responses to higher food prices have to be tailored to
meet the needs of each country.
Strauss-Kahn said the IMF could take four steps to help
address higher food prices in the short term:
Support countries in designing appropriate macroeconomic
policies to deal with shocks; provide advice and technical
assistance for countries where rising food prices are eroding
terms of trade, through targeted income support for the
poor--without jeopardizing hard-won gains on economic
stabilization; in countries where price shocks are affecting
the balance of payments, provide assistance through IMF
lending facilities, and work, along with other agencies and
donors, to help countries mitigate negative impacts.
Open trade policies
Longer-term answers to the problem of higher food prices
centered on removing obstacles to increased supply, Strauss-
Kahn said.
The IMF cites increased trade as a policy option for
mitigating the effects of higher commodity prices on national
economies. IMF chief economist Simon Johnson told an April 9
World Economic Outlook briefing: ``As a way to reduce global
pressure on food and energy prices, more open trade policies
in those products would be a good start. Less insular
biofuels policy in advanced economies would help relieve some
pressure. At the same time, we encourage countries to avoid
raising taxes or imposing quotas on their food exports. These
reduce incentives for domestic producers and also increase
international prices.''
Impact on inflation
IMF research shows that higher prices for food pose new
challenges for African policymakers and could have
particularly adverse effects on the poor. Because food
represents a larger share of what poorer consumers buy, a
global increase in food prices has a bigger impact on
inflation in poorer countries.
IMF studies show the rise in food prices reflecting a
mixture of longer-term factors such as food crops being
diverted to biofuel production; higher food demand from
emerging economies; and higher energy and fertilizer costs.
Temporary factors, such as droughts, floods, and political
instability, also contributed to higher food prices.
Strauss-Kahn displayed a map at the press briefing that
showed the impact of projected food price increases on global
trade balances.
``Almost all African countries have a negative impact from
these food prices,'' Strauss-Kahn told the briefing. A
problem in trade balances meant problems in current accounts.
Problems in current accounts meant problems that the IMF
could help address, he said.
New projections on the effects of higher food prices follow
publication of a World Bank-IMF report warning that most
countries will fall short on the Millennium Development
Goals, a set of eight globally agreed development targets
that the international community is aiming to achieve by
2015. The report said that though much of the world is set to
cut extreme poverty in half by then, prospects are gravest
for the goals of reducing child and maternal mortality, with
serious shortfalls also likely in primary school completion,
nutrition, and sanitation goals.
New kind of imbalance
In Africa and Asia the effect of higher food prices would
have to be seen not only in terms of undermining the efforts
to fight against poverty but also as representing a new kind
of macroeconomic imbalance, Strauss-Kahn said. For a large
part of Africa, a shock could be expected that was as big as,
and maybe bigger than, previous shocks.
Strauss-Kahn welcomed an initiative launched by U.K. Prime
Minister Gordon Brown that urges the IMF, the World Bank, and
the United Nations to develop a global strategy to address
higher food prices. ``The initiative taken by Gordon Brown is
perfectly timely, We need now to consider the rise in food
prices as something which is not just happening for one or
two months but as probably more structural,'' Strauss-Kahn
said.
The Brown proposal would probably be on the agenda of the
IMF-World Bank Spring Meetings and of the ministerial meeting
of the Group of Seven industrial countries, he added.
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