Drought in the US 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 (IFPRI), said the 2008 global spike in food prices showed how poor crops and tight supplies have a wide impact. The IFPRI is the analytical arm of a coalition of agricultural research facilities.
Fan suggested six steps to rein in costs and head off out-of-control prices caused by this year’s drought.
More than 60 percent of the continental US, 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 US and EU 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 US corn crop.
He also urged nations to avoid export bans, to be ready to use their stockpiles to address food emergencies and continued aid to expand food production in developing countries.
World food prices have fallen for the past three months and are 15.4 percent below the record set in February last year on a price index calculated by the UN Food and Agriculture Organization (FAO). The FAO was scheduled to update the index on Thursday.