The US Department of Agriculture has downplayed concerns that the production of biofuels is having serious consequences for the price of food.
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Agriculture Secretary Ed Schafer told reporters in Washington that demand for biofuels is having an impact on food prices, “but it is not a major factor”. He said changing the direction of biofuels policy would not calm rampant food inflation.
“The change in the renewable fuel standard, the change in tariff or duty isn’t going to affect food prices,” said Schafer. “We need to focus on things that will actually have an effect instead of a short-term political solution.”
Indeed, the Bush administration has estimated that only 3% of the 40% rise in global food prices can be attributed to biofuels production. Instead other factors, including high oil prices and increased global food demand have been blamed for rising prices in the US.
Food industry groups, however, disagree.
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By GlobalDataThe Grocery Manufacturers Association has blasted the growing use of corn to make fuel that is driving up the cost of virtually all commodities.
“We maintain that biofuels targets have a direct relationship with rising food prices. American families are paying the price of this administration’s ethanol policy in their grocery bills,” a spokesperson for the GMA, which represents industry giant such as Kraft Foods and General Mills, told just-food.
With soaring feed prices, the US poultry industry is one sector also feeling the brunt of rising commodity costs. Responding to the comments made today (20 May) by the USDA, the National Chicken Council (NCC) said that while commodity prices may not have hit consumers yet, shoppers are likely to feel the pinch “sooner or later”.
“It may be true that the enormous usage of corn for biofuels is not having a major impact on food prices – yet,” the NCC said. “However, it is beyond question that it is having a tremendous impact on the cost of feed for food animals, and that impact is bound to hit the consumer level sooner or later.”
