statements by u.s. officials
Remarks by Ralph Gifford, Agricultural Counselor, U.S. Embassy Ankara
TABA Breakfast Sheraton Hotel, Ankara
June 19, 2008
I’d like to start by reviewing some of the factors contributing to global food price increases.
First of all, in the past few years we have seen steep increases in energy costs, leading to rising prices for inputs and surging freight and transportation costs. In addition to pushing up production costs, the search for alternative fuels has led to an increase in biofuels production, with some impact on food prices. [Although smaller than many have claimed]
We have seen poor harvests in major grain producing countries due to poor weather. We may continue to see that this year.
We have seen greater use of export restrictions, which discourage farmers from responding to increased demand.
We have seen a reduction in global agricultural research and development – a trend we should all work to reverse.
We have seen restrictions on the use of safe and proven production enhancing technologies that could potentially help meet growing demand.
There also is this great irony, which is that the current supply and demand situation has been created in large part by an enormous success story: sustained global economic growth that has allowed millions of people around the world to move into the middle class and to enjoy a more varied diet. This unprecedented, rapid transition --particularly in China, India, Southeast Asia, the Middle East, and Latin America-- has doubled the number of the world’s middle-class households in the past 10 years…and shows no sign of abating. This also has caused a big increase in demand for all agricultural goods, especially livestock products. Let us also not forget that population numbers around the world continue to grow. The planet currently is home to 6 billion people; projected to reach 8 billion by 2025.
While all of us welcome economic development, we must ensure that the production of staple grains increases to meet the growing demand from new consumers, improved diets, more food and higher valued food products.
This shift of the demand curve leaves little doubt that global grain stocks will remain tight. A quick review of the global grain situation:
Wheat consumption has exceeded production in all but two of the past eight years, resulting in a sharp drawdown in stocks. Higher prices have reversed this trend and we are projecting significant increase in production in the coming years.
Rice production has been growing steadily, but global stocks are very low and must be rebuilt
And for coarse grains, that is grains primarily used for livestock feed such as corn and barley, as with wheat, consumption has often exceeded production and stocks have been falling.
However, despite certain hysterical claims, the world has adequate supplies to meet food demands in the short term.
The United States is deeply concerned by rising global food prices and the situation demands swift action. No single nation or organization can solve this problem. In the future, demands for commodities will increase with rising populations, strong economic growth and increasing needs for food, feed, and energy.
As the world’s largest donor of food assistance, the United States will continue to coordinate with international partners and donors. With our food security assistance programs, we are now projecting to spend over $5 billion over the next two years to fight global hunger.
And, a few weeks ago at the U.N. Food and Agricultural Organization’s Food Price conference in Rome, the U.S. Secretary of Agriculture Ed Schafer laid out a three-pronged strategy to address the current global food price situation.
First, the United States has committed to an immediate and expanded humanitarian response that targets the most critical needs globally and those most vulnerable to rising food prices. We will focus humanitarian assistance in countries unable to meet minimum nutritional needs due to a lack of buying power. We also will ask all countries to join in these efforts, and as the world’s largest donor of food assistance, the U.S. will continue to coordinate our own efforts closely with international partners and donors.
Second, we will provide development assistance to countries capable of rapidly increasing staple food production. We plan to invest in new activities with the goal of doubling production and trade of key food staples in targeted countries by 2013.
We must all encourage investment in inputs, credit, and improved post-harvest management to improve productivity. New technologies and better infrastructure can make agriculture more resistant to climate change and economic crises.
The third part of our strategy involves our commitment to trade liberalization, and we ask all countries to allow the free flow of food and the technologies that produce food.
We strongly encourage countries to lift measures such as export restrictions and taxes, because they only worsen the situation by taking food off the global market, driving prices higher, and discouraging farmers from responding to market signals.
To achieve a more efficient global market, the United States is also working toward the conclusion of a successful Doha Development Round this year that would reduce and eliminate tariffs and other barriers as well as market –distorting subsidies for agricultural goods. An era of tightening food supplies demands more open markets that efficiently move food products from surplus to deficit regions – not an increase in trade disruptions.
We hope all countries will abide by global trading rules agreed in the WTO and support sound, science-based evaluation and regulations to ensure the availability of safe, effective technologies.
Moving away from global issues now, I’d like to talk about the U.S.-Turkish Agricultural relationship
As Ambassador Wilson noted, U.S. and Turkish agriculture have a long and deep relationship, from the early days of the Republic to the Marshall Plan in the late 1940’s and continuing to the present day. Bilateral trade in agricultural products exceeded $2 billion in 2007.
To quote the Founder of the Republic of Turkey Mustafa Kemal Ataturk, “The foundation of the national economy is agriculture.”
To quote Thomas Jefferson, “Agriculture is our wisest pursuit, because it will in the end contribute most to real wealth, good morals, and happiness.”
Primarily, the U.S. ships Turkey raw materials: Raw cotton accounts for about half of U.S. exports to Turkey, as the Turkish textile sector has grown beyond domestic production abilities. Next come feed ingredients, including soybeans and corn, which are important for the rapidly-growing poultry and livestock sectors. Fats and oils, and hides for the important leather garment industry make up most of the rest.
In addition to tobacco, which accounts for about a third of total value, Turkey ships mostly consumer products to the United States. Processed fruits and vegetables are most important, including dried apricots, fruit juices, tomato products, hazelnuts, and herbs.
Anyone who has visited the United States lately knows that pomegranate juice has become very popular: a great deal of it is imported from Turkey.
The U.S. Department of Agriculture provides technical assistance to Turkish agriculture through several programs:
Most important is the Cochran Middle-Income Country program. This program pays all in-country costs for short-term training in the United States in various subjects. In the past five years, we have provided training to more than 60 people from both private and public sector, in areas from fruit and vegetable processing, cooperative management, animal husbandry, to food safety regulation.
Following the outbreak of H5N1 Avian Influenza in 2006, the U.S. government made a grant of $1 million to support increasing biosafety in rural areas. In addition, we have been able to provide advanced training for Turkish veterinarians in epidemiology, laboratory techniques, and clinical diagnosis, in both Turkey and the United States. I will echo Ambassador Wilson again here and say that all Turks should be very proud of their veterinary service and its response to avian influenza.
A commercial program that is very popular with our Turkish importers is our GSM-102 Export Credit Guarantee program. By providing credit guarantees through U.S. and Turkish banks, Turkish importers are able to reduce their financing costs when they purchase U.S. agricultural products. Most years this program is valued at $300-400 million.
And now I’m going to turn the microphone over to a man who knows more about Turkish agriculture than I do, and possibly knows more than I do about American agriculture.
You can find more information on our website: www.fas.usda.gov or write to AgAnkara@fas.usda.gov .
Thank you.