Agri­cul­ture Sec­re­tary: Ethanol as cause of food cri­sis ‘flat-out wrong’

The Washington Times Weekly - - National - By David R. Sands and Stephen Di­nan

Agri­cul­ture Sec­re­tary Ed Schafer on May 9 said U.N. and other in­ter­na­tional aid of­fi­cials are “flat-out wrong” to call U.S. ethanol pro­duc­tion from corn a ma­jor fac­tor in world food short­ages and ri­ots.

Mr. Schafer, a long­time pro­po­nent of bio­fu­els, ve­he­mently dis­puted ef­forts by the lead­ers of the World Bank and the U.N. World Food Pro­gram to blame ethanol for ris­ing world food prices. He said his de­part­ment cal­cu­lates that com­pe­ti­tion be­tween food and bio­fu­els ac­counts only for up to 3 per­cent of food price in­creases.

“Only a very small por­tion of this prob­lem is ethanol driven,” Mr. Schafer said in an in­ter­view with The Wash­ing­ton Times. Global food prices have risen 45 per­cent since mid-2007.

Mr. Schafer also said the ad­min­is­tra­tion will have an “up­hill climb” to sus­tain Pres­i­dent Bush’s promised veto of the farm bill com­pro­mise that Repub­li­cans and Democrats on Capi­tol Hill reached ear­lier this month.

“Many Repub­li­can leg­is­la­tors in both houses [. . . ] have in­di­cated they’re go­ing to vote to over­ride the pres­i­dent,” he said, not­ing the lure of “money in their dis­trict.”

Mr. Schafer has be­come the ad­min­is­tra­tion’s point man for op­pos­ing the farm bill, ar­gu­ing it does not suf­fi­ciently cut sub­si­dies to high-in­come farm­ers.

“They’ve made it look good; they’ve said, ‘Oh, we put some lim­its on folks here,’ but the re­al­ity is they haven’t,” he said.

Mr. Schafer, a for­mer gov­er­nor of North Dakota who was sworn in as agri­cul­ture sec­re­tary in Jan­uary, in the mid­dle of the farm bill dis­cus­sions, said farm in­come is pro­jected to reach a record $92 bil­lion this year, which is 50 per­cent higher than the av­er­age over the past 10 years.

He said con­tin­u­ing sub­si­dies and adding new ones make no sense when farm in­comes rise.

Mr. Schafer has led the de­fense of the U.S. bio­fu­els pro­gram, which has come un­der fire most no­tably from for­mer top Bush ad­min­is­tra­tion of­fi­cials.

World Bank Pres­i­dent Robert B. Zoellick and U.N. World Food Pro­gram head Josette Sheeran, both of whom served as top of­fi­cials at the State De­part­ment and U.S. Trade Rep­re­sen­ta­tive’s Of­fice, have said the switch to ethanol, which is made from grains, is rais­ing the de­mand for sta­ples such as wheat, rice and corn to record lev­els.

“I’m con­cerned about the fus­ing of food and fuel mar­kets,” which pits mon­eyed en­ergy in­ter­ests against the world’s poor, Ms. Sheeran told the Peter­son In­sti­tute for In­ter­na­tional Eco­nomics two weeks ago. “En­ergy bid­ders can out­bid food buy­ers and, in a year of tight sup­plies, that’s hav­ing a big­ger im­pact than it would or­di­nar­ily.”

And Jef­frey Sachs, a top ad­viser to U.N. Sec­re­tary-Gen­eral Ban Ki­moon, said two weeks ago that the U.S. bio­fu­els pro­gram, the world’s largest, rep­re­sents a “huge blow to the world food sup­ply.”

Pres­i­dent Bush has or­dered the Agri­cul­ture De­part­ment to re­lease $200 mil­lion in emer­gency food aid to low-in­come coun­tries strug­gling with higher food costs. The ad­min­is­tra­tion has also asked for $350 mil­lion in new food aid fund­ing in the sup­ple­men­tal war-spend­ing bill, and law­mak­ers may tack on even more.

But Mr. Schafer said that ris­ing en­ergy prices, drought in key pro­duc­ing re­gions, and ris­ing de­mand from de­vel­op­ing coun­tries such as China and In­dia have played a far more sig­nif­i­cant role than ethanol, adding that those strains on the world’s food net­works can’t be solved overnight.

“Un­der our cur­rent mod­els, we’re show­ing that we will see th­ese lev­els of [food] prices for the next three years,” he said.

Schafer

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