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COSTLY GRAINS: Soaring food prices have put staples such as rice and wheat beyond the reach of millions of people in poor countries. -- PHOTO: REUTERS
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WASHINGTON - THE United States has proposed a US$770 million (S$1 billion) emergency food aid package for poor countries in response to rising food prices across the world.
Announcing the proposal on Thursday, President George W. Bush said: 'With the new international funding, we are sending a clear message to the world that America will lead the fight against hunger.'
'In some of the world's poorest nations, rising prices can mean the difference between getting a daily meal and going without food,' he said, as May Day protests picked on soaring food prices which have put staples such as rice and wheat beyond the reach of millions.
The announcement follows Mr Bush's April 15 decision to raise US$200 million in food aid by selling off stockpiles of wheat reserved for international emergencies. In addition, US$350 million in aid is pending before Congress.
Thursday's proposal was something of a surprise, announced by Mr Bush in an unscheduled appearance.
It showed Washington's stepped-up attention to the global food crisis, coming two days after United Nations chief Ban Ki Moon ordered a top-level taskforce to tackle the problem.
Worldwide, food prices have risen 45 per cent in the past nine months, triggering social unrest in many countries. The World Bank has estimated a doubling of food prices over the past three years could push 100 million people further into poverty, and some 33 countries face unrest because of inflation.
The soaring prices are the result of several factors, including increased demand from a changing diet in Asia; bad weather; the diversion of staples such as corn into biofuels; soaring fuel prices that make transporting foodstuff more expensive; and trade restrictions on farm produce.
In his remarks on Thursday, Mr Bush pushed for the conclusion of the Doha Round of global free trade talks - deadlocked over farm commodities - saying lower barriers would mean cheaper food.
He also pressed countries to remove barriers to biotechnology crops, saying they held the 'promise of producing more food for more people'.
In the US as well, there is anxiety about rising food prices. The US Senate held a hearing on Thursday, discussing the steepest food-price spikes in 17 years which have sparked queues at food banks and 'recession diets' featuring less fresh meat and fish and more cheaper pasta and tinned foods.
At the same time, US government food surpluses have evaporated.
American farmers are selling their produce in the open market - taking advantage of the record crop prices - instead of selling to the government through price-support programmes. Some groups have made the case for a strategic grain reserve.
Domestically, some US$62 billion will be spent on food programmes.
The proposal for US$770 million in aid is part of the broader US$70 billion Iraq war budget for 2009 - meaning lawmakers still need to pass the measure and that the funds will not be available till the next fiscal year, which begins in October.
Mr Bush said the US would spend nearly US$5 billion in 2008 and 2009 to battle global hunger, and asked other wealthy nations to step up contributions.
With this measure, Mr Bush is also pushing efforts to change the way American food aid is channelled. Mostly this involves shipping American grain overseas, but the administration is working at transforming the system so that the aid money is used to buy grains from farmers in crisis-hit areas.
This would speed up delivery and support the local economy in the longer run.
World Bank president Robert Zoellick praised the announcement, saying it 'goes beyond critical shortterm needs and aims to deal with the causes of the crisis so millions will not suffer again'.
bhagya@sph.com.sg
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