SEC. ED SCHAFER: Thank you for joining us today. I will give you a broad overview of next week's conference on World Food Security that is being held by the Food and Agriculture Organizations (FAO) of the United Nations, Rome. This conference, which will run from June 3rd through June 5th, is called by the FAO to address food supply and demand issues in the face of rising food prices and the new challenges of climate change and energy security.
More than 40 heads of state are expected to attend. I will lead the U.S. delegation to this high level conference. And here with me are other members of the delegation: U.S. Agency for International Development Administrator and Director of U.S. Foreign Assistance Henrietta Fore, and Agriculture Under Secretary for Farm and Foreign Agriculture Services Dr. Mark Keenum.
At the conference, the message I will deliver on behalf of the United States will be straightforward: United States contributes more than one-half of all the world's food aid and the world's other developed nations have an obligation to provide food efficiently without obstructing access to it or limiting safe technologies to produce it.
I will propose a long-term, three-pronged strategy to combat rising global prices.
First, the United States will focus immediate and expanded humanitarian assistance on countries unable to meet minimum nutrition standards.
Second, the United States supports urgent measures to attack the underlying causes of food availability in developing countries that have the capacity to rapidly increase production and availability of staple foods.
Third, the United States will propose that all countries consider strategies that expand research, promote science-based regulations, and encourage innovative technology -- including biotechnology.
Some basic examples of this are: encouraging a policy environment that invests in water management, fertilizer and seed marketing, agriculture credit, and improved post-harvest management. To that end, next week Administrator Fore and I will be hosting a side event focused on new technologies to showcase developing countries that have moved forward with public investment in adoption of bioengineered products.
A key component to this third prong is the World Trade Organization Doha Development Agenda and our U.S. efforts to work toward the successful conclusion of these negotiations. As you know, an ambitious Doha Agreement would reduce or eliminate tariffs and other barriers as well as market-distorting subsidies for agriculture goods.
Now is the time to lift trade-restrictive policy measures such as export restrictions. While they are designed to increase short-term food availability within countries, they generally have just the opposite effect when these policies take food off the global market, drive up prices, and isolate farmers from market signals that affect their ability to meet demand.
Finally, I will mention the international communities' efforts to move away from dependence on fossil fuels by increasing production of biofuels. Biofuels are just one contributor to increase food prices as demonstrated by price increases on all commodities, both food and nonfood. According to our analysis [White House Council of Economic Advisors], the increased biofuels production accounts for only 2 to 3 percent of overall increase in global food prices. At the same time, the International Energy Agency reports that biofuels production over the past three years has cut the consumption of crude oil by 1 million barrels a day. Biofuels are helping address both environmental concerns and the economic impacts of high oil prices.
Many macroeconomic factors have an impact on food price inflation: rising energy costs, which can be mitigated by biofuels for harvest in major grain-producing countries; short-sighted use of export controls as well as global economic growth which has led to increased food consumption.
This is the United States' strategy that I will present as the head of the delegation. I look forward to learning about other perspectives on these important issues.
My colleagues and I now would be happy to answer any questions that you may have. Thank you.
REPORTER: My name is Kaori Iida. I'm with NHK Japanese Public Television. You touched upon the bioengineered crop. I was wondering if you'd talk a little bit more about the benefits of genetically modified soybeans, how it would help resolve the food crisis. And also, what would you say to countries such as Japan or Europe where genetically modified crops are not well-received?
SEC. SCHAFER: Well, I think it's a broad issue, and certainly the bioengineered crops are but one of many situations that need to take place for increasing yields around the country if we're going to meet the demands of increased consumption.
On the biofuels specifically, I would point out that this is 10 years of technology in the United States and other countries. And what we see is: increased production, less use of fertilizer and water, products that are conditioned to soil and climate conditions that are directly, they are better-flavored, better looking. They work with the consumer better. But importantly, they increase the food supply.
Obviously biotechnology has made great strides. I would point out that the EU imports over $1 billion worth of genetically modified feed products into their countries every year. As we move into now this food demand situation, we're going to have to increase yields across the country if we're going to feed people properly, and biotechnology is one of the ways that we can increase yields to make sure we meet the demands.
REPORTER: Jim Berger, Washington Trade Daily. Will you be stopping by the OACD Trade Minister Meeting in Paris on June 5th? And also, can you give us an assessment of what's going on in Geneva in agriculture talks?
SEC. SCHAFER: I will not be stopping by. Joe Glauber, our chief economist as well as lead ag negotiator, will be there, as will others. And I will be meeting with him and interacting with him, but I will not be at the meeting. And as far as the Doha Round, at this point in time I think we're here to talk about our efforts at the Food Conference. Things are continuing to move forward. We in the United States are very much looking forward to a completion of the round this year and are willing to meet the appropriate conditions. And I'd refer you of course to Ambassador Schwab at USTR who's much closer to it than I am.
REPORTER: Alan Bjerga from Bloomberg News. In the recently completed Farm Bill there is a - well, we think it's the recently completed Farm Bill.
SEC. SCHAFER: Portions of the recently completed Farm Bill, yes.
REPORTER: But in that is the pilot program for cash aid in local buying, which was something that the Bush Administration wanted more of. As you go into this conference trying to assure other countries that the U.S. will be able to give aid in the most effective way possible, how can you assure them that the U.S. is doing everything it can when what you said you need to do you can't do?
SEC. SCHAFER: Well, I think the point is here, the United States provides well over half of all the food aid in the world today. And we're proud of that, and the people of the United States support that. We're going to continue to maintain that position.
What we're trying to do with Congress, who may agree or not agree, is an effort to become more efficient, recognize the huge costs today of energy which affect transportation, in an effort to get more food to the places where it's needed. We're hoping to provide some flexibility in that local purchase option. As you know, Congress doesn't see it that way. But the pilot project is a good step. And we're excited about that, and we're going to make that work as best as possible.
The message is, the United States commitment is there, it's not changing; we're trying to make it better and we're trying to make it more. But because we haven't been able to get that local purchase option the way we'd like to see it, our efforts are not going to be diminished.
REPORTER: Missy Ryan from Reuters. Can you describe this three-pronged initiative that you're talking about? Is this something that you're proposing that the U.S. will do or that you're proposing all countries embrace sort of as a joint initiative?
And how much funding will the United States commit for its part? And how would it be different than what the United States is already doing in agriculture development in food assistance and then on regulation and providing of biotechnology and biofuels?
SEC. SCHAFER: There's a lot of questions in there. Specifically on where we are with USAID, maybe I could ask Administrator Fore to talk about our commitment.
ADMINISTRATOR HENRIETTA FORE: Secretary Schafer and I are carrying to Rome the President's initiative which he has announced as the three prongs of the strategy. It is his request to Congress for additional funding, but we also have a great deal of funding that is currently occurring in humanitarian assistance development aid as well...general market openings. All of these we will be testing. We will be encouraging our fellow ministers to join with us on many of these initiatives. Most of us are focused to encourage doubling of production of ....the ways we can come up with our friends in Japan and other countries around the world. The President's initiative is very strong, and that is what we are.... the President announced $5 billion over two years.
SEC. SCHAFER: Yes?
REPORTER: I have a brief follow-up on biofuel. And, Mr. Secretary, as you know some parties concerned are calling for either setting up or considering the international guidelines to tackle the issues of biofuels. Would you tell us your point of view about a proposal to either establish or consider guidelines?
SEC. SCHAFER: We think that policy-wise in the United States of America -- and certainly in the rest of the world -- that as we see the price of oil and petroleum escalate dramatically beyond anybody's imagination, that one of the ways to deal with that is to produce biofuels which are renewables, better for the environment, and help lower that cost. So we think it's an important initiative.
I would point out that in the United States and in other countries as well, all ethanol production specifically has come from increased yields in the corn crops. So we're not pulling out any traditional markets. Our export markets are up in corn out of the United States. The yield increases are taking care of it, and certainly the benefits derived are much more than the 2 to 3 percent that is contributing to the rising inflation in food costs internationally. We think it's an important initiative, and while people do have some concern I think we can point out the facts here, not the emotions but the facts, that this is not distorting the global price of food. And it's an important direction we need to go.
I don't know much about the international guidelines. What I can say is, we have set guidelines in the United States. We've set targets out there and said, "This is how we're going to create energy independence in this country. And we urge others in the face of this rising price problem with energy to look at alternative means, one of which certainly is biofuels." That's what I know about that.
REPORTER: Mr. Secretary, my name is Higuchi. I'm a reporter of the Jiji Press Japanese Newswire. In terms of the food aid so that Japan is considering exporting the imported rice to the Philippines and other Asian nations. So do you have any comment on it?
SEC. SCHAFER: You know, I'm pleased that Japan is looking at humanitarian delivery of product to nations that need it. I'm a little concerned that it might come into a situation where it becomes a profitable operation. As you know, Japan is required to purchase a certain amount of rice specifically under trade agreements. That rice has been held off the market for local consumption. I think this has been stockpiled. I don't think that was the spirit of the agreement. But as you look forward, I think it's important to assure the global community that rice stocks are available, that enough rice is in supply to meet the demands, and how we move it country to country is important. And I appreciate Japan's effort here to look at humanitarian needs to move the rice.
REPORTER: My name is Wantanobe from Japanese newspaper Sankei Shimbun. I just want to confront statistics data about GM food. How much genetically modified food has contributed to U.S. grain production increase? How much GM food now dominates U.S. grain production?
SEC. SCHAFER: I don't know that number. Do we have a -
VOICE: ...genetically modified, most of what we export.
SEC. SCHAFER: Yes?
REPORTER: Thank you. Strader Payton, TV Tokyo. Just to follow up briefly on a question that was asked earlier, do I understand it correctly that the three-pronged strategy is not necessarily a set of new policy initiatives, but it's more of a bringing policies in the U.S. that have been proposed at the table and trying to get other nations to sort of cooperate on some of these efforts?
SEC. SCHAFER: Yeah. It's the three pronged strategy of going into a world foods conference and saying, "This is what needs to be done; this is what we're doing." We are going to be urging others to follow along with that three pronged solution to the problem.
REPORTER: In line with this, what can you say that you have seen positively out of any of America's partners? I mean have you seen any positive developments in other countries, proposals along the lines of the U.S. three-pronged strategy?
SEC. SCHAFER: Well, you know, we're going there to find out. But I think we have, and maybe Administrator Fore has some specific examples?
ADMN. FORE: I mentioned some yesterday by Japan about their contributions....both humanitarian..... I think we'll be hearing from a number of other .....around the world ....
SEC. SCHAFER: Well, thank you all. We appreciate you joining us. If you have any follow-up questions or matters, Corry is over here, and she'll get you the info.