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Food woes not fault of ethanol, Bush says

The White House rebutted that allegation by the IMF.

WASHINGTON - The Bush administration yesterday disputed the International Monetary Fund's claim that the push to increase biofuel production had been the biggest factor in rising food prices.

The disagreement involves blame for a growing problem with rapidly inflating prices for staple crops that have led to famine and riots in many parts of the world.

The IMF recently estimated that the shift of crops out of the food supply to produce biofuels accounted for almost half the recent increases in global food prices. That has led to calls from antipoverty groups to rethink government policies to boost biofuel production when the IMF estimates that global food prices rose 43 percent in the 12 months ended in March.

But the chairman of the Bush administration's Council of Economic Advisers, Edward Lazear, said at a hearing of the Senate Foreign Relations Committee yesterday that biofuel production had played only a small part in food inflation.

The United States has mandated increased production of ethanol, mostly from corn, to reduce oil consumption and dependence on foreign energy sources.

Lazear told the Senate panel that the administration estimates that U.S. ethanol production from corn accounted for about 20 percent of the rise in corn prices over the last 12 months, but only about 3 percent of increases in overall food prices.

"The bottom line is that ethanol production is a significant contributor to increases in corn prices, but neither U.S. nor worldwide biofuel production can account for much of the rise in food prices," he said.

Lazear said that increased demand from developing countries, especially China and India, rising energy costs, and droughts in some crop-producing countries were larger factors in rising prices.

The IMF and other groups studying the problem agree that those factors have also been important.

Josette Sheeran, the executive director of the United Nations World Food Program, has called the factors in increased prices "a perfect storm."

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