With the price of corn, wheat and other grains reaching 30-year highs, President Bush has defended his administrations biofuels policy.

Answering critics’ allegations that ethanol production is the primary cause of food inflation, Bush highlighted the need for the US to develop its own sustainable fuel source.

“It’s in our national interest that our farmers grow energy, as opposed to us purchasing energy from parts of the world that are unstable or may not like us,” he said at a news conference on the economy.

Bush attributed the recent increases in food prices to greater demand from China, India and newly wealthy developing countries, as well as bad weather and higher energy and transportation costs.

The food industry and farm groups have lined up on opposite sides of the debate.

The American Farm Bureau Federation and other farm groups have defended government support for ethanol, which they say helps lower gas prices.

Meanwhile, the Grocery Manufacturers Association and other food industry bodies have argued that the use of grains in ethanol production has driven prices up. This has, in turn, boosted prices for bread, meat and dairy products.

“While other factors have contributed to rising grain costs, we maintain that if the federal government reduced its ethanol targets this would have an immediate impact on prices. The federal government can’t control global demand or the weather, but by cutting back ethanol production they can bring spiralling prices under control,” a spokesperson for the GMA told just-food yesterday (29 April). 

Congress’ Joint Economic Committee will hear from both sides of the fence tomorrow (1 May), while a House Energy and Commerce subcommittee will hold a hearing on government ethanol policies next week (6 May).