US food policy under fire at summit

This week, outside the UN emergency summit on food in Rome, protesters dressed as ears of corn. Inside, Bush administration officials on June 4 found themselves on the defensive on a wide range of US policies, from biofuel production to genetic engineering and subsidies. But the biofuel issue quickly emerged as the most contentious at the summit on the global food crisis. Delegates clashed during the three-day meeting over how much blame can be assigned to biofuels for the meteoric rise in food prices. The US is an enthusiastic supporter of the robust and heavily subsidized biofuel industry, with plans to allocate about a quarter of its corn crop to the production of ethanol. US claims that its subsidies for the production of corn ethanol were not playing a significant role in sharp increases in the price of food triggered an angry response and was contradicted by UN figures. The summit's host Jacques Diouf, director general of the UN's Food and Agriculture Organization (FAO), attacked western policies, targeting the US in particular. "Nobody understands how 11 to 12 billion dollar a year subsidies in 2006 and protective tariff polices have had the effect of diverting 100 million tonnes of cereals from human consumption, mostly to satisfy a thirst for fuel for vehicles," Diouf said. He was referring to the annual cost of US subsidies to produce ethanol from corn. But many other nations and numerous aid agencies contend that too much food is ending up in fuel tanks and not on dinner tables, deepening a threat of global starvation. The final summit declaration issued the next day reflected watered-down recommendations of "further studies" on biofuels, hardly viewed as a decisive position. Finding consensus on biofuels, which are made from corn, sugar cane, palm oil and other foodstuffs, had been one of the goals outlined by United Nations Secretary General Ban Ki-moon in opening the summit at the headquarters of the FAO. Several UN agencies, relief groups and the International Monetary Fund say as much as 30% of the recent food price increases could be blamed on biofuels. "Even 1% represents hardship for 16 million people," said Madelon Meijer, agricultural policy advisor for the British aid agency Oxfam. "Three percent already plunges a lot more people into poverty." Oxfam was one of several groups staging demonstrations outside the conference, with people dressed as corn carrying out symbolic tugs of war between the hungry and those needing fuel. Oxfam argues that the amount of grain required to produce enough ethanol to fill an SUV's tank could feed one person for a year. Biofuels were once hailed as an alternative to dirty fossil fuels and a way to ease dependence on oil. But experts and others increasingly question the efficiency of biofuels and assert that ethanol production is usurping arable land that should be used for growing food crops or left as oxygen-enhancing forests, wetlands and natural habitats. The shift to biofuels is only one cause of rocketing food prices. Other factors converging disastrously include high fuel costs, speculation, droughts and floods, and changing diets that spawn greater demand. US officials are used the summit to promote genetic engineering, but several European countries have banned the use of genetically modified foods. US officials said they would bypass the Europeans and work directly with developing nations that would be open to the technology. Opening the summit the UN secretary general said that to meet global food demand, production would have to increase by 50% by 2030. There was general agreement that more food aid was needed in the short run, and more investment in agriculture in the long run, especially in Africa. But it was less clear who, if anyone, would pay the estimated annual cost of $30 billion to meet the UN's goal. As the summit came to a close, advocacy groups demanded greater attention be afforded small-scale and women farmers. "[T]he main causes of the world food crisis are not being dealt with and...the world's food producers -- the farmers, fisherfolk, agricultural workers and indigenous people -- have been shut out of the discussion," said Via Campesina, a global social movement representing more than 150 million small producers from five continents. Farmer and civil society leaders held a peaceful demonstration in Rome on June 3, the first day of the summit, to voice their concern that millions are going hungry while "the corporations that control the global food system are making record profits." The farmers and their representatives were forcibly removed from the summit premises after a demonstration outside the press room expressing their "outrage" that issues of corporate control and food speculation were not being adequately addressed at the summit. Food shortages and rising prices have increased malnutrition and spread starvation where food was already scarce, and spawned angry mobs from Haiti to Egypt to Bangladesh in recent months. Some 850 million people around the world were short of food before the crisis began to escalate, says the UN, which believes that number will soon approach 1 billion. Meanwhile, against the backdrop of a food crisis some experts say is the worst in three decades, corporate agribusiness has been enjoying huge profits. On Apr. 29, grain-processing giant Archer-Daniels-Midland Co. (ADM) said its fiscal third-quarter profits jumped 42%, including a sevenfold increase in net income in its unit that stores, transports and trades grains such as wheat and corn, as well as soybeans. Monsanto Co., maker of seeds and herbicides, Deere & Co., which builds tractors, combines and sprayers, and fertilizer maker Mosaic Co. all reported similar windfalls in their latest quarters. Monsanto saw its profit in the latest quarter more than double. Rivals DuPont Co. and Syngenta AG recently raised their profit estimates. Deere posted a 55% rise in earnings in its latest quarter. Mosaic's third-quarter net income jumped about 12-fold. ADM's major rivals are notching big profit gains, too. Closely held Cargill Inc.'s profits jumped 86% to $1 billion in the latest quarter. Bunge Ltd.'s earnings rose about 20-fold to $289 million. Bunge sells fertilizer in addition to processing and storing grains.