U.S. Faces Scrutiny at Food Conference

An upcoming U.N. meeting is likely to question America's ethanol policy and how it gives aid.

World Food Program workers in Sudan offload sacks of rice donated by the US Agency for International Development.
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A gathering of world political and agricultural policy leaders next week in Rome will attempt to point a way out of the perils flowing from a surge in food prices that is impoverishing millions of people and causing public outrage that has rattled some governments.

And although the United States is the world's top producer of food and the No. 1 donor of food aid, the way Washington gives that assistance and its promotion of corn-based biofuels will face tough scrutiny at the summit called by the United Nations Food and Agriculture Organization. The meeting may produce a call for policy guidelines on the manufacture of biofuels.

The human stakes are high. The World Bank has estimated that high food prices have already nudged 100 million people into poverty. If food suppliers don't take effective action, there is a risk of outright famine, the organization says. In real terms, food prices are broadly said to be at their highest level in three decades. The threat of going hungry has sent people into the streets in several countries, some of which have slapped bans on exports of key commodities, like rice, to try to maintain adequate domestic supplies.

The FAO this week said that 22 countries—most in sub-Saharan Africa—are "particularly vulnerable" to the crisis. The double hits of lofty fuel prices and high food costs are posing the greatest problems for "poor food buyers in the cities and non-food producers in rural area," said the FAO. The organization warned of the risk of more price hikes over the next few planting seasons; it is recommending that donors concentrate on helping poor farmers get affordable fertilizers, seeds, and other supplies to bolster local production.

The U.S. delegation to the June 3-5 conference will be led by Agriculture Secretary Ed Schafer, who seemed to anticipate some of the expected criticism in remarks made today. "The United States contributes more than one half of all the world's food aid," he said, adding that U.S. assistance to at-risk countries would be expanded immediately.

President Bush has already asked Congress to back an additional $770 million in food aid in next year's budget, which would raise the total to $2.7 billion.

Schafer also said he would urge other countries to embrace more agricultural research and the use of biotechnology, including genetically modified crops. "Biotechnology is one of the ways that we can increase yields," he said.

Schafer defended U.S. subsidies and trade protection for corn-based ethanol—a policy that some food analysts and U.N. officials have cited as a factor in shifting productive land away from other crops and pushing up food prices. Schafer played down the impact. "According to our analysis, increased biofuel production accounts for only 2 to 3 percent of overall increase in global food prices," he said.

That estimate is sure to be challenged in Rome, but it will not be the only facet of Washington's response to the food crisis that will be scrutinized. To varying degrees, the United States, Japan, and key European countries all restrict their food aid to emphasize the distribution of food in their existing stocks. That may please farm and agribusiness constituencies in the United States, but it may stunt the development of more robust farm production in developing countries.

"Regardless of how much food aid is released, nearly 100 percent of American support is in the form of homegrown crops, not money," Laurie Garrett, a Council on Foreign Relations analyst, wrote recently. "Some of this is written into U.S. laws, supported by both American political parties, stipulating that a minimum of 75 percent of all food aid must be in the form of American-grown crops, and all of it must be transported using U.S. ships, planes, trains, or vehicles."

The effect is to plow back most of the higher expenditures into U.S. agricultural interests, including shipping and processing firms. "The real winners in a U.S. food aid program are American agricultural companies," writes Garrett.