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Food prices whets possible subsidy cuts

May 2, 2008 at 7:47 AM   |   Comments

WASHINGTON, May 2 (UPI) -- High food prices and a presidential remark about wealthy farmers are pressuring the U.S. Congress to put farm subsidies and ethanol incentives on a diet.

Some congressional members want to change the nation's commitment to ethanol, including ratcheting back a requirement that more of the corn-based biofuel be added to the gasoline supply. Ethanol production has been blamed for the rising price of corn and other staples.

"This is a classic case of the law of unintended consequences. Congress surely did not intend to raise food prices by incentivizing ethanol, but that's precisely what's happened," U.S. Rep. Jeff Flake, R-Ariz., told the Los Angeles Times. Flake introduced legislation that would end federal support for ethanol.

Bush called on Congress to end crop subsidies for "millionaire farmers." When asking Congress to approve $770 million for global food aid, Bush expressed concern about the high cost of food and what it means to the poor around the world.

Soaring food costs are part of the presidential campaign. Retail food prices are expected to jump by 4 percent to 5 percent this year, on top of a 4 percent hike in 2007 -- the largest annual increase since 1990, the Times reported.

© 2008 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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