May 20, 2008

Trade barriers raising food prices, not ethanol, US, Brazil says
 

Trade restrictions, not biofuels, are to blame for soaring world food prices, top US and Brazilian agricultural officials said Monday.

Trade barriers thrown up by India, Vietnam and Argentina - among the world's top producers of rice, soy and wheat - are reducing world food supply and inflating prices around the globe, said Mark Keenum, Under Secretary for Farm and Foreign Agriculture Services at the USDA.

India and Vietnam have restricted most rice exports, while Argentina has banned wheat and beef exports and imposed heavy export taxes on soy.

Those moves have "inhibited the capacity of its producers to maximize their income," pushing up food prices far more than demand for biofuel, Keenan told reporters after meeting with agricultural officials in Brasilia.

Contrary to expectations, increased production of sugarcane-based ethanol did not reduce Brazilian bean, soy and corn output, Brazilian International Agribusiness Secretary Celio Porto agreed.

He urged nations to slash farm subsidies and tariffs to boost world food production by giving smaller countries access to larger markets.

Brazil is the world's largest ethanol exporter, and last year signed accords with the US to boost biofuel production and draft international quality standards that would allow ethanol to be traded as a commodity.