WASHINGTON -- The leaders of the G-8 industrial countries including President Bush issued a food security statement on July 8 calling countries that have put export controls on food to end them, but did not criticize biofuels as a source of food price increases as some advocates had hoped.
The G-8 leaders have been meeting in Japan.
Reacting to some developing countries placing export controls on rice and other commodities, which has cost commodities prices to rise even higher than market fundamentals would indicate, the G-8 leaders said in a statement it is "imperative to remove export restrictions and expedite the current negotiation at the World Trade Organization aimed at introducing stricter disciplines on these trade actions which prolong and aggravate the situation, and hinder humanitarian purchases of food commodities."
Biofuels
Some nongovernmental organizations and some European government and World Bank officials have suggested that biofuels are a key factor in rising food prices, but the G-8 leaders said only that they want to "ensure the compatibility of policies for the sustainable production and use of biofuels with food security and accelerate development and commercialization of sustainable second-generation biofuels from non-food plant materials and inedible biomass."
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They added that they would "work together with other relevant stakeholders to develop science-based benchmarks and indicators for biofuel production and use."
Renewable Fuels Association President Bob Dineen praised the statement, saying the G-8 leaders "clearly understand the need of world's nations and peoples to develop, produce and use renewable fuels like ethanol."
He added, "Clearly, the G-8 leaders recognize that soaring crude oil prices, commodity speculation, poor weather conditions and greater demand have contributed significantly to higher food prices."
Grain reserve
The leaders also said they are exploring the "pros and cons of building a 'virtual' internationally coordinated reserve system for humanitarian purposes," which World Food Program executive director Josette Sheeran had proposed. That statement indicated that the proposal has proven controversial. Gus Schumacher, an Agriculture undersecretary for farm and foreign agricultural services in the Clinton administration and since a consultant to the Kellogg Foundation, said an internationally managed grain reserve could hurt efforts to increase production in developing countries.
"Internationally managed grain reserves to be another way to say 'internationally managed prices for urban consumers,'" Schumacher said. "In other words, when prices are relatively high and begin to stimulate production and thus allow poorer farmers to have the ability to purchase fertilizer and better seed; then the international groups may place grain on the market and undercut farm income."
Schumacher added, "Why not have a fertilizer reserve, a pesticide reserve, a herbicide reserve, a seed reserve, a food oil reserve, a dry milk powder reserve, meat reserve, live animal reserve like China has? [It] sounds like a great program for those that want to keep investment in agriculture low and farmers at the mercy of politicians and international development groups."
The G-8 leaders also promised to increase agriculture development aid in Africa and said that food surpluses should be used, but "in a way not to distort trade."
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