The US Secretary of Agriculture Tom Vilsack said that a recent spike in avocado prices was an example of businesses “taking advantage” of the COVID-19 pandemic and supply chain disruptions to push up food costs.
The US government was to allow imports of Mexican avocados to restart yesterday, ending a week-long suspension triggered by a threat against a US Department of Agriculture food inspector.
Prices in Chicago surged during the ban.
‘SERIOUS QUESTIONS’
“I would raise some serious questions about that cost increase given the fact it was obvious this was a short-term situation,” Vilsack said in an interview in Dubai on Sunday. “There’s no justification for that. None.”
Food prices have soared globally in the past year as economies recover from the pandemic. Producers and transporters are struggling to cope with the surge in demand, leading to huge delays moving goods through ports.
The rise in food costs has contributed to US inflation accelerating to 7.5 percent, putting pressure on US President Joe Biden ahead of November’s midterm elections.
‘TAKING ADVANTAGE’
While the economic rebound and logistical snarls are causing cost increases, not all of them are justified, Vilsack said.
He is in Dubai to promote US agricultural trade with the United Arab Emirates and neighbors such as Saudi Arabia.
“The question is whether all those increases are directly correlated to those causes or whether people are taking advantage,” he said. “There are some comments I’ve read — attributed to some folks in the agribusiness world — where they’re suggesting or at least intimating that this is an opportunity to raise prices beyond what is necessary to deal with supply chain challenges they may face.”
Food prices should start to fall as the US economy normalizes and supply problems are resolved, he said.
“If they come down, will they come down commensurate with how much they went up?” he said. “If they don’t, that would suggest there’s something more afoot here. People should be asking those questions.”
Vilsack rejected a call from Republicans for “damages” from China to address shortfalls in purchases of US exports.
US House of Representatives Minority Leader Kevin McCarthy and a group of colleagues said last week that Beijing failed to meet a commitment as part of the first phase of a US-China trade deal to buy US$16 billion of agricultural goods in 2020 and last year.
“That’s interesting coming from the party that basically caused the problem to begin with,” Vilsack said. “That’s not an answer. The answer is negotiations. The answer is looking for ways in which we can strengthen the trading relationship in agriculture with the Chinese. I’m confident we’ll see a better performance.”
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