Drought in the U.S. farm belt may result in higher prices for poor people around the world, according to the head of an agricultural think tank who on Monday also recommended a halt to ethanol production from corn.
Shenggen Fan, director general of the International Food Policy Research Institute, said the global spike in food prices in 2008 showed how poor crops and tight supplies have wide impact. I FP RI is the analytical arm of a coalition of agricultural research facilities.
Fan suggested six steps to rein in prices and head off out-of-control prices caused by this year’s drought.
More than 60 percent of the continental United States, including prime grain territory, is under moderate to exceptional drought. The Agriculture Department was scheduled to make its first estimate of the fall harvest on Friday. Some private analysts say the corn crop could be the smallest in a decade.
“Food crop demand for biofuels, particularly in the United States and European Union must be cut substantially, as should mandates for ethanol content in fuel, to help relieve the pressures on both domestic and global food markets,” Fan said in a release.
Ethanol production accounts for about 40 percent of the U.S. corn crop.
Reuters
