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National Farmers Union President Buis to Congress: Energy Prices, Not the RFS or Commodity Prices, Drive Up Food Costs

Washington, DC—National Farmers Union President Tom Buis today recognized that high food prices are adversely affecting American families, especially those in the low and middle class, but said record high energy prices, rather than farm commodity prices, play the biggest role in grocery price increases.

"With the average food item traveling more than 1500 miles before reaching the final consumer, it is no wonder that food costs are increasing when, looking back over the past seven years, gasoline prices have increased 198 percent," Buis said.

In testimony before the U.S. Congressional Joint Economic Committee Buis said, "The more significant reasons for retail food price increases are $120 per barrel of oil, the declining value of the American dollar, increased demand from developing countries, world-wide weather related production shortages and speculation in the commodity markets."

Buis characterized efforts to reduce the current renewable fuels standard (RFS) as the single biggest mistake we could make in reducing energy and food costs.

"Reducing ethanol consumption would result in higher gasoline prices for consumers and disrupt our efforts to develop cellulosic ethanol in the future.

"Current ethanol production is lowering the price of gasoline at the pump by 50 cents per gallon," he said.

Buis offered the committee a number of solutions:

• Halt deposits to the Strategic Petroleum Reserve;

• Support for the farm bill's $400 billion for domestic and international nutrition programs;

• Establish an International Humanitarian Food Reserve; and

• Impose an excessive profits tax on oil companies' record profits.

Read Testimony National Farmers Union 400 North Capitol St. NW - Suite 790 Washington, DC 20001 Phone: 202.554.1600 - Fax: 202.554.1654

email: nfuonline@nfu.org